Brattle principal Hannes Pfeifenberger and associate Delphine Hou have authored an article discussing the benefits of transmission investments for the February 2012 issue of Public Utilities Fortnightly.
In the article, “Transmission’s True Value: Adding up the Benefits of Infrastructure Investments,” Mr. Pfeifenberger and Ms. Hou discuss that the allocation and recovery of transmission investment costs has been a major obstacle in the construction of regional and interregional transmission projects throughout several power markets. The Federal Energy Regulatory Commission’s (FERC) Order 1000, which requires that the allocation of transmission costs be “at least roughly commensurate” with estimated benefits, places a new emphasis the benefits of transmission investments.
According to the authors, the benefits of investing range from increased reliability to decreased transmission congestion and generation costs, as well as risk mitigation, renewables integration, economic development, and increased competition in power markets. Additionally, transmission benefit-cost analyses reveal that the sum of all benefits often substantially exceeds the costs associated with transmission projects.