Editing Electric power transmission (section)

== Market structure ==
{{Main|Electricity market}}

Electricity transmission is generally considered to be a [[natural monopoly]], but one that is not inherently linked to generation.<ref>{{cite book | title = Handbook on Electricity Markets | first1 = Richard | last1 = Schmalensee | chapter = Strengths and weaknesses of traditional arrangements for electricity supply | page = 16 | date =  2021 | publisher = Edward Elgar Publishing | doi = 10.4337/9781788979955.00008 | isbn = 9781788979955 | s2cid = 244796440 | chapter-url = https://www.elgaronline.com/view/edcoll/9781788979948/9781788979948.00008.xml}}</ref><ref>{{cite web | url = http://www.thehindubusinessline.com/iw/2004/08/15/stories/2004081501201300.htm | title = Power transmission business is a natural monopoly | author = Raghuvir Srinivasan | publisher = The Hindu | work = The Hindu Business Line | date = August 15, 2004 | access-date = January 31, 2008}}</ref><ref>{{cite web | url = http://www.reason.org/commentaries/kiesling_20030818b.shtml | title = Rethink the Natural Monopoly Justification of Electricity Regulation | author = Lynne Kiesling | publisher = Reason Foundation | date = 18 August 2003 | access-date = 31 January 2008 | archive-url = https://web.archive.org/web/20080213034400/http://www.reason.org/commentaries/kiesling_20030818b.shtml | archive-date = February 13, 2008 | url-status = dead }}</ref> Many countries regulate transmission separately from generation.

Spain was the first country to establish a [[regional transmission organization]]. In that country, transmission operations and electricity markets are separate. The transmission system operator is [[Red Eléctrica de España]] (REE) and the wholesale electricity market operator is Operador del Mercado Ibérico de Energía – Polo Español, S.A. (OMEL) [https://web.archive.org/web/20040906064835/http://www.omel.es/ OMEL Holding | Omel Holding]. Spain's transmission system is interconnected with those of France, Portugal, and Morocco.

The establishment of RTOs in the United States was spurred by the [[FERC]]'s Order 888, ''Promoting Wholesale Competition Through Open Access Non-discriminatory Transmission Services by Public Utilities; Recovery of Stranded Costs by Public Utilities and Transmitting Utilities'', issued in 1996.<ref>{{cite web|url=https://www.ferc.gov/legal/maj-ord-reg/land-docs/order888.asp|title=FERC: Landmark Orders – Order No. 888|website=www.ferc.gov|access-date=December 7, 2016|archive-url=https://web.archive.org/web/20161219014712/https://www.ferc.gov/legal/maj-ord-reg/land-docs/order888.asp|archive-date=December 19, 2016|url-status=dead}}</ref> In the United States and parts of Canada, electric transmission companies operate independently of generation companies, but in the Southern United States vertical integration is intact. In regions of separation, transmission owners and generation owners continue to interact with each other as market participants with voting rights within their RTO. RTOs in the United States are regulated by the [[Federal Energy Regulatory Commission]].

Merchant transmission projects in the United States include the [[Cross Sound Cable]] from [[Shoreham, New York]] to [[New Haven, Connecticut]], Neptune RTS Transmission Line from [[Sayreville, New Jersey]], to [[New Bridge, New York]], and [[Path 15]] in California. Additional projects are in development or have been proposed throughout the United States, including the [[Lake Erie Connector]], an underwater transmission line proposed by ITC Holdings Corp., connecting Ontario to [[Load serving entity|load serving entities]] in the PJM Interconnection region.<ref>{{cite web |date=8 December 2014 |title=How ITC Holdings plans to connect PJM demand with Ontario's rich renewables |url=http://www.utilitydive.com/news/how-itc-holdings-plans-to-connect-pjm-demand-with-ontarios-rich-renewables/341524/ |website=Utility Dive}}</ref>

Australia has one unregulated or market interconnector – [[Basslink]] – between [[Tasmania]] and [[Victoria (Australia)|Victoria]]. Two DC links originally implemented as market interconnectors, [[Directlink]] and [[Murraylink]], were converted to regulated interconnectors.<ref>{{Cite web |date=2008-07-18 |title=NEMMCO Power System Planning |url=http://www.nemmco.com.au/psplanning/psplanning.html#interconnect |archive-url=https://web.archive.org/web/20080718211829/http://www.nemmco.com.au/psplanning/psplanning.html#interconnect |archive-date=2008-07-18 |access-date=2022-11-14 }}</ref>

A major barrier to wider adoption of merchant transmission is the difficulty in identifying who benefits from the facility so that the beneficiaries pay the toll. Also, it is difficult for a merchant transmission line to compete when the alternative transmission lines are subsidized by utilities with a monopolized and regulated rate base.<ref>{{cite book |author=Fiona Woolf |title=Global Transmission Expansion |date=2003 |publisher=Pennwell Books |isbn=0-87814-862-0 |pages=226, 247}}</ref> In the United States, the [[FERC]]'s Order 1000, issued in 2010, attempted to reduce barriers to third party investment and creation of merchant transmission lines where a public policy need is found.<ref>{{cite web |title=FERC: Industries – Order No. 1000 – Transmission Planning and Cost Allocation |url=https://www.ferc.gov/industries/electric/indus-act/trans-plan.asp |url-status=dead |archive-url=https://web.archive.org/web/20181030205910/https://www.ferc.gov/industries/electric/indus-act/trans-plan.asp |archive-date=October 30, 2018 |access-date=October 30, 2018 |website=www.ferc.gov}}</ref>