By Paul Cicio
FERC Chair Mark Christie’s five-year term officially expired June 30, yet Senate gridlock over unrelated issues means President Trump’s nominee, Laura Swett, is unlikely to be confirmed any time soon.
Christie, a vocal critic of high transmission costs and transmission incentives “candy” that impact every consumer in the nation, has only a couple of weeks to act to reduce consumer costs. The question is, will his tenure end in a bang or a whimper? He has the desire and intent, but will Commissioners Rosner, See and Chang follow his lead?
In his July 24 monthly meeting press conference, Christie said transmission costs are responsible for increasing electric rates being imposed on every consumer in the nation. Electricity prices are escalating nationwide despite the fact that until recently, demand has been flat. Each year for the past 10 years or so, monopoly utilities have spent billions of dollars per year on transmission and less than 10 percent of these transmission projects were competitively bid, which would have reduced consumer costs.
Economists frequently comment on rising inflation but miss the fact that electricity prices, which typically are stripped out of core inflation measurements, have consistently exceeded the consumer price index. The consistency of these price increases goes back longer than the AI-driven data center boom, and other inflationary factors. It is a price response to a policy problem: a lack of competition.
PJM, the largest RTO in the country, is a cautionary tale. In 2014, transmission charges were 6.8% of the PJM wholesale price. A decade later, they are over 32%, even though demand has barely moved.
Where projects have been competitively bid, consumers have seen cost reductions of up to 40%. More than $100 billion in new transmission projects are in the planning stage or in implementation, which should give FERC impetus to act to reduce costs.
Failures by FERC, RTOs and states to embrace and enforce competition are at the heart of high transmission costs. Electric utilities spend tens of millions of dollars per year lobbying to protect their monopoly and have largely succeeded. Homeowners have no idea that their utility is putting profit over the interests of their customers. Utility actions to prevent competitive bidding of transmission lines is anti-consumer, anti-competitive, anti-market and anti-American.
Consumers support competition, as does President Trump. One of his executive orders calls for each federal agency to root out regulations that are harmful to competition. Trump has pledged to reduce the cost of energy, and this is a good example of regulations that are anti-competitive and drive up the price of electricity for decades to come.
When a new transmission line is put into the rate base, consumers will pay for it over the next 40 years or more. Added to the cost of the transmission line is a rich ROE and financing costs that can increase the total cost by seven to eight times.
Building transmission lines is a lucrative business for utilities, which is why they fight against competitive bidding of transmission lines at FERC, at RTOs and in their states. In 2024, utilities pushed legislation in Oklahoma, Wisconsin, Indiana, Missouri, Illinois and Kansas that that instituted rights of first refusal, preventing transmission lines in their territory from being competitively bid.
The Industrial Energy Consumers of America has filed several legal complaints and motions for rehearing that have been sitting at FERC, some for months and others for years. Those filings would be a good place to start and also eliminate the “candy,” as Christie calls it. The candy is transmission economic incentives that are not needed, inflate costs and are inconsistent with “just and reasonable” rates.
Chairman Christie, the moment is now: Finish what you began and break the grip of monopoly transmission and escalating electricity prices. Let your tenure end with a bang.
Paul Cicio is president of Industrial Energy Consumers of America and is a consumer advocate.
