Electric markets

I have worked in American energy policy for decades, and was enthused to see your coverage of the Federal Energy Regulatory Commission, which oversees the interstate transmission of energy (“What the FERC”, April 27th). The article didn’t capture the importance of the final rule set to be released by the FERC on May 13th, the most significant decision the agency will make for a generation. At the heart of the issue is competitive markets versus monopoly power.

The Economist routinely points out that free and fair markets deliver better outcomes for consumers. Transmission lines are no different. A study by Princeton University found that America will need to spend $2.5trn on additional capital investment by 2050 to reach its net-zero goals. Competitive bidding can lead to savings of 40%.

If all new transmission projects were competitively bid, ratepayers could save an estimated $840bn by 2050. If the FERC fails to embrace competition in its proposed rule, ratepayers and their wallets will feel the effects of the clean-energy transition for decades to come. This is a clear example of how free markets give consumers better outcomes. The FERC must endorse competition and so should The Economist.

PAUL CICIO

Chair

Electricity Transmission Competition Coalition

Washington, DC