In the twenty-first century, the electric power industry is becoming increasingly regional in geographic scope. Due to the creation of wholesale power markets and the development of renewable energy resources, greater quantities of power flow across state lines today than at any time in the history of the industry. With this growth in the interstate trade in power, expanding the transmission grid can yield significant regional benefits. New transmission lines can enhance system reliability, reduce the level and volatility of power prices, and improve the environment on a local and global scale. While the benefits of new transmission are broadly shared, the costs of new transmission – both economic and non-economic – tend to be concentrated on the localities through which the lines run.
Despite the potentially large benefits from new transmission interconnections, aggregate transmission investment has declined in recent decades. State jurisdiction over transmission siting has been cited as a chief cause of underinvestment in the grid. Because of the asymmetry of benefits and costs, states often do not want to authorize lines that would benefit their neighbors at the expense of their own citizens. Those residing near proposed transmission lines tend to be among the most vocal opponents of them. For them, new lines are blights on the horizon and potential hazards to their health that frequently offer no tangible benefits in return. To compound the state and local bias against new transmission investment, powerful incumbent utilities sometimes use regulatory processes to block new projects as a means of protecting their market power.
To facilitate the construction of socially beneficial grid expansions, Congress should preempt state and local authority over the funding and siting of new transmission lines. The Federal Energy Regulatory Commission should be granted exclusive authority over where to site and how to pay for new transmission. A federal regulator would approve transmission projects based on a comprehensive examination of their benefits and costs, instead of the parochial assessment often performed today by states. Congress would be acting well within its constitutional authority and would, in fact, be following past legislative enactments in other network industries. Congress must act if the United States is to realize the vision of affordable, reliable, and clean electricity for all Americans.
- Electric power,
- federal preemption
Available at: http://works.bepress.com/sandeep_vaheesan/6/