A Smarter Way to Pay: Public Financing for Affordable Transmission Development in New England
New analysis finds public financing could save New England customers billions on grid upgrades
A new study from Acadia Center and Clean Air Task Force (CATF) finds that public financing mechanisms could significantly reduce the cost of building and upgrading transmission infrastructure in New England—delivering $9.5 billion in savings for customers while supporting a reliable and clean electricity system.
“New England transmission rates are the highest in the country, placing a growing burden on customers ,” said Nicole Pavia, Director, Clean Energy Infrastructure Deployment at CATF. “They already account for 30% of wholesale electricity costs, and under the current model, customers can pay more than three times the original cost of a transmission project over its lifetime due to conventional financing structures. At the same time, rising electricity demand and the need for new and upgraded grid infrastructure are driving additional system buildout. Meeting these demands while addressing existing energy affordability challenges will require new and innovative solutions.”
New England will need to scale a broad mix of clean energy resources, grid infrastructure, energy efficiency and demand response, and other technologies to meet climate targets, accommodate rising demand from electrification and new industries, and manage winter peaks projected to double over the next 25 years. At the same time, aging infrastructure and growing electricity demand are increasing pressure to expand and modernize the grid.
The report’s analysis, with contributions from Power Advisory and Professor Joshua Macey of Yale University, finds that the current approach to financing—heavily dependent on private equity and debt—is adding avoidable costs for consumers. Public financing approaches, such as the use of tax-exempt public debt and equity, could reduce costs by up to 43% ($8.4 billion) for new transmission projects and up to 34% ($1.1 billion) for upgrades and asset condition projects over 40 years. These savings could be achieved through multiple implementation pathways, including integrating public financing into ISO New England’s transmission planning and procurement processes, as well as leveraging existing state financing authorities.
“Transmission is essential to delivering affordable, reliable, and clean electricity—but how we finance it matters immensely,” said Jamie Dickerson, Senior Director, Climate and Clean Energy Programs at Acadia Center. “Public financing offers a practical way to lower customer costs while still delivering the grid investments the region needs. With the right tools, states across New England can significantly reduce costs for consumers while accelerating grid modernization and the integration of clean energy resources.”
“Transmission costs ultimately flow through to customers, and the cost of capital is a key driver of what customers pay,” said Joshua Macey, Professor of Law at Yale Law School. “In New England, states have a clear opportunity to act—either by expanding existing public financing entities or creating a dedicated transmission financing authority. With the right statutory authority, strong governance, and structure that align with existing cost-recovery frameworks, these approaches can reduce costs for customers while supporting the buildout of critical grid infrastructure.”
Key findings include:
- Transmission costs in New England are the highest in the country: At $25 per megawatt-hour in 2024, transmission rates account for 30% of wholesale energy costs in the region and are more than double those in NYISO, PJM, MISO, and ERCOT.
- Significant investment is needed: To replace aging infrastructure, $11.9 billion in local transmission upgrades and replacements are already proposed, planned, or under construction. In addition, ISO New England estimates that $16 to $26 billion in regional transmission investment will be needed over the next 25 years to ensure reliability, meet growing demand, and achieve decarbonization goals. Every project that moves forward without public financing in place places an unnecessary and undue burden on customers.
- Public financing can deliver substantial savings: For new transmission, these models could deliver up to $8.4 billion in customer savings over 40 years—a 43% reduction compared to business-as-usual financing. For rebuilds and upgrades of existing lines, public financing could deliver $1.1 billion in savings, or a 34% cost reduction, over the same time frame.
- Multiple flexible pathways to implementation: Building on existing state collaboration, public financing can be pursued through a range of near-, medium-, and long-term pathways.
- Flexibility and replicability: Participating states can return most savings to customers while allocating a portion to priorities such as host community benefits or targeted bill relief.
The report also highlights opportunities for states to use public financing to support broader policy goals, including community benefits, regional collaboration, and economic development – informed by direct engagement with New England stakeholders during the report’s development. It provides a roadmap for policymakers and regulators to reduce electricity costs while building the grid needed for the future.
Media Contacts
Natalie Volk
Communications Manager, Clean Air Task Force
nvolk@catf.us, 703-785-9580
Conrad Jarzebowski
Senior Director, Communications, Acadia Center
cjarzebowski@acadiacenter.org
Efficiency Ahead: How State Energy Efficiency Plans are Driving Utility Bill Savings and Benefits Across the Northeast
Efficiency Ahead: How State Energy Efficiency Plans are Driving Utility Bill Savings and Benefits Across the Northeast
Acadia Center announces release of new report “Efficiency Ahead: How State Energy Efficiency Plans are Driving Utility Bill Savings and Benefits Across the Northeast.”
Acadia Center’s latest report highlights the essential contributions energy efficiency programs make to stabilizing costs, benefitting ratepayers, and diversifying the energy mix in seven states in the northeast.
Efficiency Ahead further recommends how standardizing metrics by states for program measurement, evaluation, and reporting would increase value.
ROCKPORT, ME – Acadia Center announces its new report: Efficiency Ahead: How State Energy Efficiency Plans are Driving Utility Bill Savings and Benefits Across the Northeast. This new analysis takes a closer look at the most recent energy efficiency plans developed by the six New England states and New York. It examines program investment levels, projected benefits and energy savings, cost-effectiveness levels, the impact of recent proposed funding cuts, and states’ progress relative to their peers on criteria like per-capita investment levels.
“State energy efficiency programs make a major contribution to the energy system as a low-cost resource, yet face a pivotal juncture in the northeast region,” said Jamie Dickerson, Senior Director, Climate and Clean Energy Programs. “Consumer affordability is front of mind for consumers and policymakers with rising energy prices. Other energy resources are rising in cost, yet cuts to ratepayer funded programs – which reduce system costs – have been threatened and implemented by leading states. It is more important than ever for policymakers, advocates, program administrators, and consumers to understand the value and evolving role of energy efficiency resource acquisition and shape the future trajectories of the programs to meet the emerging needs of the region.”
Each state in the Northeast operates and administers energy efficiency programs funded via electricity and natural gas bills to deliver energy efficiency and electrification improvements to customers. These ratepayer-funded energy efficiency programs have been and remain the largest source of investment in efficiency and building decarbonization for the region. These state programs have been operating for decades and provide major overall benefits in the form of reduced overall building energy consumption, energy cost savings to residents and businesses, reduced peak demand stress on the region’s electricity grid, and reductions in greenhouse gas (GHG) emissions, in addition to significant job creation and economic development increases.
The analysis conducted by Acadia Center in this report draws on publicly available data reported in each state’s three-year energy efficiency plan, annual program reports, and related filings. The analysis in the report yielded the following findings for program activity in the next three years:
- Record-level investments and lifetime benefits: Seven states poised to invest almost $10 billion in efficiency overall, with New England programs alone generating an estimated $19.3 billion in lifetime benefits.
- Significant electricity and fuel savings: New England and New York combined are expected to realize 700 trillion British thermal units (TBtu) in lifetime savings across all fuels, including 20 terawatt-hours (TWh) of electricity savings (lifetime) from efficiency investments in New England—equivalent to 5.2 million homes using natural gas for one year in New England.
- Wide range in per-capita investments by state: Program budgets range from $149 per capita in New York State to $631 per capita in Massachusetts—revealing differences in population, portfolio mixes, cost-effectiveness screening, and overall program ambition.
- Missed benefits from recent budget cuts: Massachusetts will lose out on $1.49 billion in lifetime benefits, 20 TBtus of energy savings, and 1.8 million metric tons (MMT) of carbon dioxide equivalent (CO2e) emissions by cutting $500m in program budgets. Rhode Island too faces cuts of 30% that would lose the state some $92m in benefits.
- Strong ongoing cost-effectiveness: Each dollar spent on efficiency yielding $2.93 in benefits across New England, on average—indicating an opportunity to increase investment levels further and acquire deeper cost-effective savings across the region.
- Major contributions to the region’s grid: Electric savings will help the region continue meeting a substantial portion of annual electric load via energy efficiency (20.6 TWh saved in 2023, or almost 15% of gross load).
While the benefits delivered by these programs are impressive, state program data were not easy to compile, and cross-state comparisons are made quite challenging by significant variations in reporting methodologies and data formatting across states. Cross-state collaboration to enable more uniform reporting would enable stakeholders to better communicate the significant positive benefits these programs are having on a regional scale.
“State energy efficiency programs are well positioned in the coming years to reduce overall building energy consumption, deliver energy cost savings to residents and businesses, reduce peak demand stress on the region’s electricity grid, and deliver reductions in greenhouse gas (GHG) emissions—all despite the changing overall landscape for efficiency investments and available funding sources,” said Ben Butterworth, Director of Climate, Energy, and Equity Analysis at Acadia Center and a lead author on this report. “Looking ahead, improving program design and administration can achieve even larger consumer and system benefits.”
MEDIA CONTACT
Jamie Dickerson
Senior Director, Climate and Clean Energy Programs
jdickerson@acadiacenter.org; 401-276-0600 x102
Eastern Canada – Northeast U.S. Interregional Transmission Planning Roadmap
Full Report: Eastern Canada-Northeast U.S. Interregional Transmission Planning Roadmap
On behalf of the Northeast Grid Planning Forum (NGPF), Acadia Center and Nergica are pleased to share the attached Eastern Canada – Northeast U.S. Interregional Transmission Planning Roadmap report (the Roadmap), commissioned by NGPF and prepared by Power Advisory. The Roadmap is intended to support ongoing conversations towards interregional planning of the New England Governors and Eastern Canadian Premiers and advance collaborative interregional transmission planning and the Northeast Power Coordinating Council (NPCC) region.
To support this essential work, this Roadmap provides independent technical perspectives on potential approaches to structuring a coordinated interregional transmission planning framework for the combined Northeast region. The attached Roadmap:
- Identifies challenges to collaborative transmission planning – such as differing regulatory frameworks, fragmented planning processes, and complexities in aligning priorities across multiple jurisdictions.
- Proposes possible approaches and identifies existing models for optimized planning and investment, while respecting the autonomy of each state and province.
Community Powered Progress: A Pathway to Greater Community Participation in Transmission Infrastructure Projects
New York’s Household Energy Burden Imperative: Challenges and Solutions
To make this analysis accessible, Acadia Center has developed a one-page explainer, a medium-length version, and a full report with in-depth findings and policy recommendations. Read the full report and supporting materials to learn how policymakers can take action to make energy affordability a reality for households in New York.
The Energy is About to Shift
A new report from Acadia Center and Clean Air Task Force (CATF) examines the critical role that community engagement will play in meeting New England’s 2050 decarbonization goals. The report highlights the opportunity to accelerate the region’s clean energy progress by addressing local concerns and better equipping communities to meaningfully participate in siting and approval processes.
Drawing from prominent case studies around the region, the report also identifies promising options for developers, communities, and policymakers to improve project planning and engagement, helping reduce the risk of failures, legal challenges, and delays. Without comprehensive reforms to improve community engagement processes and modernize siting and permitting policies, the region’s clean energy transition risks significant delays and setbacks.
- Part 1 of the report (Sections 1 – 3) examines the clean energy infrastructure needs for the New England region. To jump to part 1 of the report, click here.
- Part 2 of the report (Section 4 and Appendix) examines how to build a supportive community and policy environment for clean energy, while considering several case studies in the region. To jump to part 2 of the report, click here.
This report summarizes the findings of a year-long assessment, offering options and opportunities for both state and local governments, as well as for community stakeholders and project developers. As New England transitions from fossil fuels to a decarbonized, renewable grid, the success of this transformation will depend on active and meaningful community engagement. Without local buy-in, critical clean energy projects will continue to face significant headwinds and delays, putting the region’s climate goals at risk.
Webinar 1:
PowerPoint Slides: Energy is About to Shift_Webinar
Webinar 2:
PowerPoint Slides: Energy is About to Shift_Webinar 2
RGGI Funds in Action: Insights into the Allocation of RGGI Proceeds
Acadia Center RGGI Funds in Action
The Future is Electric: Part II
Commissioned by New Jersey Conservation Foundation, this report outlines the fact that New Jerseyans in an average insulated gas-heated home can save anywhere from 4% to 41% on their annual energy bills by adopting highly efficient electric appliances such as heat pumps depending on utility service territory, and up to 69% in a typical drafty home if paired with weatherization.
Based on winter 2022-2023 utility rates, Acadia Center analysts found that New Jerseyans who live in poorly insulated gas homes can save $1,550 to $3,240 each year, a range of 47% to 69% savings on annual energy bills depending on service territory, by investing in electrification and weatherization.
Acadia Center NJ Future is Electric Part II Report
Acadia Center’s Findings and Recommendations for the Third RGGI Program Review
To learn more about Acadia Center’s Findings and Recommendations for the Third Program Review of the Regional Greenhouse Gas Initiative, you can download the full report, FAQs, and press release below.
RGGI states will be providing public comment and listening opportunities in the coming months. Acadia Center will be offering a webinar on April 11, 2023, at noon (EST) to provide information from our RGGI Report that can be used in commenting to RGGI states in the public processes they will be starting soon. If you would like to register for this webinar, please do so here.
Media Contact:
Amy Boyd
Vice President, Climate and Clean Energy Policy
617-742-0054 x102; 940-367-4992 cell