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The Case for a Federal Grid Planning Authority

June 26, 2024

Shelley Welton
Shelley Welton

Prof. Shelley Welton proposes the creation of a public grid planning authority to develop grid expansion plans in the national interest.

Shelley Welton, Presidential Distinguished Professor of Law and Energy Policy, argues that a more fundamental reexamination of how the electricity grid is planned and paid for is a critical prerequisite to accomplishing the rapid infrastructural shift necessary to address climate change.

As part of the Hamilton Project of the Brookings Institution, Welton’s policy proposal advocates applying a governance lens to grid problems and outlines how the Federal Energy Regulatory Commission (FERC) could use its remedial authority to disallow utilities from pursuing parochial, expensive grid expansions while requiring robust regional and interregional planning and cost allocation. 

From the proposal:

The U.S. electricity grid is nearing crisis mode, plagued by a suite of challenges including lengthy delays in interconnecting new resources, insufficient regional and interregional transmission expansion, and increasing reliability concerns. This policy proposal argues that these problems confronting the grid should be understood centrally as a challenge of governance. For-profit companies have too large a role in the long-term, systemic planning of the electricity grid, causing U.S. consumers to dramatically overspend on grid projects that serve incumbents’ financial interests but do not efficiently or effectively accomplish public goals for the system. Recent reforms improve grid planning at the margins but do not adequately address underlying governance concerns. To remedy these governance flaws, the paper proposes the creation of a public grid planning authority to develop grid expansion plans in the national interest, accompanied by changes to grid oversight to enable more scrutiny of proposed utility projects that do not align with national and regional plans. After laying out how legislation could create an ideal public grid planning entity, the paper explores how federal energy agencies could accomplish a similar set of governance reforms through more effective use of existing legal authorities. These changes would benefit communities across the country by containing the cost of electricity while enabling a cleaner and more resilient energy system.

Read more at the Brookings Institution.