Every day, the word tariff appears in the news feeds. These tariffs are taxes levied on goods crossing international borders. From solar panels to steel, import tariffs dominate today’s trade discussions. But there’s another kind of tariff quietly shaping everyone’s electric bill, the local economy, and even the climate: the electric transmission tariff.
While import tariffs shape global commerce, electric transmission tariffs shape the physical flow of electricity across the transmission grid. GIS plays a role in how much these tariffs cost.
Are these tariffs the same as the ones we hear about on the news?
No.
What are Electric Transmission Tariffs Exactly
In 1996, the Federal Energy Regulatory Commission (FERC) created Order 888, dubbed the Open Access Transmission Rule, which required transmission owners to open their lines to competitive power producers. But they didn’t get to do this for free. FERC then allowed owners to charge others for using their lines. These charges are called Open Access Transmission Tariffs (OATT).
For example, say you are a generator and want to ship 100 MW of power across a transmission line for one hour. You pay the owner a fee based on a FERC-filed tariff. A typical tariff is about $10 per MWh. So, shipping 100 MW of power across someone else’s line for one hour will cost you $1000. That’s a cool 8 million dollars per year. It adds up.
Mapping Cost: Seeing Tariffs Spatially
Unlike the more much-discussed import tariffs, transmission tariffs are intensely geographic. Where you build a power plant—down to the mile—can change your transmission costs by millions.
That’s where Geographic Information Systems (GIS) come in. In the era of energy transition, GIS isn’t just for mapping. Today, a huge queue of renewable energy projects is just waiting to be connected to the transmission system. When planning a new project, GIS can help developers seek the best location that minimizes transmission tariffs.
GIS is the backbone of smarter, more cost-effective utility planning. It’s how planners dodge high-cost transmission zones, streamline siting, and minimize tariffs—before the first shovel hits the dirt.
Every mile of the transmission line tells a story. Some miles are easy—flat terrain, sparse population, minimal environmental red tape. Others? Not so much—rugged mountains, sensitive wetlands, and high land acquisition costs. The cost to build and maintain that line shows up directly in transmission tariffs.
GIS allows planners to layer cost with geography. Want to see where storm risks, slope gradients, and right-of-way disputes stack up? Overlay weather, topography, and land ownership data. Suddenly, the cheapest path forward is visible—literally.
GIS is more than route planning; it is tariff planning. A transmission line built through difficult terrain isn’t just a construction headache—it’s an annuity of higher costs, locked into tariffs for decades. GIS helps avoid that trap.
From Equitable to Strategic: Tariff Design with GIS
In a fair world, everyone pays a tariff that reflects the cost of serving them. But real-world geography complicates that picture. Rural communities, for instance, often cost more to serve due to longer transmission distances and lower population density. Without spatial analysis, they risk being unfairly overcharged—or worse, under-served.
GIS allows for equitable tariff setting. Transmission owners can balance fairness with financial sustainability by analyzing usage, infrastructure, and demographics spatially. That’s not just good business—it’s good community engagement.
And it doesn’t stop there. By visualizing population growth and land use changes, GIS enables forward-looking tariffs. Utilities can forecast where costs will rise and proactively adjust. That means smoother rate cases and fewer regulatory surprises.
Generation Siting: Location is a Tariff Decision
Here’s a secret more planners are catching on to: where you put new generation directly affects your transmission tariff.
Let’s say you’re siting a new solar farm. Build it near a congested substation or inside a high-tariff zone. You’ve just baked extra cost into every kilowatt-hour. But use GIS to find a low-cost corridor with solid access to transmission—and suddenly, you’ve shaved dollars off your power purchase agreements for years to come.
GIS allows you to avoid tariff pain before it starts. By integrating substation proximity, line capacity, land value, and local load demand, planners can spot the least-cost connection point for new generation. This idea isn’t just good for developers—it’s essential for grid planners to manage costs.
GIS Data: The Foundation of Smarter Tariffs
Behind every good tariff map is a stack of great data layers:
- Topography tells you where it’s physically hard to build.
- Land use tells you where it’s legally hard to build.
- Population and load density tell you where demand justifies the cost.
- Weather patterns inform resilience planning and storm impact costs.
- Environmental overlays help avoid costly regulatory delays.
Each layer adds context, creating a multi-dimensional view of transmission cost. GIS isn’t just a map—it’s a decision engine.
Take satellite or high altitude digital imagery. By leveraging the appropriate image resolution with digital ortho image data, you can identify the optimal alignment of lines in rugged terrain without ever setting foot on the site. That saves money. That reduces risk. That lowers tariffs.
GIS in Action
GIS helps.
- Reduces first costs
- Lowers ongoing inspection and maintenance
- Finds the lowest risk route, lowering outage times
- Meet NERC requirements, such as FAC-003 and 008
- Develop wildfire mitigation plans
New technologies such as drones and imagery continue to lower the cost of transmission operations and maintenance.
Ultimately, GIS isn’t just a technology—it’s a way of thinking spatially about cost, equity, and risk.
By choosing the right path—literally—transmission owners shape a future grid that’s more affordable, resilient, and just.
So the next time we hear “tariff” on the news, think beyond imports. Think about power lines, the community, and how GIS is helping ensure that electricity costs make sense—not just on paper but on the map.
Learn how GIS can help utilities improve their overall operations, reduce costs, and thus lower the tariffs.