Transmission Access Charges

Wasteful electricity transmission spending is hurting California communities. Our reforms will fix this.

The problem with Transmission Access Charges (TAC)

You don’t need to have deep knowledge of the electricity system to understand the issue with TAC — and how we can fix it.

What’s wrong with TAC

Why this hurts California

How we can fix TAC

Growing transmission costs threaten to become a crisis

Today, TAC create a massive market distortion that could cost Californians billions of dollars in unnecessary electricity transmission spending.

If we don’t fix this problem, soon it could cost more to deliver energy than to generate it. This will only get worse as California moves to clean energy, electric vehicles, and building electrification.

Consequences for ratepayers

It wouldn’t make sense to pay the Golden Gate Bridge toll if you don’t cross the bridge. But this is how we are charged for electricity transmission in much of California. Currently, ratepayers pay the same charge for “using” the transmission system whether or not the energy they use travels across it.

This has huge consequences for ratepayers, because it causes community choice aggregators (CCAs) and investor-owned utilities (IOUs) to ignore the transmission costs when they buy energy for customers — so they often end up buying energy from distant sources that need billions of dollars of wires to reach customers. The more utilities buy remotely generated energy, the more transmission has to be built to carry it, driving up California’s energy bills. In other words, utilities buy energy that’s cheaper for them, but more expensive for all of us.

The real cost of locally generated energy

Unlike remotely generated energy, locally generated energy does not require construction of a massive transmission network to move electricity from source to customer.

When this major advantage is priced into the total cost of energy, clean local energy is much more competitive and actually less expensive in many cases:

(Click image to enlarge)

TAC steal 3 cents per kWh from clean local energy projects — raising the cost of this energy by as much as 50% and disadvantaging an industry that has the potential to drive economic development for every community in the State.

How TAC reform can contain exploding transmission costs

We can save Californians over $60 billion in unnecessary spending over the next 20 years by reforming TAC.

Fixing TAC will make clean local energy cheaper, so more of these projects will be deployed. That means less transmission infrastructure will be built.

We know this works; already in 2017-2018, Californians saved $2.6 billion in avoided transmission costs because of increased energy efficiency and clean local energy. Fixing TAC will increase these savings by encouraging more clean local energy.

The bottom line

The current way of charging for transmission is outdated now that clean local energy provides an efficient alternative to remotely generated energy.

Our reform

Charge for electricity transmission based on actual use of the transmission grid.

Change the way TAC are metered and assessed in California Independent System Operator (CAISO) territory so that all energy is charged for electricity transmission based on actual use of the transmission grid, consistently across all utility service territories. This is already done correctly for non-participating transmission owner (non-PTO) utilities, like California’s municipal utilities.

This sounds good in theory, but does it work in practice?


Most of California’s independent municipal utilities have been saving ratepayers money for decades because they are assessed transmission charges based on actual use of the transmission system. These cost savings make clean local energy much more price-competitive and help these municipal utilities limit their impacts on the transmission system.

Now, the big private investor-owned utilities need to follow suit.

Our reform will put California on a path to sensible transmission spending

Our suggested reform will make it state policy for the cost of electricity to include both the cost of generating energy AND the cost of delivering that energy to consumers.

By pricing in the cost of transmission for remotely generated energy correctly, our reform will result in utilities buying the energy that is truly most cost-effective for customers. By aligning pricing with reality, this reform will correct the existing market distortion that has led to explosive growth in transmission spending and depressed the development of clean local energy.

More clean local energy means savings in transmission spending — a fact acknowledged by CAISO and the California Public Utilities Commission (CPUC) and supported by irrefutable evidence.

Benefits from this fix

  • Reduce the costs of clean local energy by 3 cents per kWh.
  • Save Californians billions of dollars in unnecessary transmission costs over 20 years.
  • Keep energy dollars in local communities by spurring investment in local renewables.
  • Improve resilience by building more clean local energy resources.
  • Reduce emissions from electricity loss on long transmission lines.
  • Protect Californians from unfair transmission costs under a regional electric grid.

How to unleash distributed energy resources in CA by fixing transmission costs allocations

Doug Karpa, Policy Director with the Clean Coalition, presented on the TAC Campaign in this webinar on May 10, 2018.

Previous webinars are available here.


The Clean Coalition's TAC proposal ensures that the transmission grid is consistently paid for by energy that actually uses it. Importantly, this approach accurately values all local renewables and other distributed energy resources for avoiding transmission use. Bravo to this effort, which I am pleased to support.

Dan Kammen
Professor of Energy, University of California, Berkeley & Energy and Climate Partnership of the Americas Fellow, supporting the US Secretary of State

This is a question of equity, environmental justice, and fundamental fairness. Ratepayers are being extorted by utilities profiting from excess transmission investment, and regulators have failed to make simple reforms to limit excessive transmission growth. This “business as usual” situation is no longer acceptable.

Today, CAISO has recognized this is a genuine issue, but is deferring to stakeholders with vested interests in ever more transmission spending. This means that the state of California must step in through the legislature and the CPUC to develop a comprehensive roadmap for transmission cost recovery that will stop penalizing utilities and CCEs that are doing their part to make the transmission system cheaper for everyone.

Please add your voice to those of our elected officials and regulators demanding that this expensive system be fixed.

Key documents

Draft 2020 TAC bill language (January 2020)
Draft 2019 TAC bill language (December 2018)
SB 692, our previous TAC bill (2017)
Two-page TAC overview (October 2018)
White paper on TAC rate design (February 2018)
Distribution System Operator (DSO) Future presentation (June 2017); download PPT and PDF

Key regulatory filings

November 22, 2019 comments on the CAISO stakeholder process for Extended Day Ahead Markets (EDAM): Recommending a reform on measuring TAC.
October 9, 2018 comments on Transmission Access Charge Structure Enhancements: Draft Final Proposal: Addressing the CAISO draft final proposal that was published on September 17, 2018.
July 18, 2018 revised comments on CAISO’s second TAC structure straw proposal: Addressing the concerns and issues raised by CAISO with respect to its second straw proposal on the TAC structure.
April 25, 2018 comments on CAISO’s second TAC structure straw proposal: Addressing the concerns and issues raised by CAISO with respect to its second straw proposal on the TAC structure.
February 15, 2018 Clean Coalition white paper on TAC rate design: Outlining the specific cost-shifting impacts, relationship to cost-causation, legal requirements, and specific technical aspects of TAC rate design.

Key media coverage

How to protect California ratepayers, expand clean local energy and avoid bailing out PG&E | Utility Dive (May 13, 2019)
Making Energy Transmission Charges Fair To Solar Generators | CleanTechnica (October 30, 2018)
CAISO Developing Transmission Access Charge Proposal | California Energy Markets (October 5, 2018)
California’s Alternative to Grid Regionalization: Expanding the Energy Imbalance Market | GTM Squared (September 7, 2018)
Exploding transmission costs are the missing story in California’s regionalization debate | Utility Dive (July 5, 2018)
Expanding the Energy Imbalance Market Is the Right Way to Regionalize California’s Grid | Greentech Media (March 13, 2018)

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