A coalition of nine utilities in the Midwest and Great Plains wants federal energy regulators to suspend a long-standing policy requiring competitive bidding for billions of dollars in new high-voltage power lines. It’s a change the companies claim is key to helping the U.S. win the artificial intelligence race, but one that critics warn would stifle competition.
The group, whose members include Xcel Energy, Entergy and seven other utilities, filed a complaint Tuesday with the Federal Energy Regulatory Commission that seeks to temporarily eliminate the competitive solicitation provision in FERC’s landmark Order 1000, which broadly reformed electric transmission planning and cost allocation.
POLITICO’s E&E News previously reported the companies were preparing a complaint.
The push leans into the Trump administration’s Speed to Power initiative, which aims to give the U.S. an edge over China in developing AI by enabling a rapid build-out of the grid to enable data center development. Requiring competitive bidding for transmission projects, the utilities argue, adds at least 16 to 20 months to the development timeline — delays that cost consumers and the nation’s economy.
“There are demands that are unprecedented, that are well-documented, that are on all of our systems, and we have an obligation to serve,” said Davis Strobridge, director of regulatory strategy at ITC, a Michigan-based transmission-only utility that operates across the Midwest and Great Plains. “And the competitive process is interrupting that obligation.”
That viewpoint was echoed by Dean Ball, a senior fellow at the Foundation for American Innovation, a conservative think tank. Ball previously worked in the Trump White House where he led the drafting of the administration’s AI Action Plan.
In testimony to FERC on the utilities’ behalf, Ball said delays in building transmission “does not merely shift the timeline; it fundamentally degrades U.S. competitiveness during the period most likely to prove decisive” to the AI race.
Specifically, the complaint asks FERC to suspend competitive bidding across 18 states covered by two regional grid operators, the Midcontinent Independent System Operator (MISO) and Southwest Power Pool (SPP). Under the proposed remedy, bidding for projects would be paused for five years or bypassed for power lines that are needed to quickly bring online new power plants or large energy users, such as data centers.
Opponents painted the complaint as a power play meant to undercut competition.
The Electricity Transmission Competition Coalition — which includes dozens of large energy users, consumer advocates and independent developers — said the utilities’ request could further increase rising electricity prices.
“This is a desperate attempt to subvert competition in the name of speed to power,” said Paul Cicio, the group’s executive director.
Jeff Dennis, executive director of the Electricity Consumer Alliance, challenged the utilities’ claim that eliminating competition would accelerate grid development.
“Speed to power requires a lot of investment, and that means we need more investors, not less,” he said. “I think the administration’s actions have really borne that out.”
Dennis, a former FERC staffer who was there when Order 1000 was approved, also questioned the utilities’ argument that eliminating competition would speed development and produce savings for consumers.
The complaint “cherry picks one particular part of the process that the utilities don’t like — a process, by the way, that faces systemic delays all along the chain, from supply chains to siting and permitting,” he said. They’ve “asked FERC to undo that one thing without considering the full scope of impacts that could have on the ultimate customer paying the bill.”
The issue has played out almost exclusively in the Midwest and Great Plains where MISO and SPP have approved $45 billion in new regional transmission lines and are poised to consider billions of dollars more.
Other members of the coalition include some of the largest monopoly utilities MISO and SPP: Ameren, ATC, Cleco Power, Evergy, Oklahoma Gas & Electric and Empire District Electric — all companies with operations concentrated in the nation’s midsection.
If FERC approved the complaint, it would have the practical effect of extending the scope of the utilities’ monopolies and handing them billions of dollars in new transmission projects — as well as hundreds of millions of dollars in profits — without forcing them to compete for projects as they do today.
Tom Content, executive director of the Citizens Utility Board of Wisconsin, a nonprofit ratepayer advocate, said doing so would benefit no one except utility shareholders.
“The monopoly utility companies stand to reap double digit profits from building massive projects to serve data centers, and the system today actually rewards them if they overbuild and overspend on projects,” he said.
Competitive bidding for certain high-voltage power lines — new lines approved by regional grid operators — has been required since 2011 when FERC eliminated utilities’ so-called right-of-first-refusal over the projects.
Doing so, FERC reasoned, would lead to better-designed, cheaper projects by forcing utilities and independent developers to compete.
FERC left it to states to enact their own right-of-first-refusal laws, which some did, including the Dakotas, Minnesota and Michigan.
But political momentum has shifted in recent years. Utility lobbying efforts have failed in GOP-led states such as Wisconsin, Iowa and Missouri. Illinois Gov. JB Pritzker (D) vetoed a bill in his state. And Montana lawmakers last year became the first in the country to repeal a right-of-first-refusal law.
Utilities have lost out in the courts, too. Iowa’s Supreme Court overturned a law there, and Texas’ right-of-first-refusal law was reversed by a federal court.
Trump’s Department of Justice has sided with consumer advocates in the states and in court.
Last year, DOJ cautioned Iowa against passing right-of-first-refusal legislation, saying it was “concerned that these restrictions would foreclose competition to develop and build electric transmission and thereby potentially raise prices and lower the quality of service for electricity consumers.”
The department also weighed in on a federal lawsuit challenging Texas’ right-of-first-refusal law during Trump’s first term.
Strobridge, the ITC executive, pushed back against opponents who said the utilities are pursuing a FERC complaint because they’ve struck out in the states and in the courts.
He said the country — and specifically in the regions covered by MISO and SPP — are at an inflection point for how they meet surging electricity demand growth.
“We’re looking for leadership and some courageous policy making,” Strobridge said. “We don’t have the luxury to experiment with these policies any more in our region.”