Transmission at a crossroads: Policy must reflect today’s infrastructure needs

In the early days of his second term, President Donald Trump committed to unleashing American energy “dominance” through deregulation and a commitment to speeding up development of energy infrastructure. This is a promising idea. The United States certainly has the drive and know-how to develop infrastructure at scale — just look at the development of the interstate highway system. The new administration has set the tone for a new focus on energy infrastructure; now it’s time for industry and policymakers to work together to bring this vision to fruition.

Where to begin? While all types of infrastructure deserve support, one priority remains clear: the crucial need to invest in our country’s electric transmission grid. To that end, we need policy that promotes — not hinders — transmission investment.

A secure, reliable grid is essential to support national security and drive economic competitiveness. However, much of the grid is aging and in need of replacement, and investment is needed now to ensure we can continue to deliver affordable, reliable power to everyday Americans. But replacement alone is not enough. The grid also must be significantly expanded to support reshoring of industry and the development of power-hungry AI data centers that will drive the jobs of tomorrow. To unleash these investments and meet increasing demand, regulatory streamlining is needed.

Currently, it takes several years to plan, permit and build transmission projects, and existing policy is contributing to this delay. One such policy, an obscure federal regulation known as FERC Order 1000, requires that our grid operators conduct a long, bureaucratic process to determine which entities will develop needed transmission lines. In practice, this process can add as much as two additional years to development timelines for major projects, delaying the delivery of benefits to our communities.

The negative effects and obstacles to transmission infrastructure development are illustrated in a recent whitepaper from the Developers Advocating Transmission Advancements Coalition through real-world case studies from all across the country.

For example, the report highlights a case where Order 1000 requirements led developers to select unfeasible routes (using Google maps), eventually requiring the aid of local electric companies to reroute and fix the issue. Another example in New England demonstrates a scenario where developers seeking to win a project were too optimistic and unrealistic about cost expectations, ultimately resulting in termination of the project and sending planners back to the drawing board.

Across these examples, the evidence reveals that these processes have failed to provide cost-saving benefits to customers and do not promote the buildout of infrastructure for a more reliable, efficient grid that is capable of meeting today’s demand.

To strengthen our grid, we need clear federal policies that enable efficient transmission development and that consider the real-world implications of how regulatory decisions will impact national imperatives to get transmission built faster. State and federal rights-of-first-refusal (ROFR) — an equally obscure policy remedy — are an essential part of this solution.

Order No. 1000 removed ROFRs for local energy companies, allowing outside developers with no knowledge of the system to claim a stake in the grid and transmission development, leading to predictably poor results. ROFRs re-establish certainty — which is critical to our evolving energy landscape — by relying on local transmission owners with deep knowledge of local communities to promptly move ahead with needed projects.

FERC’s Order No. 1000 was intended to foster competition and innovation in transmission development but has largely led to delays and inefficiencies. To address this and meet today’s energy needs, FERC — and decision makers on all levels — can now take action to streamline transmission policy, reduce regulatory bottlenecks and incentivize investment. The vision for an abundant energy future has been set, but the hard work begins now. Let’s get to work.