Transmission Companies Seek to Evade Competitive Bidding
Xcel Energy, American Transmission Co. lobby federal regulators. How will it impact electric rates?
![High Voltage Power Lines. Photo by Corey Coyle [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons](https://urbanmilwaukee.com/wp-content/uploads/2017/04/ATC_High_Voltage_Power_Lines_-_panoramio.jpg)
High Voltage Power Lines. Photo by Corey Coyle (CC BY 3.0), via Wikimedia Commons
In a complaint filed last week with the Federal Energy Regulatory Commission, or FERC, the utilities, including two in Wisconsin, argue grid operators’ implementation of a federal rule requiring competitive bids for transmission projects is delaying construction and driving up costs.
The complaint says electricity demand is rising at a “rate unseen since World War II,” with demand in the Midwest potentially doubling by 2044.
“To meet spiking load growth, we must build the transmission needed to connect new large loads and generation,” the complaint reads. “If we succeed, we will win the race to achieve dominance in artificial intelligence, rebuild our nation’s manufacturing base, and ensure we have the infrastructure needed to extract our nation’s oil and gas resources.”
The filing follows two unsuccessful attempts by Wisconsin transmission utilities to change state law to give in-state utility companies first rights to build new high-voltage lines. That push came after the Midwest grid operator approved billions of dollars in new transmission projects.
In the Midwest grid operator’s service territory, eight states have passed right of first refusal laws, but two have been overturned in court.
The companies, which include American Transmission Co. and Xcel Energy, are asking regulators to either exempt certain projects from the bidding process if delays would hold up new power supply or large customers, or pause the requirements entirely for five years.
The proposed changes would be implemented in the service territories of two grid operators, the Midcontinent Independent System Operator, or MISO, and Southwest Power Pool, or SPP. Wisconsin is part of the MISO region.
A MISO spokesperson said the Midwest grid operator “is reviewing the FERC complaint and will file its response at the Commission in the coming weeks.”
Opponents say removing the bidding process would ultimately drive up costs for consumers.
“The complaint is tone deaf to the electricity affordability crisis facing Americans,” said Paul Cicio, chair of the national interest group Electricity Transmission Competition Coalition, in a statement. “Suspending competition for five years in MISO and SPP would expose consumers in these regions to unchecked cost escalation for years, guaranteeing higher utility bills.”
The complaint estimates bidding processes in the MISO and SPP regions are adding 16 to 20 months to major transmission projects on average.
In one example, a southeast Wisconsin transmission project was awarded to an out-of-state developer in January.
Portions of the project were reassigned to American Transmission Co. in March after the developer “could not meet the December 2027 in-service date for certain facilities,” the federal filing stated.
Ellen Nowak, vice president of state and federal affairs at American Transmission Co., said the delays stem from what she described as an opaque bidding process in which “Wisconsin doesn’t have a say” in who owns important infrastructure.
“There is a need for infrastructure to be built quickly in order to keep up with what the economy is demanding and what people demand for reliability,” she said. “Having a 16- to 20-month bureaucratic solicitation process in the midst of all of it is not helpful.”
In a statement, a spokesperson for Xcel Energy said the utility joined the complaint because customers are “best served” when transmission projects move from approval to construction “without unnecessary delay.”
But residential and commercial ratepayer advocates in Wisconsin framed the complaint as utilities turning to federal lobbying after losing the fight on right of first refusal at the state level.
“We fought hard to keep competitive bidding at the legislative level, and now they’re doing this move to suspend it throughout the region,” said Tom Content, executive director of the Citizens Utility Board of Wisconsin. “It’s concerning that you would take away a tool that is designed to save people money.”
In a statement, Todd Stuart, executive director of the Wisconsin Industrial Energy Group, described the federal complaint as a “sore loser” version of the failed right of first refusal legislation in Wisconsin.
“It is another effort by the utilities to defeat competition,” Stuart said. “When they lose in state legislatures and then lose out on competitive bids, then I guess they go back to FERC.”
Transmission companies call on federal regulators to ease bidding requirements was originally published by Wisconsin Public Radio.
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