Why Electric Transmission Lines are Important to Illinois Consumers
And how action by the Illinois General Assembly could result in higher electricity prices
Illinois consumers are feeling the heat, both from triple-digit temperatures and soaring electricity bills. Ameren customers are seeing 18–22% rate hikes. ComEd has customers paying triple-digit increases.
And in July, the PJM Capacity Auction hit record highs, a 22% increase over the previous auction, already a record high. This could lead to further electricity bill increases of 5%.
“Right of First Refusal (ROFR) Legislation and Transmission - Adding Fuel to the Fire
As frustration heats up, Illinois lawmakers must choose: support competition that drives prices down or fan the flames of electricity inflation with “Right of First Refusal” (ROFR) legislation.
ROFR gives incumbent utilities exclusive rights to build transmission lines, blocking cost-cutting competition and inflating prices. It’s so anti-competitive that two administrations opposed it; Trump in 2020 and Biden in 2023.
A majority of Illinois Voters Oppose Ending Cost Cutting Competition. Learn more from our survey.
Consumers Save Money When there is Competition for New Transmission Line Construction
Consumers could save between 20-30% from competition for the construction of new transmission lines according to a study by the Brattle Group.
These savings are in addition to Brattle’s findings that competition drives innovation which further mitigates cost and risk to consumers. Since the Brattle report, actual experience with transmission competition has shown the possibility of even higher consumer cost savings.
“The Illinois Commerce Commission believes that competition among transmission developers spurs innovative results and helps control costs.”
--Comments of the ICC to the Federal Energy Regulatory Commission
Some Illinois Utilities Want to Prevent Competition for Transmission Lines
Some incumbent utilities like Ameren and ComEd want to stop the competitive development of transmission. In short, they want to be the only ones with the right to build transmission lines in their service areas in Illinois.
“…[eliminating] the opportunity to bring competitive suppliers and competitive pressures into play for the benefit of consumers is the wrong policy direction.”
Illinois Legislature Sided with Incumbent Utilities Instead of Consumers
Unfortunately, the Illinois legislature voted to eliminate transmission line competition, siding with Ameren and ComEd over consumers. In May, 2023, the legislature passed a law called “ROFR” which stands for Right-of-First-Refusal.
ROFER means there is no competition for billion-dollar transmission line construction – unless the incumbent utility company in the service area “refuses” to build. Under ROFR in Illinois Ameren or ComEd get the contracts if they want them, without submitting competitive bids.
Governor Pritzker Vetoed ROFR
Governor Pritzker vetoed ROFR but Ameren and ComEd are expected to mount an effort to persuade the legislature to try again.
Others in Illinois also recognize the value of competition. The Illinois Citizens Utility Board stated that merchant electric transmission projects and their enhancement of competition would “exert a downward pressure on electricity and transmission costs for Illinois consumers, while also improving the quality of service provided by enhancing the resiliency and reliability of the grid.”