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

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 32 U.S. electricity system interfaces crossing grid or market seams finds an average achieved cost savings of at least $1226 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 is left on the table due to under-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. These findings motivate the development and deployment of solutions that improve interregional transmission operations, in parallel with robust transmission infrastructure planning.