LS Power Petitions Supreme Court to Overturn Anti-competition Electric Transmission Laws That Hurt Consumers
LS Power today announced that it has initiated new legal actions as part of its ongoing push to enable consumers to benefit from competition in the electric transmission sector.
In the first action, LS Power has asked the U.S. Supreme Court to strike down a Minnesota law as unconstitutional, arguing that it protects in-state transmission owners from competition for the development and construction of certain electric transmission projects.
The “Minnesota law grants a right of first refusal over certain [federally regulated and federally planned] new electric transmission projects to entities that already own transmission facilities in the state, which is a clear violation of interstate commerce protections,” LS Power states in the court filing. “States may not erect discriminatory barriers to competition for interstate markets, and the interstate electric transmission grid is by definition an interstate market.”
In the second action, LS Power asked the Iowa District Court of Polk County to strike down another recently passed law giving a right of first refusal (ROFR) to incumbent transmission owners. In violation of the Iowa state constitution, the ROFR language was slipped into the state’s omnibus budget bill inappropriately.
“The United States is at an energy crossroads, confronting an aging electric transmission system in the midst of an important conversation around the clean energy transition and the billions of dollars of new transmission infrastructure needed to achieve renewable energy and climate goals,” said LS Power CEO Paul Segal. “Upholding existing rules that require competition for new transmission projects is essential to ensuring only the most innovative and cost-effective projects are built. LS Power will continue to advocate for competition to help reduce costs for electricity customers. They deserve nothing less.”
The U.S. has embarked on a massive expansion of clean energy that will require billions of dollars of investment in new interstate transmission lines to facilitate these new energy sources.
The Federal Energy Regulatory Commission (FERC) has determined and practice has shown that when transmission projects are subject to robust competition, consumers benefit. Existing transmission owners have cynically fought efforts to upend their monopoly on transmission development, attempting to pass state laws to prohibit competition in their service territories, while citizens of their home states and neighboring states bear the higher costs that result when there is no competition. It is estimated that the MISO and SPP footprints may require more than $30 billion in grid expansion over the next 10 years, some of which will be in the states of Minnesota and Iowa, making LS Power’s court challenges timely and consequential.
LS Power’s Supreme Court petition is available here. The Iowa filing is available here.
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About LS Power Transmission Development
LS Power owns more than 660 miles of electric transmission lines in five states and is in the process of developing transmission projects in several additional states across the country. Since Order No. 1000 and the development of competitive processes to build regional transmission lines, LS Power has been a highly successful competitor, in part because of its ability to offer cost-effective and innovative solutions and its willingness to shoulder the risk of cost overruns traditionally borne by consumers. To date, LS Power has been selected to build transmission projects by four out of the six RTOs across the U.S. based on its more efficient or cost-effective proposals.