5 Myths Behind Efforts to Stop Cost-Saving Competition for Electric Transmission Line Projects

“Competition doesn’t work.”

It’s hard to believe that anyone in America would make that claim – but that’s exactly the argument made by those who think multi-million-dollar contracts for building new electric transmission lines should not be competitively bid. Anti-competition forces have gone so far as to try to outlaw it in Iowa, Illinois, Kansas, Oklahoma and Missouri – and may try again in 2025.

Competition is a bedrock American value. And allowing companies who want lucrative construction projects to compete for them is just plain common sense. Staying true to these common-sense American values is also best for the consumer. When it comes to building electric transmission lines, competition delivers affordable, reliable and innovative transmission we all rely on.

The opponents of competition like to tell a different story – but it’s just fake news. Let’s tackle their myths and highlight the benefits that competition brings to transmission projects.

Myth 1: Competition and Cost Savings

One of the most prevalent misconceptions is that competition does not meaningfully reduce costs. However, studies show that competition drives prices down in transmission projects, with great savings for consumers. The Electric Transmission Competition Coalition found that “If all new transmission projects were competitively bid … ratepayers could save an estimated $840 billion by 2050.” Other studies show that competition can save consumers 20-30%.

And when states eliminate competition, they’ve seen costs explode. For example, Minnesota eliminated competition and they’ve seen costs more than double, to an astronomical $1.14 billion.

Myth 2: Competition and Quality

A common concern is that competition will lead companies to cut corners, sacrificing quality to reduce costs. However, competition in transmission development has the opposite effect. When multiple firms compete for a project, they are motivated to present the most innovative and high-quality solutions to stand out from the crowd. For example, competitive bidding processes often lead companies to adopt advanced technologies. Transmission contracts resulting from competition can include performance incentives subject to rigorous evaluation by independent regulators.  These commitments can lead to more efficient project execution and cost control (MIT Center for Energy & Environmental Research). Rather than cutting corners, companies competing for contracts know that quality is non-negotiable.

Myth 3: Competition and Efficiency

Some argue that competition will complicate coordination and slow construction down. In reality, competition promotes efficiency. When multiple companies bid for a project, they know their plans will be scrutinized not only for cost but also for feasibility and timeliness. Competitive pressures motivate companies to find new ways to optimize project timelines and coordinate effectively, often introducing new tools or methodologies that increase operational efficiency. By setting high standards for all competitors, regulators ensure that the winning bid is both cost-effective and efficient, delivering on time without unnecessary delays.

Myth 4: Competition and Local Economies

Another misconception is that competition introduces financial risk, potentially impacting jobs and the local economy. But competition can spur local economic growth by attracting diverse companies that bring jobs, local investments, and infrastructure upgrades. Competitive bids often include commitments to local hiring and supply chains, making these projects beneficial to local economies while still securing the best possible price for consumers.

Myth 5: Competition and Project Timelines

Opponents sometimes argue that competition adds unnecessary delays due to the bidding and review process. In reality, competitive projects are often streamlined by clear timelines and milestone requirements set by regulators. Open competition can encourage faster project completion because companies are incentivized to propose efficient timelines and methods as part of their bids. Regulators can also enforce penalties for delays, encouraging developers to maintain efficient schedules.

The Case for Competitive Bidding in Transmission Projects

The arguments against competition are based on misconceptions. Competition in transmission projects encourages high standards, incentivizes efficiency, and results in substantial cost savings. By supporting open competitive bidding, we not only lower the financial burden on consumers but also accelerate the growth of modern, reliable transmission infrastructure essential for a resilient and clean energy future.

Let’s keep supporting competitive transmission to ensure a fair, efficient, and cost-effective energy landscape.