Indiana Capitol Chronicle examines Indiana's elimination of competitive bidding in "right of first refusal" bill, quoting Trish Demeter's perspective on the importance of maintaining competitive processes for success transmission infrastructure development.
Indiana’s Senate Utilities Committee on Thursday narrowly passed a contentious bill that critics say would stifle competitive markets and add unnecessary costs to energy infrastructure projects. House Bill 1420 advanced 6-5 to the Senate, with bipartisan opposition, following hours of testimony.
“Incumbent” Indiana utility companies already have a “right of first refusal” to build, own, and operate new transmission lines in their service area. But the bill expands that to inter-regional transmission projects. This prevents new projects from being competitively bid on by other energy companies outside of that territory that would then retain an ownership stake.
Critics argue that the proposal would stifle innovation, while also increasing costs for Hoosier ratepayers. They maintain that — without a comprehensive competitive bidding process — certain utilities would have even greater power to restrict competition and raise rates.
“Transmission infrastructure is the backbone of our country’s power system, ensuring that Americans across the country have continuous access to affordable reliable electricity to power their homes and businesses and neighborhoods,” said Trish Demeter with Advanced Energy United, a trade association representing the advanced energy industry.
“Competitive processes for building, owning and operating this transmission infrastructure reduces risk to consumers here in Indiana and spurs innovations and increases transparency around the cost and processes for building these projects,” Demeter continued. “Allowing the competition to work and allowing all — either incumbent or competitive operators — to compete for these processes will bring the best projects and the best owners and operators forward.”
Utilities currently have rights of first refusal for transmission projects within their own territory, but the Federal Energy Regulatory Commission, or FERC, passed a rule a decade ago eliminating that right for cross-border projects. Soliday’s bill would return that right of first refusal to Indiana’s major, “incumbent” utilities when it comes to inter-regional transmission projects. The bill does require utilities to use competitive bidding when they subcontract out construction portions of their projects.
Those opposed to Soliday’s bill said it will further undermine competition against monopoly utilities — which is essential to keeping electric bills down.
Read the full article here.