ICYMI – NPR’s Planet Money published a story on the issue of electricity transmission competition. During the episode, former FERC Chair Jon Wellinghoff said it best, “competition provides for faster, better, cheaper. That’s all going to help consumers.” However, as NPR showed, monopoly electric utilities took action to avoid competition to increase their profits. The result was sky-high transmission costs that were passed onto consumers.

In a statement Paul Cicio, Chair of ETCC, said: “In 2011, The Federal Energy Regulatory Commission rightly found that FERC jurisdictional transmission competition was in the public interest. Order 1000 was right, and the incumbent utilities were wrong.

“PJM is a good example of what wrong looks like. The cost of transmission as a percent of the cost of wholesale electricity rose from 9.4 percent to 28 percent from 2013 to 2023 and rates have more than doubled despite the fact that demand was essentially flat.

“The expectation and intention of Order 1000 was that it would advance more efficient planning and reduce costs. Instead, incumbent monopoly electric utilities took legal action to stop Order 1000 and urged their state legislatures to protect their monopoly via ROFRs. Then, they built several hundred supplemental transmission lines to avoid competition instead of building efficient regional transmission lines that would improve reliability and lower costs for consumers.    

“The only studies out there that oppose transmission competition are by the monopolists and they cherry-picked market data. Common sense says competition is beneficial – not hurtful.”

Excerpt from the conversation between former FERC Chair Jon Wellinghoff and NPR:

WELLINGHOFF: We would have multiple competitive parties out there trying to put in more lines in the country, and more lines would ultimately get built because of that competition. My belief is that competition provides for faster, better, cheaper. That’s all going to help consumers.

NPR: Incumbent utilities were not happy. They pushed back against competition hard, finding exception after exception. To avoid it, they successfully preserved their monopoly through state legislative action. One study found only three to 8% of all transmission projects were competitively bid in the years after Order 1000 went into effect.

Listen to the full story here.

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