THE PLANNING PARADOX OF REGIONAL TRANSMISSION COST ALLOCATION: FEDERAL POLICY RECOMMENDATIONS FOR EFFICIENT TRANSMISSION DEPLOYMENT
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2022-12
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Abstract
Current regional cost allocation procedures for transmission deployment do not reach the level of deployment necessary to support the domestic energy transition and unlock the full potential of the Inflation Reduction Act of 2022. Regional transmission capacity expansion of 2.3%/year is needed to support domestic clean energy goals, enable generator interconnection, protect system reliability amidst a changing generation mix, and ensure access to electricity at the lowest cost. There is a policy failure in regional transmission cost allocation due to a failure in the overarching regional transmission planning process, named the “planning paradox.” An integrated literature review was conducted through a survey of reputable publications to synthesize the current policy state of regional transmission cost allocation procedures and identify improvements. The representative literature was used to generate new perspectives and make policy recommendations. The results found dual improvements to regional cost allocation and planning procedures would maximize efficient transmission deployment at 2.3%/year and solve the “planning paradox.” Policy recommendations include standardized improvements to benefit assessment, encouragement of the multi-value portfolio approach for project evaluation, increased stakeholder and state involvement, and increased transparency between local and regional planning. Additional recommendations include voluntary participation in joint planning and improved coordination between interconnection processes and regional planning.