A Growing Grid Needs Market Discipline: Five Principles for Transmission Policy

Nick Loris writes for RealClearEnergy about the need for consumer-first transmission reform.

In a rare Level 3 alert, the North American Electric Reliability Corporation (NERC) warns that hyperscale data centers are introducing volatile, hard-to-predict load swings—where gigawatts can drop off the grid in seconds—that utilities aren’t equipped to manage, creating a new reliability risk as electricity demand surges. This comes on the heels of recent Senate and House hearings on the state of the bulk power system and how to meet growing electricity demand while protecting ratepayers.  In NERC’s warning and the Senate hearings, transmission policy featured prominently.

With rising electricity demand, America’s energy economy needs more transmission. That can be done at great expense and in an opaque manner. Or it can be done cost-effectively and transparently. These principles lay the foundation to ensure that transmission needs protect ratepayers, enable competition, and provide grid reliability at the lowest possible cost. That was the core argument of a recent op-ed by Cato’s Travis Fisher (who provided excellent testimony before the Senate) and me.

And it is a core argument in a framework developed by a coalition of right-of-center organizations, including C3 Solutions, the R Street Institute, Americans for Prosperity, the Pacific Legal Foundation, the Abundance Institute, the American Conservation Coalition, and the Conservative Energy Network. The framework lays out five principles for reforming transmission policy around competition, cost discipline, and accountability.

Read more in RealClearEnergy here.