Understanding Rising Transmission Costs in the District of Columbia: An Overview of Transmission Planning and its Impact on Electricity Customers in DC
On behalf of the District of Columbia (DC) Department of Energy and Environment (DOEE) and Office of the Attorney General, Synapse analyzed PJM transmission planning processes and associated cost allocation frameworks, with a focus on how regional and local transmission investments impact DC ratepayers. We evaluated PJM transmission costs, rate of growth, and implications of proposed and historical transmission investments in PJM, including how costs are allocated across load-serving entities and jurisdictions, and the associated rate impacts for DC customers.
DC customers bear significant costs for regional infrastructure driven by datacenter load growth and reliability needs that are not solely attributable to the region’s demand. Notably, load growth accounts for 77 percent of regional project costs allocated to DC’s transmission zone, the vast majority of which is occurring outside the zone. In addition, generation deactivation and the associated need for reliability-must-run (RMR) arrangements further increased cost for DC customer in the recent years, following the retirement of Brandon Shores and Wagner units. Finally, the increasing prevalence of supplemental transmission projects has raised concerns about transparency, regulatory oversight, and prudency in cost recovery, as these investments represent a growing share of total transmission spending.
We provide a recommendations to strengthen transparency, enhance regulatory oversight, and support more equitable cost allocation methodologies in PJM.