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.

Read the summary paper, legal analysis, and economic analysis here.

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Press Contacts

Natalie Volk, Communications Manager, [email protected], +1 703-785-9580

Conrad Jarzebowski, Senior Communications Director, Acadia Center, [email protected]

About Clean Air Task Force 

Clean Air Task Force (CATF) is a global nonprofit organization working to safeguard against the worst impacts of climate change by catalyzing the rapid development and deployment of low-carbon energy and other climate-protecting technologies. With 30 years of internationally recognized expertise on climate policy and a fierce commitment to exploring all potential solutions, CATF is a pragmatic, non-ideological advocacy group with the bold ideas needed to address climate change. CATF has offices in Boston, Washington D.C., and Brussels, with staff working virtually around the world. Visit catf.us and follow @cleanaircatf. 

About Acadia Center

Acadia Center is a nonprofit organization with over 25 years of experience dedicated to advancing transformative clean energy solutions that promote a livable climate and a more equitable economy in the Northeast United States and beyond. Through rigorous data analysis and strategic partnerships, Acadia Center advocates for policies that significantly reduce carbon emissions and address systemic energy challenges. By collaborating with governments, industries, and communities, Acadia Center’s bold strategies help to ensure an inclusive and sustainable energy future for all.