High Voltage, High Rewards Transmission

The document outlines a framework for evaluating the economic impact of transmission infrastructure, focusing on three primary benefit categories: congestion relief, resource adequacy, and public policy savings. It describes the specific calculations used for these benefits, the financial models applied to different ownership structures (investor-owned, public power, and merchant developers), and compares the results against original project projections for three specific case studies. The authors acknowledge several conservatisms in their approach, including the exclusion of certain benefit categories and the use of isolated line capacity estimates rather than complex power flow simulations.

• The analysis quantifies transmission benefits through three core metrics: congestion relief savings (reductions in fuel and variable operating costs), resource adequacy savings (reductions in capital and fixed costs to meet reliability standards), and public policy savings (reduced costs of renewable energy production in resource-rich areas).
• To calculate public policy savings, the study identifies 'enabled' wind and solar plants located within 15 miles of a project that were energized after the transmission line became operational, comparing their levelized cost of energy (LCOE) to the regional transmission organization (RTO) average.
• The financial model for transmission costs varies by ownership structure: investor-owned utilities include a return on equity and taxes, public power utilities focus on debt service coverage without taxes or equity returns, and independent merchant developers are modeled based on lease charges for transmission rights.
• The report compares its findings with original projections for three projects: the Paddock to Rockdale line (original median benefit-to-cost ratio of 3.2), the Beaver to Oklahoma City project (original ratio of 1.48), and the Valley to Colorado River project (original ratio of 1.2–3.2).
• The authors state that their net benefit estimates are likely conservative because they omit several benefit categories identified by MISO and The Brattle Group, and do not account for the seven specific benefits required by FERC Order No. 1920-A.
• The analysis may overestimate congestion relief savings for interregional projects due to market-seam inefficiencies, noting that power flows in the wrong direction between PJM and MISO approximately 45% of the time.

APA

Farrell, T., Tandon, C., Bendix, B., & Teplin, C. (2025). High Voltage, High Rewards Transmission. RMI. https://rmi.org/wp-content/uploads/dlm_uploads/2025/02/High_Voltage_High_Rewards_Appendix_C.pdf

Chicago

Farrell, Tyler, Celia Tandon, Beverly Bendix, and Charles Teplin. High Voltage, High Rewards Transmission. RMI, 2025. https://rmi.org/wp-content/uploads/dlm_uploads/2025/02/High_Voltage_High_Rewards_Appendix_C.pdf.

Wikipedia

{{cite report |last1=Farrell |first1=Tyler |last2=Tandon |first2=Celia |last3=Bendix |first3=Beverly |last4=Teplin |first4=Charles |title=High Voltage, High Rewards Transmission |publisher=RMI |date=February 2025 |url=https://rmi.org/wp-content/uploads/dlm_uploads/2025/02/High_Voltage_High_Rewards_Appendix_C.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{farrell2025high, author = {Farrell, Tyler and Tandon, Celia and Bendix, Beverly and Teplin, Charles}, title = {{High Voltage, High Rewards Transmission}}, institution = {RMI}, year = {2025}, month = feb, url = {https://rmi.org/wp-content/uploads/dlm_uploads/2025/02/High_Voltage_High_Rewards_Appendix_C.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }