Your electricity bill is going up. Grid operators say they need billions in new transmission lines. Utilities are filing for rate increases to pay for them. What almost no one will tell you is that cheaper solutions already exist, are proven, and are being passed over on purpose.
Grids are built on a cost-plus-guaranteed-profit basis. This incentive leads to the deliberate choice to ignore the cheapest way to add grid capacity.
Two technologies could add 30 to 50 percent more capacity to existing transmission lines for a fraction of the cost of new construction.
The first is dynamic line ratings. A line's rated capacity is set conservatively, based on worst-case weather assumptions. Dynamic line ratings use real-time sensors to measure actual conditions and allow the line to carry more power when it can safely do so.
The second is reconductoring: replacing the wire on an existing tower with advanced composite-core conductors that carry roughly twice the current. Same towers. Same right-of-way. Same footprint. Double the capacity, in months instead of years.
Both are proven. Both are deployed in Texas and in Europe. Both are available now.
Neither is being widely built in American utility service territories. The reason is straightforward and expensive.
Regulated utilities are guaranteed a rate of return, typically 9 to 11 percent, on capital invested in infrastructure. A $5 billion transmission line earns them $250 to $400 million a year, billed to ratepayers. A $500 million reconductoring project delivering the same result earns them one-tenth as much. Paying for intermittent wind and solar, as well as full-time generation, also nets them more profits and us higher bills.
The utility executive who proposes the cheap solution is leaving money on the table. The regulator who approves the expensive one never has to explain why, because ratepayers never see the comparison.
This mechanism is not a conspiracy. It is an incentive. When a company is guaranteed a return on its spending, it spends more. The system was designed to work this way.
The costs are not hypothetical. The Midcontinent Independent System Operator (MISO), managing the grid for about 45 million people, has proposed $22 billion in new high-voltage lines. Costs will be spread across ratepayers, including many who will never receive power from those lines.
Meanwhile, more than 2,060 gigawatts of new generation sit in interconnection queues, some waiting five years or more, largely because the grid cannot accommodate them. Grid-enhancing technologies could move many forward at a fraction of the cost.
FERC has issued orders. States have passed laws. Trade associations have published reports. The upgrades still do not move at the scale our time requires, because the people with authority are systemically rewarded for choosing something more expensive.
The fix follows a simple principle: those who benefit pay, and those who decide what to build do not profit from the decision.
States should require utilities to disclose assessments of grid-enhancing technologies before any major transmission project is approved. If a cheaper alternative delivers comparable capacity, the utility must justify on the record why it was rejected, where ratepayers and their representatives can see it.
Transmission costs should follow the beneficiary-pays principle. If a new line primarily benefits Illinois ratepayers, then Illinois ratepayers, not families in Arkansas or Louisiana who never use the power it carries, should pay for it.
Socialized cost allocation is what makes gold-plated infrastructure so attractive. The company earns its profit while the costs dissolve across millions of bills in multiple states, too small on any single bill for most consumers to notice.
Real competition does not work this way. When Southwest Airlines found a faster way to turn planes around, it kept the savings. The incentive was to find efficiency, not avoid it. Regulated monopoly utilities face the opposite incentive, and they respond predictably.
The electricity generation and delivery system is broken. This rarely happens because the incentives are to spend more, not to innovate or lower costs. That would be bad for shareholders, but good for ratepayers.
Your electricity bill is not rising because the grid lacks solutions. It is rising because the parties that choose what to build are rewarded for ignoring the cheapest ones. That is a policy choice, and states have the authority to change it.
Frank Lasee is president of Truth in Energy and Climate.