California's ambitious climate goals – which require delivering an unprecedented amount of new utility-scale solar, wind, geothermal, and other clean energy – depend on how quickly the state can develop new transmission to connect these resources to the grid. A critical challenge is that it currently takes about 10 years to develop new transmission in California, with some projects taking up to 14 years. If the state cannot drastically reduce these lead times, it's almost certain we will fall short of our climate goals.
In a new study, Net-Zero California in partnership with economics consultants DHInfrastructure and EE-Analysis estimate the potential ratepayer impacts of delayed transmission development in California. The study shows how long lead times drive higher project costs – adding hundreds of millions each year to electricity rates and tens of billions over the life of projects. The main policy implication is that reforms to reduce lead times – whether it be incentives to fast-track developer planning, funding for staff permitting positions at state agencies, shot clocks on agency permitting review timelines, or strategies to address procurement bottlenecks – are energy affordability policies.
This policy brief summarizes the study’s main results before identifying potential policy opportunities. This research is part of Net-Zero California’s ongoing efforts to address structural drivers of high electricity rates in California, with other key solutions including public financing of transmission, new strategies to increase wildfire mitigation funding, and a new tariff structure to prevent cost-shifts from data centers. A forthcoming study will examine how financial incentives shape investor-owned utility investment decisions, including the relative attractiveness of different asset classes (e.g., overhead vs. underground power lines) and the potential implications for regulatory reform.
For more information, please contact Sam Uden (sam@netzerocalifornia.org).
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T-minus 19-years to deliver a Net-Zero California
