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Interregional Electricity Transmission in the United States: Realized Savings and Opportunities for Increased Value, 2014 to 2023

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Listed:
  • Leila Safavi
  • Julie Mulvaney Kemp
  • Will Gorman
  • Dev Millstein
  • Ryan Wiser

Abstract

Interregional electricity trade in the United States reduces total energy costs, but falls short of maximizing the economic potential of existing transmission infrastructure. This analysis of thirty-two U.S. electricity system interfaces crossing grid or market seams finds an average achieved cost savings of at least $1,226 million per year. This positive impact is offset by an average annual cost of uneconomic interchange of $551 million. Additional value of at least $238 million per year could be enabled by increasing utilization. Notably, uneconomic flows and low utilization rates can persist even when the price spread between regions is large. These conclusions are derived from historical (2014–2023) data on the magnitude and direction of interregional price spreads, the magnitude and direction of net energy transfers, and how these variables coincide, but do not account for all system constraints. These findings motivate the development and deployment of solutions that improve interregional transmission operations, in parallel with robust transmission infrastructure planning. JEL Classification: Q40 Energy: General

Suggested Citation

  • Leila Safavi & Julie Mulvaney Kemp & Will Gorman & Dev Millstein & Ryan Wiser, 2026. "Interregional Electricity Transmission in the United States: Realized Savings and Opportunities for Increased Value, 2014 to 2023," The Energy Journal, , vol. 47(2), pages 51-79, March.
    • Handle: RePEc:sae:enejou:v:47:y:2026:i:2:p:51-79
    DOI: 10.1177/01956574251399644
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    References listed on IDEAS

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    1. Luis E. Gonzales & Koichiro Ito & Mar Reguant, 2023. "The Investment Effects of Market Integration: Evidence From Renewable Energy Expansion in Chile," Econometrica, Econometric Society, vol. 91(5), pages 1659-1693, September.
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    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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