June 06, 2016

Effective Transmission Planning to Address Changing Generation Landscape Could Significantly Reduce Customer Costs, According to Report by Brattle Economists

A new report released today by Brattle Principals Judy Chang and Johannes Pfeifenberger finds that reforming the U.S. electric transmission planning and development process to address the evolving energy generation landscape could save customers up tens of billion dollars annually in overall cost savings.

Prepared for WIRES, the Brattle report examines how improved transmission planning can help reduce overall costs in the face of shifting generation mix, evolving regulatory requirements, and changing demands of electricity customers. Specifically, the authors estimate that the net savings associated with a proactive transmission planning and development process would range from: (a) $30 to $70 billion of savings in total generation and transmission investment costs through 2030 for compliance with current regulations; to (b) $47 billion per year of savings in annual customer bills under an even more environmentally-constrained future in which a well-planned grid significantly reduced generation investment and operating costs. The more proactive approach to transmission planning encouraged in the report is recommended regardless of whether the generation shift is driven by evolving energy markets, technological changes, or the requirements in the Environmental Protection Agency’s Clean Power Plan (CPP).

The Brattle report recommends that as state and federal energy regulators and policymakers face the unprecedented challenge of guiding the industry through the rapidly-evolving energy landscape, they should urge transmission planners to move beyond today’s traditional planning approaches focused primarily on addressing reliability issues. Additionally, the authors argue that the industry needs to develop processes able to identify transmission solutions that increase future compliance flexibility while meeting anticipated environmental policy goals at lower costs and lower risks for customers.

This report, “Well-Planned Electric Transmission Saves Customer Costs: Improved Transmission Planning is Key to the Transition to a Carbon-Constrained Future,” is the third in the authors’ series of studies on how improved transmission planning can provide significant overall benefits. The new report, a summary presentation, and the two previous studies can be accessed using the links below. Additional information can also be found on WIRES website.

Associated Experts
Chang for web
Principal
+1.617.864.7900
Judy Chang is an energy economist and policy expert with a background in electrical engineering. She has 20 years of experience in advising clients in transmission, resource, and strategic planning. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Pfeifenberger 034 edited
Principal
+1.617.864.7900
Mr. Pfeifenberger is an economist with a background in electrical engineering and over twenty-five years of experience in the areas of regulatory economics and finance. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4