Digest

This podcast delves into the complex issue of electricity transmission infrastructure development in the US, focusing on the ongoing debate between proponents of a competitive model and those advocating for a monopoly model. The episode begins by introducing Order 1000, a rule implemented by the Federal Energy Regulatory Commission (FERC) in 2011 aimed at introducing competition into the transmission sector. The rationale behind Order 1000 and its intended impact on regional planning and infrastructure development are discussed. The podcast then explores a hypothetical scenario in Boston to illustrate how competition could work in practice, contrasting the traditional monopoly model with the potential for multiple developers to compete for transmission projects. However, the episode also acknowledges the challenges faced by Order 1000, including pushback from incumbent utilities and limited adoption of competitive bidding. The reasons behind the utilities' resistance and the resulting impact on the implementation of competition are highlighted. The episode emphasizes the urgency of expanding transmission infrastructure to meet the growing demand for electricity and decarbonize the economy. It highlights the potential cost savings associated with competition and the arguments presented by both sides of the debate. The utilities' perspective on competition is presented, arguing that transmission is a natural monopoly due to high startup costs and unique market conditions. Their concerns about potential cost increases, reliability issues, and delays associated with competition are discussed. The podcast concludes by discussing the current state of the transmission debate, highlighting the lack of a clear stance from FERC and the potential for states and regions to make their own decisions. It emphasizes the need for collaboration and negotiation to overcome the challenges and achieve the goal of decarbonizing the electric system.

Outlines

00:00:13

The Power Struggle: Competition vs. Monopoly in Electricity Transmission

This episode explores the debate surrounding the best approach to building new electricity transmission infrastructure in the US. It delves into the pros and cons of a competitive model versus a monopoly model, highlighting the arguments of both sides and the potential impact on consumers.

00:02:38

Order 1000 and the Push for Transmission Competition

This episode introduces John Wellinghoff, former FERC chairman, who spearheaded Order 1000, a rule aimed at introducing competition into the transmission sector. It explains the rationale behind the order and its intended impact on regional planning and infrastructure development.

00:03:40

Competition in Action: A Hypothetical Scenario

This episode uses a hypothetical scenario in Boston to illustrate how competition could work in practice. It contrasts the traditional monopoly model with the potential for multiple developers to compete for transmission projects.

00:04:51

The Reality of Competition: Challenges and Limited Success

This episode discusses the challenges faced by Order 1000, including pushback from incumbent utilities and limited adoption of competitive bidding. It highlights the reasons behind the utilities' resistance and the resulting impact on the implementation of competition.

Keywords

Q&A

• What are the main arguments for and against competition in electricity transmission?

  Proponents of competition argue that it leads to lower costs, faster development, and more innovation. Opponents argue that transmission is a natural monopoly with high startup costs and unique market conditions, and that competition could lead to higher costs, reliability issues, and delays.

• How did Order 1000 attempt to introduce competition into the transmission sector?

  Order 1000 required utilities to plan on a regional basis and allowed for competitive bidding on transmission projects. It aimed to break the monopoly of incumbent utilities and encourage new developers to participate in the market.

• What are the challenges facing the expansion of transmission infrastructure in the US?

  The US grid is not currently equipped to handle the growing demand for electricity and the transition to a net zero emissions economy. There is a need for significant investment in new transmission lines, but the debate over competition versus monopoly is hindering progress.

• What is the current state of the debate over transmission development?

  FERC has not taken a firm stance on competition, leaving the decision to states and regions. The debate continues, with both sides presenting their arguments and advocating for their preferred approach. The outcome will have significant implications for the future of the US electric grid.

Show Notes