High Voltage, High Rewards Transmission

This technical appendix details the benefit-cost analysis (BCA) methodology used by RMI to evaluate seven transmission projects. It outlines the calculation of three core benefits—congestion relief, resource adequacy, and public policy savings—and describes the financial models used to determine costs based on ownership structure (investor-owned, public power, or independent merchant).

• The analysis quantifies transmission benefits through three primary categories: congestion relief savings, which reduce fuel and variable operating costs; resource adequacy savings, which reduce capital and fixed costs for power plants; and public policy savings, which measure the benefit of enabling low-cost renewable energy deployment.
• Congestion relief savings are calculated ex-post using historical locational marginal prices (LMPs) between a project's starting and ending nodes multiplied by the estimated power transfer capacity, rather than using traditional production cost simulators.
• Public policy savings are determined by identifying 'enabled' wind and solar plants—those located within 15 miles of the project and energized after it became operational—and comparing their levelized cost of energy (LCOE) to the RTO-wide average.
• Transmission costs are modeled over a conservative 40-year financial life. For investor-owned utilities, the annual revenue requirement includes interest, return on equity, depreciation, state and federal taxes, fixed operation and maintenance (estimated at 1% of construction costs), and property taxes (estimated at 0.6% of depreciated asset value).
• The report identifies several conservatisms in its approach that likely lead to an underestimation of net benefits, including the exclusion of additional benefit categories recognized by MISO and The Brattle Group, and the failure to account for the 'true counterfactual scenario' where price disparities would be higher without the transmission line.
• The analysis may overestimate congestion relief savings for interregional projects due to 'seam-related inefficiencies' between markets, such as the finding 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} }