WASHINGTON – The latest inflation data release confirms that electricity prices continue to outpace the Consumer Price Index with electricity prices increasing by 3.6% compared to 3.2% for the CPI over the last 12 months. With the Federal Energy Regulatory Commission (FERC) poised to finalize its transmission planning rule as early as next month, the latest inflationary data should remind them of the importance of competition for new transmission projects.

In a statement, Paul Cicio, Chair of the Electricity Transmission Competition Coalition, said: “Today’s report is especially damning because electricity generation costs have fallen due to low natural gas prices, but transmission costs continue to accelerate. FERC can take an immediate step to reduce inflation and lower prices for consumers. The only way to check the power of incumbent monopoly utilities and ensure the cost of electricity is affordable for households and businesses is to enforce Order 1000 and competitively bid large transmission projects.”

Competitively bid electricity transmission projects have been shown to reduce costs to consumers by up to 40% according to The Brattle Group – assuming a conservative estimate, if only 33% of new transmission projects were competitively bid and there is an average cost savings of 40%, ratepayers could save an estimated $277 billion. If all new transmission projects were competitively bid at an average cost savings of 40%, ratepayers could save an estimated $840 billion by 2050. Transmission costs have grown as a share of the price of electricity, and only competition can bring the price of electricity back down.

Read more about the benefits of transmission competition in ETCC’s comprehensive report.

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