On February 5, 2024, a politically diverse coalition (Niskanen Center, R Street Institute, Public Citizen, Institute for Local Self-Reliance, Open Markets Institute and the Center for Biological Diversity) urged FERC in its transmission rulemaking to rethink its proposed conditional Rights of First Refusal (ROFR).
The conditional ROFR would grant incumbent transmission providers with a joint venture partner the right to a no-bid monopoly on regional cost-allocation projects. The Coalition highlighted that recent court decisions underscore ROFRs’ tendency to stifle competition and innovation. They also reference an inventory of high-voltage transmission projects which indicate that non-incumbents have won a disproportionate share of the most complex projects, indicating that the ROFR would exclude developers with valuable expertise from regional planning processes. The letter highlights that while instituting a conditional ROFR is intended to address “perverse incentives” for incumbent providers to underinvest in regional transmission, there are ways to address this underinvestment besides resorting to an anticompetitive ROFR.