| Resource Type | Research Report |
| Author / Source | Claire Wayner, Kaja Rebane, Chaz Teplin (RMI) |
| Publication Date | November 2024 |
| Location | United States |
| Initiative Type | Policy, Program |
| Project Complexity | Intermediate |
| Recommended For | Board, Staff |
View Full Document Requires name and email to access
Estimated reading time: 30+ minutes
Why This Matters for Rural Electric Co-ops
Transmission investment in the United States is increasingly focused on local utility projects rather than regional transmission planning. For rural electric cooperatives, this trend can affect affordability and reliability because poorly coordinated transmission investments may raise costs for members. Transmission and distribution costs have grown from 10% of the average residential bill in 2005 to 24% in 2020, and those costs flow directly to co-op members through wholesale power rates.
This report examines regulatory gaps that limit oversight of local transmission projects and proposes reforms to improve transparency and planning efficiency.
Key Takeaways
| › | Local transmission projects face far less regulatory scrutiny than regional ones, giving utilities a financial incentive to build them even when cheaper alternatives exist. |
| › | Transmission spending has shifted dramatically toward local projects nationally, with less grid capacity added per dollar spent as a result. |
| › | FERC Order No. 1920 added new transparency rules, but asset replacement projects remain largely exempt, leaving the gap mostly intact. |
| › | RMI proposes 11 reforms across regional, federal, and state levels, anchored by "regional-first planning" to ensure local projects are evaluated in a broader context before approval. |
Implementation Considerations
- Regulatory or Governance Considerations: Co-ops should monitor regional planning processes and participate where possible, because transmission costs may flow through wholesale power rates. Engagement through G&T cooperatives, state consumer advocate groups, or NRECA is the most accessible path for most distribution co-ops.
- Staffing or Technology Requirements: Engagement in transmission planning requires regulatory and technical expertise most distribution co-ops do not have in-house. Smaller co-ops should look to their G&T cooperatives or statewide associations for support in tracking relevant FERC proceedings or regional planning cycles.
Notable Examples
- Kansas Corporation Commission: Changed state law in 2023 to require transparency and lower returns for local transmission cost recovery.
- Eversource Energy (New Hampshire): Proposed a $385 million line rebuild with minimal regulatory review, illustrating the gap in action.
- NESCOE: Formally challenged the Eversource project, showing how state coalitions can push back under current rules.
- Colorado Electricity Transmission Authority: Found 80% of state transmission needs could be met through rebuilds rather than new construction.
- PJM Interconnection: Estimates regional planning saves ratepayers $300 million annually by evaluating the grid as a whole.
View Full Document Requires name and email to access
Estimated reading time: 30+ minutes
Related to
Comments
0 comments
Please sign in to leave a comment.