THE BRATTLE GROUP

planning regions. So far, we find that neither FERC Order 1000 nor state policy initiatives have had
any discernable impact in this regard.
Nevertheless, the important role of policy makers and regulators in influencing the scope of
regional (and interregional) transmission planning efforts is a reality. It means that the regional
planning groups are unlikely to be motivated to improve their transmission planning processes for
economic and public policy projects unless policy makers and regulators actively encourage and
support such improvements. This requires policy makers to recognize the broad range of benefits
and risk mitigation that a more robust transmission infrastructure can provide and encourage
planning entities to consider these benefits in their planning efforts. In addition, it will be
necessary for the boards and executives of the various planning entities to recognize these benefits
of a more robust and flexible bulk power system, such that they can provide the appropriate
guidance and encouragement to their transmission planning staff.
To mitigate risks and pursue true “least regrets” planning, we recommend that policy makers and
regulators more actively encourage planning entities to improve the region’s understanding and
recognition of the high costs and risks that an insufficiently robust and insufficiently flexible
transmission infrastructure can impose on customers and the power system as a whole under
challenging market conditions, major contingencies, and changing environmental policies. We also
recommend that state and federal policy makers and regulators look beyond considering each
individual transmission project and the immediate need that a particular project might address.
Such project-by-project assessments of individual needs tend to reinforce the compartmentalized
approach of current planning processes. Instead, we encourage policy makers and regulators to
consider the overall value that a portfolio of proposed transmission investments can provide and,
whenever specific needs are identified, consider a wider range of solutions that can address the
identified needs, including using those opportunities to identify and evaluate broader solutions that
can provide benefits in addition to addressing the specific needs. As noted earlier, such assessments
of broader solutions should take into consideration the transmission-related benefits given the
short-term market and operational volatilities as well as the longer-term changes associated with
public policies and market structure faced by the electric power industry today.
V. Interregional Transmission Planning
This section of our report first discusses the current status of interregional planning efforts and then
identifies specific gaps and barriers to assessing the effectiveness of the currently used or proposed
interregional planning processes. We then offer recommendations to address the identified
deficiencies to improve the planning processes.
Planning of interregional transmission infrastructure for economic and public policy needs is still in
its infancy. While transmission planning processes are well defined within regions, particularly to
address reliability needs, planning processes for transmission upgrades across regional boundaries
are largely ineffective. This is the case particularly because the potential benefits of interregional
transmission infrastructure are poorly understood. Even if an intuitive understanding of these
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