Spending more but getting less
Five data points on transmission
The Federal Energy Regulatory Commission’s Order 1920 ignited extensive debate on transmission policy. Before exploring what future policies might entail, it's important to review some key transmission outcomes:
It takes over 10 years, on average, to build an overhead transmission line.
It takes twice as long to plan and permit that transmission line, 7 years, as it does to build the line, 3.2 years.
Fewer miles of transmission lines are being completed today than in the last 15 years.
The increased spending on transmission and distribution could be increasing your electric bills.
More and more of your electric bill reflects transmission and distribution costs, not generation costs.
These outcomes should leave everyone dissatisfied and interested in fixes. Those extend far beyond simply building more transmission lines, we should be leveraging market incentives to enable a whole suite of options. For example, streamlining transmission permitting, reconductoring existing lines, building more distributed generation, experimenting with demand response at all levels, adopting grid-enhancing technologies, unlocking flexible loads, adding home batteries, and many others.
In short, despite the dramatic reduction in the miles of new transmission lines built over the last 15 years, we have many reasons for optimism.
How long it takes to build a transmission line
On average, it takes 10.2 years to build a transmission line, which is longer than it takes to add other grid assets. Of this timeline, 7 years are spent in planning and permitting. It then takes about 3 years to build the lines.
We are building fewer miles
There has been a dramatic decline in the number of transmission miles built over the last 16 years. From 2008 to 2016, an average of about 2,000 miles were built each year. In 2023, we built only 252 miles. Since 2015, about 1,000 miles or more have only been built three times, 2016, 2018, and 2021. As clear in the graphic, the largest decline in transmission built is in 345kV lines.
Spending more on transmission even as we build fewer miles
Transmission spending has been increasing for over a decade. Much of this is in new investments in the transmission system. Your bill is likely going up because of that investment. The Energy Information Administration (EIA) noted, "In 2018, increases in spending for electricity transmission and delivery, rather than for electric generation, drove most of the approved rate increases.”
In a more concrete context, the EIA estimates that, in 2006, power production was $0.69 out of every dollar in your electricity bill. By 2016, that had fallen to $0.5. Delivery costs had grown from $0.22 to $0.36. This has continued today–driven by increased transmission and distribution costs.
Knowing that we should want more is easy
These are disappointing transmission outcomes. The best test of a system is looking at what it produces. If you’re not happy with the outputs, you must change the process and the inputs.
However, that is much easier to complain about than it is in practice. We can celebrate the recent steps taken to remove the red tape around transmission. President Biden’s administration created a new program to have the Department of Energy oversee a single environmental review for transmission developers, the Coordinated Interagency Transmission Authorization and Permits program. But we’ll likely need much more to make permitting easier and cut timelines from 7 years.
The good news is that transmission is only one of many tools at our disposal. Building new lines is unnecessary if we reconductor so that existing lines carry more. Earlier this year, President Biden’s administration also cut the red tape around reconductoring by extending a categorical exemption to the National Environmental Policy Act’s (NEPA) review process.
The past 15 years have seen a troubling reduction in the construction of new transmission lines, yet there are many reasons to be optimistic about the future. While the future will certainly include new connections between regions, it will also embrace a more diverse range of solutions beyond simply adding miles of new lines. This diversity, incorporating new technologies and methods for powering and maintaining the grid, may bring growing pains, but it will ultimately lead to a more resilient and robust energy system.