Inflation might have eased in recent months but one national group wants you to know—it did nothing to slow the rise of electricity rates. And one national energy leader says don’t expect a slowdown, thanks to action this week by the Federal Energy Regulatory Commission.
Paul Cicio, Chair of the Electricity Transmission Competition Coalition, said: “The inflation data released today confirms what we have been saying to FERC for two years – electricity transmission costs are escalating, and competitive bidding of large transmission projects is the only way to reduce costs for consumers.”
He pointed out that the Bureau of Labor Statistics confirmed this week the annualized 12-month electricity inflation price index increasd 5.1% and continues to outpace the Consumer Price Index by 50%. The CPI index grew by 3.4%.
Cicio, an opponent of ROFR laws or those that allow utilities to carry out construction projects without required competitive bidding said the price of electricity is growing because of accelerating transmission costs that are not subject to competition. He contends less than 10% of all transmission projects are competitively bid.
He also was critical of this week’s rules adopted by the Federal Energy Regulatory Commission to speed up large transmission line projects across the country.
“The pace of electricity inflation will continue to increase with Order 1920. The rule provided FERC with an opportunity to advance transmission competition and protect consumers from higher electricity costs and they did not. Hundreds of billions of dollars of consumer costs could have been avoided.”
Competitively bid electricity transmission projects have been shown to reduce costs to consumers by up to 40% according to The Brattle Group. A Princeton University study scenario concluded that the U.S. would need to spend $2.1 trillion on transmission by 2050, all of which will be passed onto homeowners, farmers, and business ratepayers.