Comment of United States Department of Justice and Federal Trade Commission to the Federal Energy Regulatory Commission in Docket No. RM21-17-000

UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Building for the Future Through Electric
Regional Transmission Planning and
Cost Allocation and Generator
Interconnection
Docket No. RM21-17-000
COMMENT OF UNITED STATES DEPARTMENT OF JUSTICE AND
FEDERAL TRADE COMMISSION

1
I. 	INTRODUCTION
The United States Department of Justice (“DOJ”) and the Federal Trade Commission
(“FTC”) (collectively, the “Agencies”) appreciate this opportunity to share their views with the
Federal Energy Regulatory Commission (“FERC” or “the Commission”) in the above-captioned
proceeding. The Agencies commend FERC for considering how to better encourage needed
regional transmission planning and construction, and appreciate its consideration of the
initiatives proposed in its April 2022 Notice of Proposed Rulemaking (“NOPR”), Building for
the Future Through Electric Regional Transmission Planning and Cost Allocation and
Generator Interconnection.1 As the NOPR observes, in order to reliably and economically serve
consumers, additional investment in transmission facilities is required. A larger, and more
integrated, transmission system would allow for greater redundancy, which would promote
resiliency, and unlock the forces of competition, which can benefit consumers through access to
lower cost power and a wider range of generation resources.2 Many of the initiatives considered
in the rulemaking are consistent with competition principles.
The Agencies, however, are concerned that the reinstatement of a federal right of first refusal
(“ROFR”) is not justified. With a ROFR, consumers will lose the many benefits that
competition can bring, including lower rates, improved service, and increased innovation,
leading to a more efficient, reliable, and resilient grid. The rulemaking’s requirement that the
ROFR can be exercised only if the incumbent transmission provider establishes joint ownership
of the new transmission facilities does not alleviate the Agencies’ concerns. Like an
1 Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator
Interconnection, 179 FERC ¶ 61,028 (Apr. 21, 2022) (“NOPR”).
2 NOPR, PP 28-29.

2
unconditional ROFR, a conditional one displaces competition and thus forgoes the important
benefits that competition produces for consumers. The NOPR includes many proposals other
than the ROFR that may meaningfully improve regional transmission development. Until FERC
evaluates the impact of those proposals that it ultimately approves, there will be an insufficient
basis to conclude that transmission policy cannot harness the benefits of competition.
As President Biden’s Executive Order on Promoting Competition in the American Economy
explained, a “fair, open, and competitive marketplace has long been a cornerstone of the
American economy.”3 The President’s Executive Order specifically highlights FERC’s role in
protecting conditions of fair competition.4 The Order urges federal agencies to “further the
policies” of the Order “by, among other things . . . rescinding regulations that create unnecessary
barriers to entry that stifle competition.”5 Similarly, the Supreme Court has recognized FERC’s
obligation to consider competition policy, noting that the Commission’s “power clearly carries
with it the responsibility to consider, in appropriate circumstances, the anticompetitive effects of
regulated aspects of interstate utility operations…. The [Federal Power] Act did not render
antitrust policy irrelevant to the Commission’s regulation of the electric power industry.”6
Indeed, as the D.C. Circuit observed, “FERC’s authority generally rests on the public interest in
3 Exec. Order No. 14,036, § 1, 86 Fed. Reg. 36,987 (July 9, 2021).
4 Id., § 2(e) (noting that the agencies charged with protecting conditions of fair competition include FERC).
Commissioner Wilson has reservations regarding the use of “fair competition” rather than “competition.” Although
there may be a future debate regarding the differences between “fair competition” and “unfair methods of
competition,” the substance of today’s comment is not impacted by this distinction.
5 Id., § 2(g).
6 Gulf States Utilities Co. v. Fed. Power Comm’n, 411 U.S. 747, 758–59 (1973). The Court in Gulf States went on
to state that “within the confines of a basic natural monopoly structure, limited competition of the sort protected by
the antitrust laws seems to have been anticipated.” Id. at 759. Over the years, courts and FERC have refined their
understanding of which parts of the electricity industry are natural monopolies. See, e.g., Transmission Access Study
Group v. FERC, 225 F.3d 667, 683 (D.C. Cir. 2000) (per curiam), aff’d sub nom New York v. FERC, 535 U.S. 1
(2002). For example, Order No. 1000’s elimination of the federal right of first refusal was premised on the
efficiency benefits for transmission from competition by new entrants. See South Carolina Pub. Serv. Auth. v.
FERC, 762 F.3d 41, 77 (D.C. Cir. 2014).

3
constraining exercises of market power.” Nat’l Ass’n of Reg. Util. Comm’rs v. FERC, 475 F.3d
1277, 1280 (D.C. Cir. 2007).
Significant expansion of regional and interregional transmission will be needed to
accommodate growing demand, including the U.S. electricity sector’s transition to greater
utilization of renewable energy resources and to obtain other benefits outlined in the NOPR.7 In
a “Net Zero America” study conducted by Princeton University, the “high electrification”
scenario contemplates that in order to connect wind and solar facilities to demand, high voltage
transmission capacity must expand by 60 percent by 2030 at a capital cost of $330 billion, and
must triple by 2050 at a capital cost of $2.2 trillion.8 American consumers and businesses should
not be denied the benefits of competition when paying for this significant transmission
investment. Thus, consistent with longstanding antitrust policy generally disfavoring regulatory
barriers to entry, the Agencies have significant concerns about the proposed ROFR.
A. Agencies’ Interest
As the U.S. Government agencies responsible for promoting and protecting competition, the
DOJ and FTC are well-positioned to comment on the Commission’s proposed ROFR. The
Agencies are entrusted with enforcing the federal antitrust laws, which prohibit certain business
practices and transactions that harm competition and consumers. Competition is a core
organizing principle of the American economy,9 and vigorous competition gives consumers the
7 Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator
Interconnection, 176 FERC ¶ 61,024, P 28 (July 15, 2021); Comments of the U.S. Dep’t of Energy to Advance
Notice of Proposed Rulemaking, FERC Docket No. RM21-17-000, 1-2 (Oct. 12, 2021) (“DOE Comments”).
8 Eric Larson et al., Net-Zero America: Potential Pathways, Infrastructure, and Impacts, P RINCETON U NIV. 108
(Oct. 29, 2021), https://netzeroamerica.princeton.edu/the-report.
9 See, e.g., N.C. State Bd. of Dental Exam’rs v. FTC, 135 S. Ct. 1101, 1110 (2015) (referencing “the Nation’s
commitment to a policy of robust competition”); Standard Oil Co. v. FTC, 340 U.S. 231, 248 (1951) (“The heart of
our national economic policy long has been faith in the value of competition.”).

4
benefits of lower prices, higher quality goods and services, increased access to goods and
services, and greater innovation.10 The Agencies work to promote competition through
enforcement of the antitrust laws, which prohibit certain transactions and business practices that
harm competition and consumers, and through competition advocacy efforts, which urge federal,
state, and local governmental bodies to make decisions that benefit competition and consumers.
Those advocacy efforts include written comments on proposed legislation, discussions with
regulators, and court filings.11 In the Agencies’ experience, competition in wholesale electricity
markets and in the development of transmission facilities—including competition from
independent, transmission-only companies and other non-incumbent transmission owners—
produces important benefits for wholesale and retail electricity consumers.
Over the years, the Agencies have developed considerable expertise in examining wholesale
electricity markets, including through pursuing enforcement actions and evaluating the effects of
government regulations on competition in wholesale electricity markets and transmission
development.12 And the Agencies have drawn on this expertise to publicly advocate for market
10 See, e.g., Nat’l Soc’y of Prof’l Eng’rs v. United States, 435 U.S. 679, 695 (1978) (noting that the antitrust laws
reflect “a legislative judgment that ultimately competition will produce not only lower prices, but also better goods
and services. . . . The assumption that competition is the best method of allocating resources in a free market
recognizes that all elements of a bargain—quality, service, safety, and durability—and not just the immediate cost,
are favorably affected by the free opportunity to select among alternative offers.”).
11 Mission, ANTITRUST D IV., U.S. D EP’T O F J USTICE , https://www.justice.gov/atr/mission (last updated July 20,
2015); Mission, FED. T RADE COMM ’N, https://www.ftc.gov/about-ftc/mission (last visited July 27, 2022).
12 See, e.g., Competitive Impact Statement, United States v. Morgan Stanley, 881 F. Supp.2d 563, (S.D.N.Y. Sept.
30, 2011) (No. 11-cv-6875), https://www.justice.gov/atr/case-document/file/505056/download; Competitive Impact
Statement, United States v. Keyspan Corp., 763 F. Supp. 2d 633 (S.D.N.Y. Feb. 23, 2011) (No. 10-cv-1415),
https://www.justice.gov/atr/case-document/file/500576/download; Competitive Impact Statement, United States v.
Exelon Corp., No. 1:06-cv-1138 (D.D.C. Aug. 10, 2006), https://www.justice.gov/atr/case-
document/file/495451/download; Competitive Impact Statement, United States v. Enova Corp., 107 F. Supp.2d 10
(D.D.C. June 8, 1998) (No. 98-cv-583), https://www.justice.gov/atr/case-document/file/495196/download;
Comments of the U.S. Dep’t of Justice, FERC Docket No. RM99-2-000 (Aug. 23, 1999),
https://www.justice.gov/atr/comments-us-department-justice-0; Comments of the U.S. Dep’t of Justice, FERC
Docket Nos. RM95-8-000 & RM94-7-001 (Aug. 7, 1995),
https://www.justice.gov/sites/default/files/atr/legacy/2000/08/03/ferc2.txt; Reply Comments of the U.S. Dep’t of
Justice, FERC Docket No. RM94-20-000 (Apr. 3, 1995), https://www.justice.gov/atr/replycomments-us-department-

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reforms because of the expected benefits of competition for consumers. For example, in the
1990s, the DOJ publicly encouraged FERC’s efforts to unbundle wholesale generation and
transmission services and to develop an architecture to provide for competitive markets in
wholesale power.13 Similarly, in 2010, the FTC filed a comment with FERC in support of Order
No. 1000’s elimination of a federal ROFR.14
B. FERC’s NOPR
The Agencies recognize that there is a significant need for new regional and interregional
electric transmission lines, and that there has been insufficient investment thus far to meet the
need.15 FERC Order No. 1000 was an attempt in 2011 to expedite the building of such
transmission facilities and inject competition into the process by eliminating the federal ROFR
from FERC jurisdictional tariffs and agreements and by requiring that certain transmission
development projects with regional benefits be subject to competition.16 The proposed ROFR
justice; Letter from Daniel Haar, Acting Chief, Competition Pol’y & Advocacy Sec., Antitrust Div., U.S. Dep’t of
Justice, to Travis Clardy, State Rep., Tex. House of Rep. (Apr. 19, 2019),
https://www.justice.gov/atr/page/file/1155881/download; Analysis of the Complaint and Consent Order to Aid Pub.
Comment, DTE Energy Company and MCN Energy Group Inc., FTC Docket. No. C-4008 (Mar. 22, 2001),
https://www.ftc.gov/legal-library/browse/cases-proceedings/0010067-dte-energy-company-mcn-energy-group-inc;
Analysis of the Complaint and Consent Order to Aid Pub. Comment, Entergy Corporation and Entergy-Koch, LP,
FTC Docket. No. C-3998 (Jan. 31, 2001), https://www ftc.gov/legal-library/browse/cases-proceedings/0010172-
entergy-corporation-entergy-koch-lp; Comment of the Fed. Trade Comm’n, FERC Docket No. RM09-16-000 (Mar.
29, 2010), https://www ftc.gov/legal-library/browse/advocacy-filings/ftc-comment-federal-energy-regulatory-
commission-concerning-rulemaking-competitive-assessments.
13 Comment of the U.S. Dep’t of Justice, FERC Docket No. RM99-2-000 (Aug. 23, 1999),
https://www.justice.gov/sites/default/files/atr/legacy/2008/01/02/200221.pdf.
14 Comment of the Fed. Trade Comm’n, FERC Docket No. RM10-23-000 (Sept. 29, 2010),
https://www.ftc.gov/sites/default/files/documents/advocacy_documents/ftc-comment-federal-energy-regulatory-
commission-concerning-transmission-planning-and-cost.rm10-23-000/100929transmissionplanning.pdf.
15 NOPR, P 6 (“We are concerned that the absence of sufficiently long-term, comprehensive transmission planning
processes appears to be resulting in piecemeal transmission expansion to address relatively near-term transmission
needs”); P. R. Brown and A. Botterud, The Value of Inter-Regional Coordination and Transmission in
Decarbonizing the US Electricity System, 5 J OULE 115–134 (2021); see also Larson, supra note 5 (projecting under
one scenario that high voltage transmission capacity expands by 60 percent by 2030 and triples by 2050).
16 Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, Order No.
1000, 136 FERC ¶ 61,051 (2011).

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threatens to displace competition where it exists today for transmission design and construction
for certain new projects selected in a regional transmission plan.17
In explaining why regional and interregional development is not occurring at the desired pace,
the NOPR identifies a number of reasons unrelated to competition. These include the lack of
sufficiently forward-looking regional transmission planning processes;18 a failure to consistently
incorporate known determinants of transmission needs into forward-looking assessments (such
as information about impending retirements, the generation interconnection process, energy
efficiency improvements, risks of extreme weather, state laws, and other regulatory actions);19
and a failure of public utility transmission providers to accurately identify the benefits and
beneficiaries of regional transmission facilities.20
The NOPR also observes that there may also be competition-related reasons for the lack of
regional transmission development, stating that “it is possible that the Commission’s Order No.
1000 nonincumbent transmission developer reforms may in fact be inadvertently discouraging
investment in and development of regional transmission facilities to some extent. Incumbent
17 The proposed ROFR applies to new projects selected in a regional plan for purposes of cost allocation. For these
projects, costs are allocated to market participants under principles adopted in Order No. 1000, and FERC is
considering reforms in the current NOPR. See generally NOPR § 5.
18 As the NOPR explains, the “existing regional transmission planning processes may not be planning on a
sufficiently long-term, forward-looking basis to meet transmission needs driven by changes in the resource mix and
demand, leading to the piecemeal and inefficient development of new transmission facilities in a manner that is not
more efficient or cost-effective.” Id., P 64.
19 Id., P 52. The NOPR explains that failure to model factors such as these in regional assessments “may delay
planning for the transmission system’s changing operational needs until shortly before those needs manifest, despite
the fact that the continued shift in the resource mix and changes in demand can be reasonably forecast based on
known factors. … [T]he lack of sufficient long-term transmission planning appears to be resulting in significant
transmission investment in recent years occurring through generator interconnection processes to satisfy near-term
transmission needs, resulting in piecemeal development of transmission facilities that may not more efficiently or
cost-effectively meet transmission needs driven by changes in the resource mix and demand.” Id.
20 Id., P 53. The NOPR explains that “[f]ailing to adequately identify and consider the benefits of such transmission
facilities may lead to sub-optimal or inefficient investment therein … In addition, by not considering an expanded
set of benefits and beneficiaries, cost allocation methods may fail to assign the costs of such facilities to
beneficiaries in a manner that is at least roughly commensurate with the benefits they derive from them.” Id.

7
transmission providers, as a result of those reforms, may be presented with perverse investment
incentives that do not adequately encourage those incumbent transmission providers to develop
and advocate for transmission facilities that benefit more than just their own local retail
distribution service territory or footprint.”21 This dichotomy between competitive and
uncompetitive projects may lead incumbents to prioritize local projects over regional projects,
thus ensuring that incumbents monopolize new transmission investments.
To the extent that Order No. 1000 may have inadvertently led incumbent utilities to
overinvest in local transmission facilities at the expense of more efficient regional facilities, the
Agencies point out that this distortion has multiple causes, including ones that the NOPR does
not address. One cause is that the continued existence of ROFRs for local and other exempt
facilities gives incumbents incentives to invest in those facilities rather than pursuing regional
facilities that are subject to competition. Another cause raised by a number of commenters is the
continued existence of mechanisms that enable incumbent utilities to exert undue influence over
the allocation of ratepayer dollars between local and regional transmission projects.22 The
distortion could be resolved by addressing either of these causes. The Agencies therefore urge
FERC not to displace competition, but instead to consider solutions to utilities’ misaligned
incentives that are consistent with and promote competition. As discussed below, competitive
21 Id., P 350.
22 Comments of Advanced Energy Econ., FERC Docket No. RM21-17-000, 29 (Oct. 12, 2021) (“Advanced Energy
Econ. Comments”) (“Commenters have noted that shortcomings in existing transmission planning processes allow
incumbent transmission owners to exert undue influence over those processes to direct transmission investments to
local projects and away from larger regional projects that would be subject to competition from third-party
developers…”); Comments of the Resale Power Group of Iowa, FERC Docket No. RM21-17-000, 7 (Oct. 12, 2021)
(“Resale Power Group of Iowa Comments”) (“In short, transmission owners are focusing on these local projects
because there are few, if any, institutional checks on project selection, timing, or cost.”). See also Comments of
Transmission Access Policy Study Grp., FERC Docket No. RM21-17-000, 19 (Oct. 12, 2021) (“TAPS Comments”);
Comments of the Institute for Policy Integrity at N.Y. Univ. School of Law, FERC Docket No. RM21-17-000, 16
(Oct. 12, 2021) (“NYU Policy Integrity Comments”); Union of Concerned Scientists, FERC Docket No. RM21-17-
000, 24-25 (Oct. 12, 2021).

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processes have significantly reduced the costs of regional transmission development when they
have been implemented.
The purpose of the present NOPR is to offer proposals to unblock the regional and
interregional transmission logjam. Increasing transmission investment can lead to more
competition in the wholesale energy and capacity markets by reducing congestion and allowing
lower-cost generation to be interconnected and dispatched.23 We applaud FERC for recognizing
the problem and issuing the Advanced Notice of Proposed Rulemaking (“ANOPR”)24 and the
NOPR to consider solutions. In the NOPR, FERC proposes to unblock the regional and
interregional transmission logjam by changing the financial incentive for incumbent utilities to
pursue regional and interregional projects. One such change would give incumbents that
establish a “joint ownership structure” with a partner that has “a meaningful level of participation
and investment” a monopoly ROFR to design and construct certain proposed facilities. FERC
refers to this proposed right of first refusal as a “conditional” right of first refusal.25
The proposed ROFR threatens to displace competition where it exists today for transmission
design and construction for new projects selected in a regional transmission plan. Broadly
speaking, transmission development falls into two categories —transmission planning and
transmission design and construction. In this comment, the Agencies use the term “transmission
23 See E LECTRIC E NERGY M ARKET COMPETITION T ASK FORCE , Report to Congress on Competition in Wholesale and
Retail Markets for Electric Energy, at PP 5, 37, 72, and 81 (2007), https://www.energy.gov/oe/downloads/report-
congress-competition-wholesale-and-retail-markets-electric-energy.
24 Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator
Interconnection, 176 FERC ¶ 61,024, P 28 (July 15, 2021).
25 FERC proposes to allow ROFRs in FERC jurisdictional tariffs. See NOPR. The extent to which transmission
owners and/or RTOs will actually adopt tariffs with ROFRs remains to be seen. See also id., P 355 (public utility
transmission providers are not obligated to adopt the federal ROFR and have an opportunity to “consider whether
this type of a conditional federal right of first refusal, if adopted, would help improve their particular regional
transmission planning process or help address potentially misaligned incentives regarding regional and local
transmission facility investment”).

9
planning” to refer to determining where the electrical grid needs more capacity as well as how
much capacity is needed. The Agencies use “transmission design and construction” to refer to
developing particular solutions to install transmission capacity to meet the identified need, which
may include variation in the proposed routes and/or voltages of proposals for particular
solutions.26
Previous experience has demonstrated that allocating the design and construction of regional
transmission facilities to developers through competitive processes can significantly reduce costs
and drive innovation. The Agencies therefore encourage FERC to reconsider its current proposal
to use a ROFR, conditional or otherwise, to attempt to resolve the regional and interregional
transmission challenge.
As the Commission noted when it removed the ROFR from federal tariffs, “granting
incumbent transmission providers a federal right of first refusal … effectively restricts the
universe of transmission developers offering potential solutions for consideration in the regional
transmission planning process.”27 The Commission correctly recognized that this “may result in
the failure to consider more efficient or cost-effective solutions to regional needs and, in turn, the
26 Competition for transmission design can vary by RTO. Under PJM’s “sponsorship” model, PJM puts both the
transmission design and construction cost out to bid for system constraints it has identified. Transmission
developers propose competing designs, along with their costs, to solve the constraints. FERC, Competitive
Transmission Development Technical Conference, Panel 1: Cost Containment Provisions in Competitive
Transmission Development Processes; Panel 2: Commission Consideration of Rates That Contain Cost
Containment Provisions and Result from Competitive Transmission Development Processes 4 (June 22, 2016)
(testimony of Craig Glazer, VP of Fed. Gov’t Policy, PJM Interconnection),
https://www.ferc.gov/sites/default/files/2020-08/Glazer-PJM.pdf. In other regions, such as CAISO, the RTO
identifies the solution and only formally puts the construction out for competitive bid. Comments of the Cal. Indep.
Sys. Operator Corp. on Advance Notice of Proposed Rulemaking, FERC Docket No. RM21-17-000 (Oct. 12, 2021)
(noting that CAISO conducts a competitive solicitation for the regional transmission solution). In those regions,
there may be informal design competition as transmission developers propose solutions to the RTO before the RTO
decides on a solution to put out for bid. See, e.g., id. at 15 (noting that CAISO works with stakeholders to identify
the solutions for any identified transmission need).
27 Transmission Planning and Cost Allocation by Transmission Owing and Operating Public Utilities, Order No.
1000, 136 FERC ¶ 61,051, P 284 (2011).

10
inclusion of higher-cost solutions in the regional transmission plan.”28 The Commission
recognized that it was compelled to take action in light of its finding that “federal rights of first
refusal in favor of incumbent transmission providers deprive customers of the benefits of
competition in transmission development, and associated potential saving.…”29 Regional
transmission investment has not occurred to the degree FERC envisioned when it issued Order
No. 1000 and eliminated the ROFR for certain projects, but that does not mean that competition
has not been and cannot be successful in ensuring just and reasonable rates. As FERC
recognizes, a number of factors contribute to the lack of regional investment, and abandoning the
benefits of competition is not necessary to address the issue.
Reforms that will encourage new regional transmission development can take place without
abandoning competition. FERC’s proposals around transmission planning and cost allocation
may go a long way toward addressing the logjam that FERC has identified, and those reforms
can go further if FERC addresses the anticompetitive incentive and ability for incumbent
transmission owners to influence transmission planning processes to favor transmission projects
over which they can maintain their monopolies. We urge FERC to focus on these initiatives,
including potential reforms suggested by a range of ANOPR commenters to address the adverse
effects of ROFRs for local and exempt projects,30 before concluding that the absence of a ROFR
is the cause of the current industry problems, or that the adoption of a ROFR is the cure.
FERC’s proposal arises as our nation continues to prioritize competitive energy markets and
pursues a major “grid modernization” effort to deliver reliable energy to businesses and
28 Id.
29 Id. P 285.
30 See Part III, infra, at pages 20-21.

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consumers.31 Enabling competition in transmission development, where viable, is the best way
to achieve these goals. We urge FERC to examine the competitive impacts that the proposed
ROFR is likely to have, including increasing entry barriers that may result in higher prices for
transmission and electricity, reducing innovation, and a less efficient, less reliable, and less
resilient grid. Moreover, the proposed ROFR may not only yield sub-optimal transmission
development in the short run, but could also serve to further entrench incumbents over the long
run.
Regulatory barriers to entry can prevent consumers from realizing the full benefits of
competition. The Agencies urge FERC to avoid restrictions on competition unless they are
necessary and narrowly tailored to achieve FERC’s stated mission to “[a]ssist consumers in
obtaining reliable, safe, secure, and economically efficient energy services at a reasonable
cost.”32 We have not seen such a need here and believe it would be premature to abandon
competition before seeing the effects of FERC’s other proposals.
II. 	ROFRS INCREASE BARRIERS TO ENTRY AND DISTORT THE
COMPETITIVE PROCESS
By its nature, a ROFR, conditional or otherwise, limits who can build transmission projects
and is thus a regulatory barrier to entry. Although at this time competition may not be feasible in
transmission planning due to the unique characteristics of the industry, recent experience in some
RTOs underscores that competition in the design and construction of specific projects can work
and benefits consumers.
31 Exec. Order No. 14,057, 86 Fed. Reg. 70,935 (2021); Exec. Order No. 14,036, 86 Fed. Reg. 36,987 (2021).
32 Overview, FED. E NERGY REGUL. COMM ’N, https://www.ferc.gov/what-
ferc#:~:text=FERC's%20Mission%3A%20Assist%20consumers%20in,market%20means%2C%20and%20collabora
tive%20efforts (last visited July 31, 2022).

12
As part of the transmission development process, the Agencies recognize that there is an
important role for integrated regional and national planning by entities with grid-wide
perspectives. Local, regional, and interregional transmission networks are physical networks,
like interstate highways and interstate gas pipelines, that gain value through the efficiency of
their interconnections. Consequently, transmission developers acting independently and
approaching their work from a local perspective cannot be expected to plan efficiently integrated
regional or interregional transmission networks.33 Moreover, “as the Commission has long
recognized, ‘vertically-integrated utilities do not have an incentive to expand the grid to
accommodate new entries or to facilitate the dispatch of more efficient competitors.’”34
Instead, RTOs can more efficiently plan the transmission system than developers acting
independently. For example, the Midwest Independent System Operator (“MISO”) annually
develops the MISO Transmission Expansion Plan (“MTEP”). As part of the MTEP process,
“MISO evaluates various types of projects … that, when taken together, build an electric
infrastructure to meet local and regional reliability standards.”35 The PJM Interconnection
(“PJM”) undertakes similar planning as part of its Regional Transmission Expansion Plan
(“RTEP”) process.36
33 See, e.g., James Bushnell & Steven Stoft, Improving Private Incentives for Electric Grid Investment, D EP’T O F
E CON, I OWA S T. U NIV. 5-6 (1997) (noting that “[t]he interconnected nature of electricity networks has necessitated a
great deal of coordination and negotiation between neighboring utilities” and that “when many of these parties are
driven by an undiluted profit motive, this approach of voluntary coordination of transmission will break down.”).
34 NOPR, P 32 (quoting Preventing Undue Discrimination and Preference in Transmission Service, Order No. 890,
118 FERC ¶ 61,119, P 57 (2007) (acknowledging incentive of incumbent transmission providers to discriminate in
favor of their own generation)).
35 M IDCONTINENT I NDEPENDENT SYSTEM O PERATOR , MISO Transmission Expansion Plan,
https://www.misoenergy.org/planning/planning/ (last visited July 27, 2022).
36 PJM I NTERCONNECTION, L.L.C., Manual 14F: Competitive Planning Process (rev.09, 2022),
https://www.pjm.com/-/media/documents/manuals/m14f.ashx.

13
A. Competition Benefits Consumers by Lowering Costs and Increasing Innovation
In contrast to the need for integrated transmission planning, the design and construction of
specific transmission projects clearly benefits from competition. Competition for the
construction of transmission facilities creates incentives for rival transmission developers to
minimize costs—incentives that are not present when construction rights are exclusive.
Similarly, competition in transmission design can reduce final costs to consumers by
encouraging firms to propose creative solutions to meet identified transmission needs more
efficiently.
Previous experience with competitive processes confirms these outcomes. When competitive
processes have been implemented, a significant number of incumbent and nonincumbent
competitors have participated, and nonincumbents have often won. Even when the incumbent
wins, consumers also win, because incumbents tend to make more competitive proposals when
they face competition. Electricity customers have also been able to benefit from competition
leading to innovative designs and financial terms, such as cost containment mechanisms. To
illustrate, there are many instances in which the competitive process benefitted consumers,
including the following:
• 	PJM’s Artificial Island Project: PJM initiated this project to improve performance of
the bulk electric system in the Artificial Island area in Southern New Jersey, which is
the site of three nuclear reactors.37 In 2013, PJM received 26 proposals from seven
37 PJM I NTERCONNECTION, L.L.C., Artificial Island Project Recommendation White Paper (July 29, 2015),
https://www.pjm.com/~/media/committees-groups/committees/teac/postings/artificial-island-project-
recommendation.ashx. Although PJM sought solutions for Artificial Island before the implementation of its Order
No. 1000 competitive solicitation tariff, “PJM utilized those procedures to the extent feasible as a trial run of Order
1000 tariff provisions.” Id., § 1.

14
sponsors reflecting a diverse range of technologies, including new overhead and
underground/underwater 230 kV lines, overhead 500 kV lines, and HVDC lines.38
Original cost estimates ranged from $100 million to $1.55 billion.39 During the
process, LS Power submitted a cost commitment of $146 million for its portion of the
project.40 In response to this proposal, PJM allowed three of the other bidders to
supplement their proposals.41 Three of the four finalists submitted proposals
containing a cost commitment or cost containment proposal.42 In 2015, LS Power
was awarded the project, which was then expanded in 2017 to include additional
work performed by the incumbents to address permitting issues and technical
challenges identified after the initial award.43 Including the incumbents’ portion of
the work on their transmission facilities, the total cost is estimated at $280 million.44
PSE&G, the incumbent transmission owner, submitted fourteen proposals ranging in
cost from $692 million to $1.173 billion, 45 meaning PSE&G’s lowest-cost proposal
was more than twice as expensive as the estimated total cost of the project.
• 	NYISO’s Western New York Public Policy Transmission Project: In November 2015,
the New York Independent System Operator (“NYISO”) sought proposals to relieve
transmission congestion in Western New York, including access to renewable energy
38 Id. tbl.2.1, at 12-13.
39 Id.
40 Id., § 5.
41 Id.
42 Id.
43 PJM I NTERCONNECTION, L.L.C., Transmission Expansion Advisory Committee (TEAC) Artificial Island
Recommendations to the PJM Board 5-7 (Apr. 5, 2017), https://www.pjm.com/-/media/committees-
groups/committees/teac/20170413/20170413-artificial-island-teac-board-whitepaper.ashx.
44 Id. at 7; Johnson, Tom, Plan for high voltage power line between Del. and N.J. moving ahead, W HYY (Apr. 7,
2017), https://whyy.org/articles/pjms-high-voltage-plan-to-enhance-power-grid-back-on-track/.
45 PJM I NTERCONNECTION, L.L.C., Artificial Island Project Recommendation White Paper, tbl.2.1 at 12-13 (July 29,
2015), https://www.pjm.com/~/media/committees-groups/committees/teac/postings/artificial-island-project-
recommendation.ashx.

15
from the Niagara hydroelectric facility and imports of renewables from Ontario.46
NYISO received twelve proposals from seven transmission developers.47 NYISO
determined that ten proposals were viable and sufficient and ranked those proposals.48
In October 2017, the NYISO Board selected one of NextEra’s Energy Transmission’s
proposed projects as the winner, noting that it was “both the more efficient and more
cost-effective transmission solution” to address the identified need.49 That NextEra
project cost $181 million, while the lowest-cost proposal from an incumbent—a joint
proposal from the New York Power Authority and New York State Electric & Gas
Corporation—was $222 million.50 NextEra’s project represents a 22 percent savings
over the incumbent’s proposal.
• 	CAISO Round Mountain 500 kV Area Dynamic Reactive Support Project: The
California Independent System Operator (“CAISO”) identified a reliability-driven
need for this project in its 2018-19 transmission planning process.51 In 2019, CAISO
conducted a competitive solicitation for proposals for two alternative configurations
of the project.52 Six developers submitted a total of fourteen proposals, twelve of
which were qualified under CAISO’s tariff.53 In February 2020, CAISO selected LS
Power Grid California, LLC to finance, construct, own, operate, and maintain the
46 N EW Y ORK I NDEPENDENT S YSTEM O PERATOR , I NC ., Western New York Public Policy Transmission Planning
Report at 3, 15 (Oct. 17, 2017), https://www.nyiso.com/documents/20142/2892590/Western-New-York-Public-
Policy-Transmission-Planning-Report.pdf/d3f62964-2e2d-588c-2da4-9aa33bb5470b?t=1541702788476.
47 Id. at 4.
48 Id. at 4, 21.
49 Id. at 4.
50 Id. at 78, tbl.4.1 at 74.
51 C ALIFORNIA ISO, Round Mountain 500 kV Area Dynamic Reactive Support Project, Project Sponsor Selection
Report, §§ 1, 2.1 (Feb. 28, 2020),
http://www.caiso.com/Documents/RoundMountain500kVAreaDynamicReactiveSupportProject-
ProjectSponsorSelectionReport.pdf.
52 Id., § 2.1
53 Id., § 1, 2.1.

16
project.54 In discussing the selection factors, after noting there were no material
differences or only slight differences among the proposals with regard to many of the
selection factors, CAISO highlighted the cost containment factor, which did have
material differences.55 CAISO noted that LS Power “proposed the strongest binding
cost containment commitment proposal.”56 CAISO further noted that LS Power
“proposed more robust capital or construction cost, return on equity, and equity
percentage caps that should result in lower costs and present less risk compared to the
proposals of the other five project sponsors … thus benefitting ratepayers.”57 CAISO
also noted LS Power’s 15-year annual revenue requirement cap and lower
interconnection costs as advantages of LS Power’s proposal.58
FERC’s proposed conditional ROFR could have the effect of eliminating similarly
competitive bids in the future. Indeed, courts have recognized the anticompetitive effects of
ROFRs. S.C. Pub. Serv. Auth. v. FERC, 762 F.3d 41, 74 (D.C. Cir. 2014) (“rights of first refusal
are likely to have a direct effect on the costs of transmission facilities because they erect a barrier
to entry”); MISO Transmission Owners v. FERC, 819 F.3d 329, 333 (7th Cir. 2016) (ROFRs
“create[] a potential for higher rates to consumers of electricity than if competition to create
transmission facilities in transmission companies’ service areas was allowed”). And these
critiques of unconditional ROFRs also apply to the proposed conditional ROFR.
54 Id., § 1.
55 Id., § 3.19.1.
56 Id.
57 Id.
58 Id., § 3.21.

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B. A ROFR Conditioned on Joint Ownership Is Not Competition
A ROFR conditioned on joint ownership does not result in multiple bidders, so it is not a
competitive process and does not offer the same benefits as competition. While joint ownership
proposals can be procompetitive if they are part of a competitive process, they cease to be so if
tied to a ROFR, which eliminates competition.
The DOJ/FTC Antitrust Guidelines for Collaborations Among Competitors recognize that an
economically integrated joint venture between competitors can eliminate competition, yet also
yield procompetitive benefits.59 When analyzing such collaborations, the Agencies consider the
extent of the joint venture’s anticompetitive effects and procompetitive benefits. Even if a
venture yields some procompetitive benefits, it would be considered anticompetitive overall if
those benefits can be achieved through less restrictive means or are outweighed by the
anticompetitive effects.60 Often, the impetus for a joint venture’s formation relates to
competition—i.e., companies join forces in order to better compete against other firms. In these
instances, the joint venture participants seek out partners who can offer them the most value, e.g.,
by bringing together complementary capabilities and expertise.61
Here, the conditional ROFR does not create this type of incentive to seek out the best partner
in order to compete, because the joint venture will not be facing pressure to compete. That is,
the mere existence of a joint venture partner does not bring competition to a project, nor does it
59 FED. T RADE COMM ’N & D EP’ T OF J USTICE , Antitrust Guidelines for Collaborations Among Competitors, §§ 2.1,
2.2 (Apr. 2000), https://www.justice.gov/atr/page/file/1098461/download.
60 Id., §§ 2, 3.2 (discussing when an agreement is reasonably related and reasonably necessary).
61 See, e.g., id., § 3.2 (“Participants in an efficiency-enhancing integration typically combine, by contract or
otherwise, significant capital, technology, or other complementary assets to achieve the procompetitive benefits that
the participants could not achieve separately.”); id., § 3.36 (“Efficiencies generated through a competitor
collaboration can enhance the ability and incentive of the collaboration and its participants to compete, which may
result in lower prices, improved quality, enhanced service, or new products.”).

18
necessarily result in the best partner for a project in terms of skill, cost, or innovation. Instead,
the conditional ROFR supplants competition, and a conditional ROFR as proposed by FERC will
result in a joint venture that faces no competition.
In a competitive process, on the other hand, an incumbent utility will have an incentive to
find an efficient partner when doing so would help the partnership win the project. As the NOPR
details, transmission joint ventures have the potential to yield significant benefits, including cost
savings, design expertise, and reduced financial risks.62 To the extent that a joint venture could
bring these benefits to a project, competition will provide incentives to incumbent transmission
owners to form joint ventures to achieve these benefits regardless of whether a conditional
ROFR policy is advanced. It is far better to rely on competition, rather than the promise of a
share of monopoly profits, to provide such incentives. Moreover, the ROFR encourages the
formation of a partnership when it may or may not be efficient and raises the risk that parties will
act collusively, especially where two incumbent transmission owners form a joint venture that
protects each other’s territories from competition. To the extent that FERC seeks to encourage
efficient joint ventures, FERC should do this in ways consistent with competition.63
62 NOPR, PP 372-76.
63 Some ANOPR commenters representing municipals and cooperatives have called for consideration of joint
ownership as part of transmission planning selection processes. See, e.g., Initial Comments of Mass. Mun.
Wholesale Electric Co., N.H. Elec. Coop., Inc., Conn. Mun. Elec. Energy Coop., and Vt. Pub. Power Supply Auth.,
FERC Docket No. RM21-17-000, 30-31 (Oct. 12, 2021) (“Public Systems Comments”) (“Public Systems urge that
the Commission direct ISOs and RTOs to prioritize joint ownership projects when selecting the winners of
competitive transmission solicitations.”); Initial Comments of the Am. Pub. Power Ass’n on Advance Notice Of
Proposed Rulemaking, FERC Docket No. RM21-17-000, 28 (Oct. 12, 2021) (“APPA urges the Commission also to
promote joint ownership through the transmission planning process by[,] for[] example, specifying that joint
ownership of transmission facilities is a positive factor in evaluating transmission solutions in regional transmission
planning processes.”); see also TAPS Comments at 55-56 (“…competitive processes have significantly reduced
costs in the relatively few instances in which they have been used. While state ROFRs limit where such competition
can be effective, the Commission should not abandon this important tool to minimize costs to consumers. Rather, it
should foster this process in a manner that advances the role of inclusive joint ownership.”). These commenters did
not tie joint transmission ownership to a conditional ROFR.

19
III. 	TO SOLVE THE PROBLEMS FERC HAS IDENTIFIED, THE AGENCIES
ENCOURAGE FERC TO EXAMINE ALTERNATIVES CONSISTENT WITH
COMPETITION PRINCIPLES
As discussed supra (section I), there are many obstacles to regional transmission
development. The Agencies support FERC’s implementation of solutions consistent with
competition principles that address these obstacles, such as by improving transmission planning
and cost allocation. Without assessing the merits of any particular proposal, the Agencies note
that FERC has proposed several such mechanisms in its NOPR:
• 	Requiring that public utility transmission providers “conduct regional transmission
planning on a sufficiently long-term, forward-looking basis to identify and plan for
transmission needs driven by changes in the resource mix and demand.”64
• 	Requiring that public utility transmission providers involve state regulators in
determining cost allocation methods and establish a time period for states to negotiate
alternative cost allocation methods.65
• 	Requiring public utility transmission providers to improve transparency of local
transmission planning criteria, models, and assumptions, as well as identified
transmission needs and the potential local or regional transmission facilities they will
evaluate to address those needs.66
• 	Requiring neighboring public utility transmission providers to revise their
interregional coordination procedures to improve sharing of information regarding
transmission needs identified in their respective Long-Term Regional Transmission
64 NOPR, P 56.
65 Id., P 278-79.
66 Id., P 400. FERC also proposes requiring public utility transmission providers to evaluate whether certain
transmission facilities due to be replaced within 10 years “can be ‘right-sized’ to more efficiently or cost-effectively
address regional transmission needs identified in Long-Term Regional Transmission Planning.” Id., P 403.

20
Planning processes and to identify and jointly evaluate interregional facilities that
may address these needs more efficiently or cost-effectively.67
By strengthening regional transmission planning processes, improving transparency, and
clarifying cost allocation, these policies may enable more frequent realization of the benefits of
competition in transmission design and construction. For example, if transmission planners are
required to consider longer time horizons, fewer regional projects will be exempted from
competitive processes on the basis of immediate need. FERC’s proposed reforms to increase
transparency may also mitigate overinvestment in local projects that are not subject to
competition. FERC notes that its proposal to increase transparency into local transmission
planning processes “will better facilitate the identification of regional transmission facilities that
may be more efficient or cost-effective than proposed local transmission facilities through the
regional planning process.”68
In addition to these proposed reforms, we encourage FERC to consider additional solutions
that have been proposed by interested stakeholders in their ANOPR comments. Many
stakeholders have proposed solutions that specifically address the potential issue of incumbent
utilities facing a “perverse investment incentive” to overdevelop local facilities to avoid Order
No. 1000 competitive processes for regional projects.69 Without assessing the merits of any
particular proposal, we note the following examples:
67 Id., P 427. FERC also proposes requiring public utility transmission providers to allow entities to propose
interregional transmission facilities as potential solutions to regional needs identified in Long-Term Regional
Transmission Planning. Id., P 428.
68 Id., P 402.
69 Id., P 350.

21
• 	Eliminating exceptions to Order No. 1000 that enable incumbents to circumvent
competitive processes.70
• 	Expanding the set of transmission projects that are subject to competitive processes.71
• 	Subjecting local and/or noncompetitive transmission investments to increased
scrutiny.72
• 	Creating an Independent Transmission Monitor (or regional Monitors) to limit the
influence of incumbent utilities over the planning process.73
• 	Applying a standardized cost-benefit analysis to all transmission projects, including
local projects.74
70 Initial Comments of the Cal. Pub. Utilities Comm’n, FERC Docket No. RM21-17-000, 40, 49 (Oct. 12, 2021)
(“CA PUC Comments”); Public Systems Comments at 28; Advanced Energy Econ. Comments at 44; Comments of
the R Street Inst., FERC Docket No. RM21-17-000, 8 (Oct. 12, 2021); Comments of Potomac Economics, Ltd.,
FERC Docket No. RM21-17-000, 7-8 (Oct. 12, 2021); Comments of LS Power Grid, LLC in Response to the
Commission’s Advanced Notice of Proposed Rulemaking, FERC Docket No. RM21-17-000, 133-134 (Oct. 12,
2021) (“LS Power Comments”); Comment of the Harvard Elec. Law Initiative, FERC Docket No. RM21-17-000,
24-25 (Oct. 12, 2021) (“Harvard Elec. Law Initiative Comments”); Comments for Protecting Consumers from
Socialized Transmission Charges that do not Benefit them, from Subsidizing Network Upgrades Needed for
Generation Interconnections, and from Paying for Potential Unneeded and Costly Supplemental Transmission
Projects by Office of the Ohio Consumers’ Counsel, FERC Docket No. RM21-17-000, 5-6 (Oct. 12, 2021) (“Ohio
Consumers’ Counsel Comments”).
71 Comments of the N.J. Board of Pub. Utilities, FERC Docket No. RM21-17-000, 11-13 (Oct. 12, 2021); CA PUC
Comments at 39-40; Public Systems Comments at 8, 30; Resale Power Group of Iowa Comments at 9, 11. Some
commenters have suggested using a specific voltage threshold. See, e.g., LS Power Comments at 50, 85; Comments
of the Electricity Transmission Competition Coalition, FERC Docket No. RM21-17-000, 16-19 (Oct. 12, 2021)
(“ETCC Comments”).
72 DOE Comments at 42-43; CA PUC Comments at 47-48; Comments of Pub. Int. Orgs., FERC Docket No. RM21-
17-000, 61-62, 77-79 (Oct. 12, 2021) (“Joint NGO Comments”); Harvard Elec. Law Initiative Comments at 44-57;
Resale Power Comments at 9, 11; Ohio Consumers’ Counsel Comments at 5-6, 15; NYU Policy Integrity
Comments at 20.
73 CA PUC Comments at 52-65; ETCC Comments at 26; Comments of the Office of the People’s Counsel for the
District of Columbia on the Advanced Notice of Proposed Rulemaking, FERC Docket No. RM21-17-000, 12-16
(Oct. 12, 2021); Comments of the Office of the State Agencies at 33-37, FERC Docket No. RM21-17-000, 33-37
(Oct. 12, 2021).
74 NYU Policy Integrity Comments at 41-49; Joint NGO Comments at 120-124. See also DOE Comments at 12-15
(“FERC should support the development of a common modeling framework to maintain consistency and
comparability in regional transmission planning and cost allocation processes … Standardizing input assumptions
can increase consistency and comparability across planning processes.”).

22
To the extent that Order No. 1000 may have inadvertently caused incumbent utilities to
overinvest in local facilities, we urge FERC to pursue solutions that would bring investments in
local and in regional transmission facilities back into alignment by reducing incumbents’
opportunities and incentives to avoid competitive processes.
IV. 	CONCLUSION
For the reasons above, the Agencies encourage FERC to pursue the alternative proposals to
solve the problems FERC has identified before adopting an inefficient, noncompetitive system
that relies on any type of ROFR. In particular, FERC should adopt reforms that will improve
regional transmission planning and cost allocation processes without harming competition, as
well as reforms that will strengthen and expand the implementation of existing competitive
processes for transmission design and construction. Rather than attempting to encourage long-
distance transmission development by granting market participants exclusive design and
construction rights for regional and interregional transmission networks, the Agencies encourage
FERC to employ better, procompetitive options. A ROFR conditioned on formation of a joint
venture will eliminate or distort the benefits of competition. Adopting reforms that promote
competition where possible will make transmission development less costly, more resilient, and
more innovative for the American consumer than it otherwise would be. Further, failure to do so
would be counter to the Executive Order’s call to FERC to avoid exercising its regulatory
authority in a way that creates unnecessary barriers to competition.