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November 10, 2013
Brattle Report Analyzing the Benefits of Transmission Investments Cited in Intelligent Utility Article

A recent Intelligent Utility article discussing transmission benefits in light of the Federal Energy Regulatory Commission’s (FERC) Order No. 1000 cites a July 2013 study authored by Brattle economists that highlights the benefits of new high voltage transmission investments.

The article, “Transmission benefits: filling a critical gap in Order 1000,” is part one of a two-part series authored by former FERC Chairman Jim Hoecker. Order No. 1000 spells out an approach in which to identify and monetize the benefits to each utility on the grid derived from a new transmission investment. Because it’s also designed to encourage the best transmission projects, identifying and measuring multiple transmission benefits is important. The author points out, however, that FERC failed to define ‘benefit’ for planning or cost allocation purposes, which became both an opportunity for creative, and often inconsistent, exercise of state and regional planning and rate approaches, as well as a source of considerable uncertainty and risk in planning and cost allocation.

The article cites the Brattle study, which 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 author discusses that despite recent changes in grid operations and expansion as a result of FERC’s open access transmission rules, planners and policy makers often ignored or failed to grasp the full range of potential benefits that expanded or upgraded transmission facilities could provide, beyond the primary reliability and economic benefits.

The study, “The Benefits of Electric Transmission: Identifying and Analyzing the Value of Investments,” was prepared for the Working Group for Investment in Reliable and Economic Electric Systems (WIRES) and authored by Brattle Principals Judy Chang and Johannes Pfeifenberger, and Associate Michael Hagerty. The report can be downloaded using the link below.

To read the article in its entirety, please visit Intelligent Utility’s website.