Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 HOUSE BILL 1813 3
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By: Representative Gramlich 5
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For An Act To Be Entitled 8
AN ACT TO ADOPT THE FAIR AND EFFICIENT TRANSMISSION 9
COMPACT; AND FOR OTHER PURPOSES. 10
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Subtitle 13
TO ADOPT THE FAIR AND EFFICIENT 14
TRANSMISSION COMPACT. 15
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 17
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SECTION 1. Arkansas Code Title 23, Chapter 3, is amended to add an 19
additional subchapter to read as follows: 20
Subchapter 8 — Fair and Efficient Transmission Compact 21
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23-3-801. Text of compact. 23
The Fair and Efficient Transmission Compact is enacted into law and 24
entered into by this state with all states legally joining therein and in the 25
form substantially as follows: 26
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FAIR AND EFFICIENT TRANSMISSION COMPACT 28
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Article 1 — Statement of Purpose, Findings and Declaration of Policy 30
The intent of the Fair and Efficient Transmission Compact ("Compact") is to 31
lower the cost of construction of new high -voltage transmission 32
infrastructure and facilitate the expansion of transmission capacity through 33
cost-effective transmission planning, siting and construction. 34
The mid-South region is experiencing rapid growth in energy demand as 35
business and industry of all types seek to build, expand and relocate to 36 HB1813
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areas that have an abundance of affordable and reliable energy resources. 1
This economic growth benefits citizens by creating jobs, increasing local 2
revenues, and supporting new business opportunities. 3
To ensure that the states in the mid -South region participate in this 4
transformative economy, the parties to this Compact understand that new 5
transmission capacity must be added to the grid and will pursue measures 6
necessary to attract infrastructure investments to advance innovation, use of 7
improved technology and enhance our national security. 8
A robust, multi-state, regional transmission system provides a range of 9
benefits for citizens and consumers, including access to all types of 10
generation resources, economic development activity, and enhanced grid 11
resiliency in the face of multiple threats. However, certain policies and 12
regulatory inaction have hampered the ability to modernize and expand 13
transmission assets in the mid -South region. 14
By entering into this Compact, the participating states affirm that policies 15
that encourage and allow for a competitive transmission construction bidding 16
process is in the public interest and in the best interest of electric 17
ratepayers and the electric marketplace. While the independence and special 18
needs of each state are to be recognized and safeguarded, today’s regional 19
and interregional transmission needs require cooperative action among states 20
to avoid the application of discriminatory, anti -competitive policies and 21
allow different companies to compete for the opportunity to construct new 22
transmission infrastructure. 23
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Article 2 – Definitions 25
Compact – An interstate legal agreement or document between the states 26
of Arkansas, Louisiana, Mississippi and Texas 27
Dynamic Line Rating (DLR) - Shall refer to any technology or 28
methodology used to more accurately determine current -carrying capacity 29
limits of existing or new transmission lines by determining conductor thermal 30
ratings with improved or more accurate data. 31
Electric Transmission – The process of moving bulk electricity from 32
power generation stations to where it is consumed by end -use customers. 33
Infrastructure involved includes high -voltage power lines, substations, 34
transformers and associated equipment. 35
ERCOT – Electric Reliability Council of Texas is a regional entity that 36 HB1813
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manages the transmission system in the central and southern portion of Texas. 1
Grid-Enhancing Technologies (GETs) – The use of advanced transmission 2
technologies and analytical tools to maximize the use of electricity across 3
the existing (and future) high voltage transmission system that include 4
dynamic flow rating sensors, power flow control devices, advanced conductors, 5
and improved viability of inverter -based generation availability. 6
Load Growth – Shall refer to the increase in demand for electricity 7
over time, which is factored into the strategies of planning by regional 8
transmission organizations and retail electricity providers. 9
Long-Term Transmission Planning – This is an open, structured effort to 10
expand the transmission system in a multi -state, regional and interregional 11
area to meet the economic development opportunities, generation 12
interconnection requests, base line reliability requirements and resiliency 13
with improved economic and operational characteristics of the transmission 14
system. 15
MISO - Midcontinent Independent System Operator is an independent, not -16
for-profit, member-based regional transmission organization (RTO) in the 17
central portion of the United States from Canada to the Gulf of Mexico and is 18
responsible for keeping the power flowing across its geographic region 19
reliably and cost effectively. It is part of the Eastern Interconnection 20
grid. 21
MISO South – A subregion of MISO that includes parts of the states of 22
Arkansas, Louisiana, Mississippi and Texas. 23
Open Bidding Process – A process to allow competitive bidding by 24
different qualified entities to design, construct, and own new transmission 25
projects to expand the existing transmission system. 26
PJM Interconnection LLC (PJM) - is a regional transmission organization 27
(RTO) in the United States. It is part of the Eastern Interconnection grid 28
operating an electric transmission system serving all or parts of Delaware, 29
Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, 30
Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of 31
Columbia. 32
Regional Transmission Organizations (RTO) - This is an independent, 33
organization that manages the transmission of electricity across multiple 34
states. RTOs are responsible for ensuring the reliability of the power 35
supply and balance between supply (usually generation) and demand (load 36 HB1813
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connected to the transmission system). Some examples of RTOs in the 1
transmission system of the Eastern Interconnect are ISO -NE, MISO, NYISO, PJM 2
and SPP. 3
Right of First Refusal (ROFR) – Usually state laws that give incumbent 4
utilities the first right to construct, own, and operate new transmission 5
lines within their service territory. These laws often limit or prohibit 6
non-traditional utility entities from participating in the design, 7
construction, operation, ownership and maintenance of transmission 8
facilities. 9
State Regulatory Entities – The present state or local authorized 10
regulatory entities (public utility commissions or city council) providing an 11
oversight and policy direction for utilities within a state or local area 12
which are authorized by the various state constitutions and laws. 13
SERTP – Southeastern Regional Transmission Planning is a group of 14
entities involved in the planning of the expansion and development of the 15
transmission system in the southeastern United States under the management of 16
the following entities: Southern Company, Dalton Utilities, Georgia 17
Transmission Corporation, the Municipal Electric Authority of Georgia, 18
PowerSouth, Louisville Gas & Electric Company, Kentucky Utilities Company, 19
Associated Electric Cooperative Inc., the Tennessee Valley Authority, Duke 20
Energy Carolinas, LLC, Duke Energy Progress, LLC. SERTP is part of the 21
Eastern Interconnection grid. 22
SPP – Southwest Power Pool is a regional transmission organization 23
(RTO) in the central, southwest and northwestern parts of the United States; 24
a nonprofit corporation mandated by the Federal Energy Regulatory Commission 25
to ensure the reliable supply of power, adequate transmission infrastructure 26
and competitive wholesale electric prices on the behalf of its members. SPP 27
is part of the Eastern Interconnection grid. 28
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Article 3 – Council Established 30
There is hereby created an agency of the party states to be known as the Fair 31
and Efficient Transmission Council (“Council”) to administer the Compact. 32
The Council shall commence operations upon adoption of the Compact by at 33
least three of the party states in the mid -South region. The Council shall 34
be composed of delegations from each party state that has adopted the 35
Compact. Each delegation shall be composed of three representatives from 36 HB1813
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each state, one of whom shall be appointed or designated in each party state 1
to represent the Governor, the State Senate, and the State House of 2
Representatives, respectively. Each Council representative shall be 3
designated or appointed in accordance with the law of the state which he or 4
she represents and serving and subject to removal in accordance with such 5
law. Any member of the Council may provide for the discharge of his or her 6
duties and the performance of his or her functions thereon (either for the 7
duration of his membership or for any lesser period) by a deputy or 8
assistant, if the laws of his state make specific provision for this 9
assignment of these responsibilities. This assignment of a deputy or 10
assistant shall be sent to the Executive Director or Chairman of the Council 11
in writing prior to the event or meeting where the deputy or assistant will 12
represent the Council representative. 13
Each member of the Council shall be entitled to one vote each. No action of 14
the Council shall be binding unless taken at a meeting at which a majority of 15
all party states are represented and unless a majority of the total number of 16
votes on the Council are cast in favor thereof. 17
The Council shall appoint an Executive Director who will serve at its 18
pleasure and who shall act as the Secretary. The Executive Director, with 19
the approval of the Council, shall appoint and discharge such personnel as 20
may be necessary for the performance of the Council’s activities. This 21
Council shall meet at least once a year. The Council, with the assistance of 22
the Executive Director, will develop Bylaws to assist in the activities 23
associated with its operation. 24
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Article 4 – The Council 26
The Council shall not be construed to displace the regulatory 27
responsibilities of the existing relevant electric rate regulatory 28
authorities. The Council shall prepare and keep current guidelines for fair 29
and efficient transmission construction that support an open bidding process 30
for new transmission facilities. These guidelines shall be developed within 31
one year of the creation of the Council. 32
The Council shall elect, from among its members, a Chairman, a Chairman -33
Elect, and a Treasurer. Elections shall be annual. The Chairman -Elect shall 34
succeed to the office of Chairman for the year following his service as 35
Chairman-Elect. For purposes of the election and service of officers of the 36 HB1813
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Council, the year shall be deemed to commence at the conclusion of the annual 1
meeting of the Council and terminate at the conclusion of the next annual 2
meeting thereof. 3
The Council annually will prepare a report for the Governor of each party 4
state, this report covers the activities of the Council for the preceding 5
year, proposed activities for the coming year, and any recommendations 6
adopted by the Council. 7
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Article 5 – Principles of Fair and Efficient Transmission Construction 9
States that enter into and become a party to the Compact shall agree to 10
recognize the following principles and pursue policies that allow for a 11
competitive, fair and efficient transmission market to flourish in the mid -12
South region: 13
1. Energy Agnostic. State statutes, regulations, ordinances and 14
policies shall not discriminate against any particular energy resource, 15
energy generation method or procured energy type. Technology agnostic energy 16
policies ensure that energy sources are chosen based on cost and reliability. 17
State policies must reflect an openness to using a variety of energy 18
resources, rather than a limit to a single type of energy. 19
2. Transmission Project Cost Allocation. The cost of new transmission 20
projects should be allocated holistically to all entities, that cause these 21
costs and that directly benefit, in a manner that is roughly commensurate 22
with, and proportional to, the costs caused and benefits received by those 23
projects. The cost allocation should be as granular and accurate as possible 24
while avoiding the targeting of specific industries. Costs should not be 25
assigned to parties that receive negligible or negative benefits. The 26
generators and loads can each be considered cost causers, beneficiaries, or 27
both and should be allocated costs accordingly. Retail jurisdictions that 28
directly seek to meet a public policy requirement through development of a 29
transmission project(s) should be considered a beneficiary of that project. 30
The cost allocation methodology for a transmission project should be fixed at 31
the time of the project approval. 32
3. Application of Interstate Compact. This agreement will be 33
submitted to and reviewed by each state legislative body for approval. Once 34
the Compact is approved, the Compact shall apply to all states equally 35
regardless of the time of adoption compared to the establishment of the 36 HB1813
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Compact. States will have equal representation, equal authority and equal 1
protection in the adoption and execution of a competitive bidding framework 2
and process. 3
4. Uniform Siting and Certification of Transmission Projects. This 4
Compact shall support two separate processes for siting and certification of 5
transmission projects. The states participating in this Compact will develop 6
a uniform siting process and certification standards as a condition of 7
joining the Compact. Participating states shall adopt the mutually agreed 8
upon processes for siting and certification of new transmission projects. 9
These processes must define a clear start date and define the party 10
responsible for initiating the process start date. The use of this uniform 11
siting and certification process may be used to minimize the time needed for 12
approval in additional states, once the first state has provided its approval 13
for interregional transmission projects. The member states’ processes for 14
siting, certification, and permitting shall provide a clear understanding for 15
relevant stakeholders. 16
5. Valuing Grid-Enhancing Technologies. Grid-enhancing technologies 17
(GETs) have been demonstrated to provide economic, operational and 18
reliability benefits and can be a timelier and/or cost -effective solution as 19
compared to new transmission line development. The Council shall recognize 20
and value the stated benefits of utilizing GETs for improvement of 21
transmission facilities, enhancement of grid performance and expansion of 22
existing transmission line capacity. States adopting the Compact shall allow 23
and streamline permitting and regulatory reviews for utilization of GETs. 24
Furthermore, member states of the Compact shall provide for the assurance 25
that GETs receive fair monetary valuation in any transmission developer’s 26
competitive bid. 27
6. Competitive Construction Bid Process. This Compact shall promote 28
intrastate and interstate transmission development and enhancement and 29
embrace the minimization of costs using an open bidding process. The open 30
bidding process should consider benefits to ratepayers including but not 31
limited to ensuring reliability, ratepayer cost savings, maximizing grid 32
efficiency, reducing grid congestion, and mitigating against grid stressing 33
events. The states participating in the Compact shall design and adopt into 34
this Compact a process for the administration and oversight of the bid 35
opening and selection process. The participants in this Compact may choose 36 HB1813
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to allow MISO to administer an open competitive bid selection process for the 1
construction of certain transmission projects. The present MISO process for 2
projects identified through Long Range Transmission Planning allow for 3
competitive bid processes for proposed new transmission projects. The 4
information on these MISO processes can be found in the Competitive 5
Transmission Process in Business Practice Manual BP -027 and Minimum Project 6
Requirements for Competitive Transmission Projects BP -029 both dated 7
1/25/2025. 8
7. Waiver for Existing Transmission Infrastructure. Existing 9
transmission infrastructure that has previously been permitted by states 10
participating in the Compact shall not be required to obtain new permits for 11
the purpose of upgrading, maintenance or renovation activities. Transmission 12
projects permitted to be constructed but delayed due to actions and matters 13
beyond the control of the developer shall not be forced to engage in the 14
permitting process if the original permits were obtained within a previous 15
10-year period. States participating in this Compact shall take action to 16
remove permitting barriers at applicable state agencies and regional bodies. 17
18
Article 6 - Construction and Severability 19
This Compact shall be liberally construed so as to effectuate the purposes 20
thereof. The provisions of this Compact shall be severable and if any 21
phrase, clause, sentence or provision of this Compact is declared to be 22
contrary to the constitution of any state or of the United States, or the 23
application thereof to any government, agency, person or circumstance is held 24
invalid, the validity of the remainder of this Compact and the applicability 25
thereof to any government, agency, person or circumstance shall not be 26
affected thereby. If this Compact shall be held contrary to the constitution 27
of any state participating therein, the Compact shall remain in full force 28
and effect as to the state affected as to all severable matters. 29
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Article 7 — Finances 31
The costs associated with the Council’s administration and operational 32
activities will be supported by an equal assessment to each state represented 33
on the Council. The Council will maintain adequate records to support the 34
expenses of operating this Council. No contracts with the Council will be 35
entered into or expenses incurred to support the Council’s activities without 36 HB1813
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a majority affirmative vote of its members. 1
2
23-3-802. Administration of Fair and Efficient Transmission Compact — 3
Rules. 4
(a) The various states party to the Fair and Efficient Transmission 5
Compact will rely on their respective Public Service Commission or Public 6
Utility Commission (Commission), such as the Arkansas Public Service 7
Commission, to administer the compact. A state’s Commission will be the 8
compact administrator for that state, unless administration of the compact 9
causes conflicts with existing laws, rules, or authorities that govern the 10
function and conduct of the Commission. In such case, a state may assign 11
responsibility to administer the compact to another agency capable of such 12
responsibility. 13
(b) A Commission may adopt rules that are consistent with the compact 14
necessary to implement this subchapter and are consistent with the principles 15
in Article 5 of the compact. 16
(c) A Commission is not required to adopt the rules of the Fair and 17
Efficient Transmission Council for the rules of the Fair and Efficient 18
Transmission Council to be effective in this state. 19
(d) For the purposes of the member state's ability to reject a rule 20
under Article 4 of the compact, a state may delegate its authority in this 21
provision to its Legislature, General Assembly, or a duly authorized and 22
recognized Legislative Council or Committee thereof. 23
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