{"id":359655,"date":"2024-12-29T09:29:34","date_gmt":"2024-12-29T08:29:34","guid":{"rendered":"https:\/\/climatescience.press\/?p=359655"},"modified":"2024-12-29T09:29:37","modified_gmt":"2024-12-29T08:29:37","slug":"securing-the-u-s-electric-grid-requires-major-reform","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=359655","title":{"rendered":"Securing the U.S. electric grid requires major reform"},"content":{"rendered":"\n
\"\"
The glowing sunset casts an orange hue over electric pylons and a winding path, creating a vibrant atmosphere.<\/figcaption><\/figure>\n\n\n\n

<\/p>\n\n\n\n

From CFACT<\/a><\/p>\n\n\n\n

By Eric Olson<\/a><\/p>\n\n\n\n

As artificial intelligence, data centers, and electric vehicles drive unprecedented electricity demand, our aging transmission infrastructure struggles to keep pace. At the center of this crisis lies an obscure but powerful legal provision: the Right of First Refusal, or ROFR. These laws grant incumbent utilities exclusive rights to build new transmission projects, effectively creating regional monopolies that stifle innovation.<\/p>\n\n\n\n

The current level of electricity demand is unprecedented. The Texas grid repeatedly broke consumption records in 2024. Yet Texas and other grids are less able to attach to new power supplies than in the past. The construction of high-voltage transmission lines has plummeted from 2,000 miles annually to just 700.<\/p>\n\n\n\n

The reason we have fewer new transmission lines is bad federal and state policy. Since 1996, the Federal Energy Regulatory Commission has encouraged open access of new utilities to transmission lines. Yet federal rules for a long time allowed existing utilities priority in the construction of these new lines, known as ROFR, from which they could exercise a type of veto on competitors. In 2024, after a short attempt to end this policy, the commission put a version of it back in place, reinforcing incumbent utilities\u2019 dominance precisely when the grid demands innovation.<\/p>\n\n\n\n

State-level ROFR laws have further fragmented the market. A patchwork of regulations across the Midwest and Great Plains\u2014including Indiana, Minnesota, and Texas\u2014has created regions where competitive bidding for transmission is effectively prohibited. This balkanization makes it nearly impossible to develop the long-distance, high-voltage transmission lines essential for interstate energy integration. Competitive bidding could reduce transmission costs by up to 30% by some estimates, but these savings remain unrealized under current law.<\/p>\n\n\n\n

The Iowa Supreme Court recognized the problem with incumbent utilities in 2023 when it struck down the state\u2019s ROFR law, denouncing it as \u201ccrony capitalism.\u201d The court\u2019s decision highlighted how these laws not only inflate costs but potentially violate the Constitution\u2019s Dormant Commerce Clause by discriminating against interstate commerce. By favoring local incumbents over out-of-state developers, ROFR laws create legal vulnerabilities while hampering essential infrastructure development.<\/p>\n\n\n\n

Defenders of ROFR laws argue they ensure stability and accountability. Incumbent utilities, they claim, possess the expertise and local knowledge to maintain reliable service. This argument might have held water in the era of vertically integrated utilities serving fixed geographic areas. But today\u2019s energy landscape demands flexibility and innovation. Independent developers have demonstrated their ability to build transmission lines faster and cheaper, often incorporating advanced technologies that traditional utilities have been slow to adopt.<\/p>\n\n\n\n

The current system\u2019s failures carry mounting costs. Beyond the immediate economic impact of outages and delays, America risks falling behind in the global energy transition. China has built more high-voltage transmission lines in the past five years than the U.S. has in the past 20 years. Without reform, the U.S. grid will become an increasingly costly bottleneck in our economic infrastructure.<\/p>\n\n\n\n

The solution requires action at multiple levels. Congress could preempt state ROFR laws for interstate projects, recognizing transmission infrastructure as critical to national security and economic competitiveness. FERC could strengthen competitive provisions while creating streamlined processes for multi-state projects.<\/p>\n\n\n\n

Joint ownership models of transmission lines offer a promising middle ground. By requiring incumbent utilities to partner with independent developers, states can preserve local accountability while introducing competitive pressures. These arrangements have already succeeded in several regions, delivering projects on time and under budget. The Southwest Power Pool, for instance, has used joint ownership to accelerate transmission development while maintaining strong reliability metrics for its incumbent utilities.<\/p>\n\n\n\n

Critics may worry that eliminating ROFR laws could create planning chaos or compromise reliability by fragmenting development. But experience proves otherwise. Regions with competitive transmission markets have maintained or improved reliability while reducing costs. The key lies in creating clear rules, transparent processes, and strong oversight\u2014not in protecting incumbent monopolies.<\/p>\n\n\n\n

The path forward requires political courage and regulatory clarity. Policymakers must recognize that grid modernization, like the interstate highway system before it, demands national coordination. The alternative\u2014a balkanized system of regional monopolies\u2014will continue to inflate costs and delay progress.<\/p>\n\n\n\n

This article originally appeared at Real Clear Energy<\/a><\/em><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

As artificial intelligence, data centers, and electric vehicles drive unprecedented electricity demand, our aging transmission infrastructure struggles to keep pace. At the center of this crisis lies an obscure but powerful legal provision: the Right of First Refusal, or ROFR. These laws grant incumbent utilities exclusive rights to build new transmission projects, effectively creating regional monopolies that stifle innovation.<\/p>\n","protected":false},"author":121246920,"featured_media":359656,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691831879,691832340,691832339,691820384],"class_list":{"0":"post-359655","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-uncategorized","8":"tag-federal-energy-regulatory-commission","9":"tag-high-voltage-transmission-lines","10":"tag-right-of-first-refusal-rofr","11":"tag-u-s-grid","13":"fallback-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/12\/0Electricity-grid-transmission-wires.jpg?fit=2508%2C1672&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1vyT","jetpack-related-posts":[{"id":433557,"url":"https:\/\/climatescience.press\/?p=433557","url_meta":{"origin":359655,"position":0},"title":"The AI Race Isn\u2019t Just About Chips. 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