The Importance of Open and Transparent Cost Allocation in Transmission Planning

Transmission planning may not seem like the most glamorous topic, but it’s potentially a huge stumbling block to planning critical grid upgrades. As we push toward a more resilient, reliable, and sustainable grid, the Southeast faces a critical moment in determining how the costs for long-term regional transmission projects are shared. A recent decision by the Southeastern Regional Transmission Planning (SERTP) to hold closed-door meetings with state regulators regarding cost allocation is sparking concern among developers, industry stakeholders, and advocates of transparency.

These discussions between state regulators and their utilities are a requirement of FERC Order 1920, which mandates that transmission cost allocation should reflect benefits to the diverse stakeholders reliant on the transmission system. Unfortunately, the current approach taken by SERTP to exclude public and industry stakeholders risks missing the broader insights and benefits of open dialogue.

Closed-door decisions on cost-sharing can have serious consequences, affecting not just utilities and regulators, but also generation developers and other stakeholders with a vested interest in the Southeast’s energy future. Transmission is a shared infrastructure with shared benefits—and shared costs. Excluding key voices from the decision-making process limits a fair, well-rounded perspective, which is essential when assigning costs that will impact energy pricing and access across the region.

The stakes are high. Transparent engagement ensures that a broad range of stakeholders—including developers who are crucial to meeting future resource needs—have a say in decisions that impact them directly. Not only would public involvement enhance trust, but it would also enrich the process by incorporating diverse perspectives on the benefits of planned transmission projects. Moreover, experienced stakeholders, such as the Southern Renewable Energy Association (SREA), bring valuable insight from past cost allocation discussions in other regions. This experience could be invaluable as the Southeast navigates cost-sharing for new, transformative transmission investments.

In other regions, transparent forums are already in place to allow public involvement in cost allocation decisions. The Midwest ISO’s Regional Expansion Criteria and Benefit Working Group (RECBWG) and the Southwest Power Pool's Cost Allocation Working Group (CAWG) have successfully integrated public access and commentary in their proceedings. These Regional Transmission Organizations (RTOs) have shown that not only is it feasible, but it is also beneficial, fostering a more inclusive, credible, and robust transmission planning process.

With SERTP’s State Engagement Period launching on November 14th, now is the time to ensure that all impacted stakeholders have the opportunity to participate. Providing remote access to these meetings would be a practical, simple solution to guarantee transparency, similar to platforms used for legislative hearings or public service commission meetings. Inviting public stakeholders to the table would enable a fair and balanced approach, leveraging the expertise and insights of those who understand the practical and economic implications of transmission decisions.

Involving stakeholders strengthens the decision-making process by fostering collaboration and ensuring that the long-term needs of all who rely on the grid are adequately represented. The Southeast’s future prosperity depends on fair and thoughtful cost allocation, and on ensuring that all voices are heard as we work toward a reliable and efficient grid.

​Simon Mahan is SREA's Executive Director