THE BRATTLE GROUP

een called “anticipatory transmission planning.” 6 Scenario planning can be used to anticipate
how generation, both dispatch and investment, will perform in response to changes in
transmission capacity, access, and congestion relief. A proactive planning approach that
anticipates the needs of the market and applications of new technology will prove to be the most
prudential in the long run. In sum, transmission planning that does not include an evaluation of
all potential benefits, does not fully consider risks, and lags generation investments is becoming
less and less defensible.
The authors of this report argue that, once planners and policymakers understand the
tremendous risks and costs to consumers and the economy of not developing a transmission
system capable of accommodating the multiple potential outcomes for the electricity future, they
will opt for a more strategic approach to planning the grid. The uncertainties facing the industry
are apparent and the temptation to plan reactively and only for operational eventualities that are
already known and foreseeable is indeed great. Based on this study, however, WIRES is
persuaded that there is an equally responsible and far more productive way to approach
planning for investment in new transmission assets and to ensure a salutary benefit-to-cost ratio
over the long haul. Incorporating real “risk mitigation” 7 into the planning process is the key to
addressing the deficiencies in current transmission planning and the sub-optimal results it is
likely to produce. Among other things, it necessitates consideration of a broader range of
transmission benefits when calculating the benefit-to-cost ratio of a proposed project and the
explicit evaluation of short- and long-term risks. It also involves a strategic vision of the electron
superhighway as the foundation of the future electricity marketplace. Undeniably, there will be
costs associated with such regulated investments. But, as discussed herein, the diverse
benefits of a more robust and more flexible transmission system are likely to exceed those
costs, sometimes exponentially.
We nevertheless recognize that changing planning practices is hard. Specious but
beguiling arguments that technology will soon render the integrated grid obsolete compound the
difficulty. In the end, the report makes clear that the U.S. and Canada will incur far greater
6 Id., at 3.
7 One prevalent worry among planners, customers, and policy makers about the risks associated with transmission
investment is, for example, that ratepayers or society will end up with $90 million in benefits after spending $100 million
on a project. An equally important consideration is what not building the project would mean; i.e., how great are the
chances that customers would be somewhat worse off or several multiples worse off without the project, as compared to
the probability that they would be better off? As the Brattle report demonstrates, this type of calculus is uncommon in the
transmission business, although not without precedent.