The nation's electric grid is outdated, increasingly unreliable and ultimately unprepared for growing customer demand. The scale of the problem came in stark relief near Christmas when the Eastern U.S. grid system nearly collapsed during a record cold spell.
The reasons for that near-miss are still being discovered. But one that doesn't get nearly the attention it deserves is the role state laws on transmission lines – which favor incumbent energy producers over newcomers – have contributed to a shortage of transmission capacity. As Jim Rossi writes in Regulation Magazine, Right of First Refusal (“ROFR”) laws are at the heart of the problem:
To take one example, a 2019 statute enacted by the Texas Legislature states that the ability to build, own, or operate new transmission lines “that directly [connect] with an existing utility facility … may be granted only to the owner of that existing facility.” Under this Texas ROFR law, a transmission line to serve retail customers may only be built by an incumbent utility. The statute prohibits Texas state regulators from granting a permit for a new line to a competitive transmission developer even if regional planners have selected it as the best option and if that project is the least‐cost option for regulators. Minnesota enacted a similar statute in 2012, giving in‐state utilities “the right to construct, own and maintain an electric transmission line that has been approved for construction” by a FERC‐regulated transmission planning process.
Using the power of the state to block competition…and, by extension, extract higher prices from a captive customer base? That's just more rent-seeking topped off with a heavy dose of regulatory capture. It's a small wonder our nation's electric grid works – for customers – at all.
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
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Comrade chairman Xi den keeps touting, ‘electric, electric, electric.’ Fix it, dummy.
Grid Updates etc:
Secure substations
Stronger walls
Improve cybersecurity
ID employees more
Use new materials for Grid
Hire new Blood
Be flexible
“Rent seeking” indeed. No competition, leveling of rates across sources regardless of which source is primary for a given area.
I could go on..
I personally don’t like the idea of 5 different energy providers installing different sets of transmission lines in a given area – unless they can all be underground…
You miss the point. Under the laws the article refers to, a new energy provider would be allowed ONLY if they installed a different set of transmission lines. They are PROHIBITED from being allowed to connect to existing transmission lines.
Harden the grid against an enemy EMP attack. North Korea and Iran have or soon will have the capability to destroy the grid with one nuclear weapon. That is the biggest threat in my book.
add Thorium reactors into system
Reuse garbage into fuel
Update systems
I believe it’s time for or legislature to revisit that regulation, in TX, after that freeze debacle 2 yrs ago. True enough we weathered the last 1 this yr, but..