Most localities don’t open new transmission projects to competitive bidding
"Your editorial “The Real Risk to the Electric Grid” (July 21) accurately points out the problem of escalating electricity prices, but you miss a main culprit. Electricity prices are rising in part owing to the fact that most localities don’t open new transmission projects to competitive bidding.
Many states have right of first refusal laws that give an existing utility the right to prevent competitive bidding over new transmission projects. Utilities’ market power means they get high returns for every dollar they spend on transmission infrastructure and can pass the costs on to ratepayers. Perversely, the more they spend the higher the profit. An example of how this affects prices: From 2013 to 2023 transmission costs for PJM customers increased from 9.4% to 27.4% of the total wholesale price of electricity.
Competitive bidding on transmission construction can lower electricity prices by as much as 40%. If the Trump administration wants to lower energy costs, endorsing competition is a good place to start.
Paul Cicio
Chairman, Electricity Transmission Competition Coalition"
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