New Grid Operator Study Highlights the Need for More Transmission
Missouri’s electric grid operators are requesting new transmission lines. Electric transmission lines carry power from power plants to homes and businesses. Too much power on the line increases the risk of damaging it, and as I’ve written previously, several parts of Missouri already have overloaded transmission lines.
More transmission lines will need to be built to relieve this congestion. The two regional electric grids that Missouri belongs to—the Midcontinent Independent System Operator (MISO) and the Southwest Power Pool (SPP)—have released a draft study identifying several points along their shared electric grid borders—including spots in Missouri—where new transmission projects can help relieve congestion and increase connectivity between different grids.
The study noted several benefits of a more interconnected transmission network. Given that MISO and SPP’s wholesale energy markets select the lowest-cost electricity sources to meet regional demand, a more connected grid allows the most efficient power plants to produce electricity for a wider region. Greater transmission connection also increases reliability, as more power can flow between larger geographic areas in case one spot has trouble meeting electric demand.
The study estimated that the total benefits to customers in the MISO and SPP regions would be roughly $1 billion, savings which would cover a little over half of the expected $1.8 billion cost. It is important to note that these numbers are self reported, although the benefits of more integrated markets and transmission networks are widely understood.
Evidently, the need for expanded transmission capacity in Missouri has caught state legislators’ eyes. However, as I described recently, the bills in the House and Senate take the wrong approach to building out more transmission capacity. These bills give incumbent utilities veto power for new transmission construction proposals. Instead, Missouri should embrace a competitive bidding process, which on average cuts costs by 40 percent.
Electric delivery costs, which include transmission and distribution, are a growing fraction of the cost of providing electricity to customers. Given Missourians’ already rapidly rising electricity bills, policymakers should be keen on finding ways to reduce costs.
Missouri could benefit from expanded electricity transmission, but there are good ways and bad ways to go about doing that. Let’s hope legislators come down on the side of market forces and competition.