How to pay for transmission (and who should pay it)

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By: SGN Staff

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Quick Take: There's a growing recognition that stronger transmission infrastructure is critically important to the U.S. and Canadian economies. Now a trade association has commissioned a new study by the economists at The Brattle Group to further define and prove the benefits of transmission upgrades, especially those that have previously been hard to quantify.

 

The report also discusses ways to solve the "who should pay" quandary that has previously blocked many investments. It notes that a federal appellate court has strongly supported a regional "beneficiaries pay" allocation approach that recognizes the benefits often apply across system and state boundaries. - By Jesse Berst

 

WIRES' New Study Is First Guide to All Benefits of Building Transmission

 

A new study commissioned by the Working Group for Investment in Reliable and Economic Electric Systems (WIRES) and authored by economists at The Brattle Group finds that new high voltage transmission investments offer numerous potential benefits that have too often been disregarded as remote, intangible, or hard to estimate. The report urges planners and policy makers to consider the full range of potential economic, reliability, environmental, and public policy benefits of new and upgraded transmission when evaluating which projects will best serve customers and the economy. For the first time, transmission planners and policy makers now have a catalogue of benefits and techniques for evaluation that they can employ in devising optimal regional transmission plans.

 

The comprehensive analysis documents:

·         All potential economic, reliability, operational, and public policy benefits from expanding or upgrading the high voltage grid;

·         The evolving experience and existing practices of planners in RTO and non-RTO regions when determining those benefits and the beneficiaries of new transmission capacity; and

·         How planners and policy makers can employ more systematic procedures and analysis to arrive at better transmission (and non-transmission) solutions.

 

Download the study.

 

Jesse Berst is the founder and Chief Analyst of SGN and Chairman of the Smart Cities Council, an industry coalition.

 

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