Utility profits are soaring on the backs of captive electric ratepayers while policymakers fail to act on common-sense policy guaranteed to reduce consumers‘ electric bills. If America knows one thing, it’s that competition reduces costs, increases innovation, and delivers better value to consumers. Competition is baked into our country’s DNA and is a foundational principle of our country’s success.
From the onset of President Donald Trump’s second term in office, he has made clear that his administration prioritizes competitive markets. An April 2025 executive order, “Reducing Anti-Competitive Regulatory Barriers,” directs agencies to dismantle rules that shield companies from competition. Despite that, only around 5% of all new transmission lines are competitively bid, and despite Federal Energy Regulatory Commission Order 1000, a regulation that requires utilities to compete with one another to build regionally planned transmission lines. Without competition, a monopoly utility has no incentive to reduce costs because the more it spends, the more its profits increase.
Recommended Stories
There are significant planned increases in utility transmission spending. Edison Electric Institute forecasts that its member utilities will spend $138 billion on new transmission projects from 2026 to 2028, doubling the annual rate of the previous nine years.
State and federal policymakers fail to grasp the significance of what is happening to ratepayers right under their noses. After FERC transmission incentives of 10%-12% return on equity are added to the $138 billion in capital spending and financing costs are added, the actual cost to the consumer is estimated to double to $276 billion over the 40-year life of the transmission line. The costs are automatically passed on to unknowing captive ratepayers who have no idea that, each year, another wave of higher electricity rates will show up on their monthly bills.
Increasing electricity affordability is a bipartisan issue, yet there is zero focus on it in Washington despite calls from consumer organizations. On Feb. 17, 105 consumer organizations from across the country sent a letter to the FERC asking the agency to unleash transmission competition in building new transmission projects, and several transmission-related complaints have been filed but not acted upon by the FERC.
The utilities remain entrenched and opposed to competition to protect their profits. In April, nine utilities filed a complaint at the FERC requesting that it prohibit competition in the 19-state Midcontinent Independent System Operator and Southwest Power Pool regions for the next five years. Doing so would increase electricity rates for 40 million households and 3 million businesses. Consumer groups and 56 state legislators from Iowa, Kansas, Montana, Missouri, and Wisconsin filed comments urging the FERC to uphold competition.
A May R Street Institute study proves that competitive projects are delivered on time more often than projects built without competition. The pending utility complaint is really about the utility’s fear of competing and possible loss of profit.
When utilities are required to compete, they sharpen their pencils, include cost-containment provisions, and some even commit to financial penalties if they do not deliver the project on time. The R Street Institute report consistently points to an average cost reduction of 30%. This means that if the EEI projected transmission spending of $138 billion for the next three years were to face competition, consumers could save over $41 billion.
AMERICA IS HAVING THE WRONG DATA CENTER CONVERSATION — AND ITS SHOOTING US IN THE FOOT
The Electricity Transmission Competition Coalition examined 15 noncompetitive transmission projects, and not only were there no cost reductions, but these projects showed there was an average cost overrun of 84%, costing ratepayers $4.8 billion.
Consumers are cautiously optimistic that the FERC will act in their favor, recognize this as crony capitalism, and fulfill its congressionally authorized mandate to ensure that electric rates are just and reasonable. Consumers universally believe that rates cannot be just and reasonable unless the transmission projects face competition.
Paul Cicio is chairman of the Electricity Transmission Competition Coalition and president of the Industrial Energy Consumers of America.
