A Smarter Way to Pay: Public Financing for Affordable Transmission Development in New England

The report argues that New England's transmission costs are the highest in the U.S., driven by a lack of cohesive planning and a reliance on expensive private capital. It proposes replacing private equity and debt with low-cost, tax-exempt public financing, which could save ratepayers up to $8.3 billion on new transmission and $1.1 billion on asset condition projects. The authors suggest several implementation pathways, including integrating public financing into ISO New England's Longer-Term Transmission Planning (LTTP) process or creating new state transmission authorities.

• New England has the highest transmission costs in the United States, with 2024 rates at $25 per megawatt-hour, representing 30% of wholesale energy costs. These rates are more than double those found in the PJM, MISO, ERCOT, and NYISO grid regions.
• Significant investment is required for the region's grid: $11.9 billion is already proposed or under construction for local 'asset condition projects' to replace aging infrastructure, and ISO New England estimates an additional $16 billion to $26 billion is needed over the next 25 years for regional transmission to meet reliability and decarbonization goals.
• Current transmission financing relies on a mix of private equity and debt with an all-in, pre-tax cost-of-capital of 10.12%, which the report describes as overweighted toward utility shareholder profit. Under this status quo, ratepayers effectively pay $3.3 billion to finance a $1 billion transmission line over a 40-year period.
• Public financing models using project revenue bonds could significantly reduce costs. For new transmission, these models could save customers more than $8.3 billion (a 43% reduction), and for asset condition projects, they could deliver $1.1 billion in savings (a 34% reduction).
• There are multiple pathways for implementation, including integrating public financing into ISO New England’s Longer-Term Transmission Planning (LTTP) process or the Voluntary Agreement mechanism. Alternatively, states could strengthen existing financing entities (such as MassDevelopment or the Rhode Island Infrastructure Bank) or create new dedicated transmission authorities.

APA

Dickerson, J., Landau, K., Pavia, N., & Poplavska, A. (2026). A Smarter Way to Pay: Public Financing for Affordable Transmission Development in New England. Clean Air Task Force. https://cdn.catf.us/wp-content/uploads/2026/05/18194140/smarter-way-to-pay.pdf

Chicago

Dickerson, Jamie, Kelsey Landau, Nicole Pavia, and Anya Poplavska. A Smarter Way to Pay: Public Financing for Affordable Transmission Development in New England. Clean Air Task Force, 2026. https://cdn.catf.us/wp-content/uploads/2026/05/18194140/smarter-way-to-pay.pdf.

Wikipedia

{{cite report |last1=Dickerson |first1=Jamie |last2=Landau |first2=Kelsey |last3=Pavia |first3=Nicole |last4=Poplavska |first4=Anya |title=A Smarter Way to Pay: Public Financing for Affordable Transmission Development in New England |publisher=Clean Air Task Force |date=May 2026 |url=https://cdn.catf.us/wp-content/uploads/2026/05/18194140/smarter-way-to-pay.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{dickerson2026smarter, author = {Dickerson, Jamie and Landau, Kelsey and Pavia, Nicole and Poplavska, Anya}, title = {{A Smarter Way to Pay: Public Financing for Affordable Transmission Development in New England}}, institution = {Clean Air Task Force}, year = {2026}, month = may, url = {https://cdn.catf.us/wp-content/uploads/2026/05/18194140/smarter-way-to-pay.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }