PRESS RELEASE
For Immediate Release: July 24, 2024
CONTACT: Andrew Jefferis, ajefferis@aii.org
Washington, D.C., July 24, 2024 – The Alliance for Innovation and Infrastructure (Aii) today released a new report titled “Building New Critical Infrastructure: No Time to Waste.” The report examines the intricate landscape of electrical transmission infrastructure development in the United States, shedding light on the critical factors influencing project costs, timelines, and regulatory frameworks.
The report focuses on evaluating cost transparency between a federal right of first refusal and competitive bidding in electrical transmission infrastructure expansion and serves as a literature review on battling stakeholder perspectives over the past decade. In summarizing the ongoing debate, Aii also emphasizes the cost impact on large-scale infrastructure projects.
Key highlights from the report include:
Competitive Bidding vs. ROFR Models: Aii’s analysis reviews the efficiency of competitive bidding processes against traditional incumbent ROFR models. While reports favorable to competition in the past have purported to show cost savings, recent data on completed transmission projects have undermined those claims on the whole. Recent reports favoring ROFR demonstrate comparable performance in costs and project timing between incumbent utilities and independent transmission developers. These findings suggest that the time frame for administering the competitive bidding process is an unnecessary delay to brining more power online faster.
Impact of Time as a Cost: The report identifies two cost impacts from delays:
- Direct costs, which come from cost escalations like inflation, throughout the long timeline to build a transmission line. The longer the process, the more opportunity for escalations. These directly affect the total cost of the project and what ratepayers see in utility bills.
- Indirect costs, which are borne by the wider region include congestion pricing and unrealized gains or missed investments while power projects are not connected. Delays to connecting power mean some regions may lack more efficient power options or lack access to power needed to facilitate large projects like data centers.
Innovation and Technology: Aii highlights the role of innovation and technological advancements in enhancing grid resilience and operational efficiency. It discusses how new technologies can contribute to cost savings and sustainability goals within the transmission sector.
“At Aii, we recognize the pivotal role that transmission infrastructure plays in powering economic growth and fostering energy security,” said Benjamin Dierker, Executive Director of Aii. “Our report provides an overview of the challenges and opportunities associated with modernizing our nation’s electrical grid, offering insights to guide policymakers and industry leaders as they resolve the process that will govern our infrastructure buildouts for the next generation.”
“As our nation seeks to modernize its infrastructure to meet evolving energy demands, it is crucial to align regulatory policies with economic realities and technological advancements,” added Andrew Jefferis, Media Coordinator for Aii. “Aii’s newest report serves as a valuable resource for stakeholders navigating the complexities of transmission infrastructure development, offering insights to drive informed decision-making.”
Read the full report here.
For questions, interviews, or other media inquiries, please email Aii Media Coordinator, Andrew Jefferis, ajefferis@aii.org.