Neither Candidate has a Plan for Electric Infrastructure

Electric transmission is the elephant in the old Indian parable where the blind men feel a part of the elephant and describe it:  the leg is a tree, the tail a whip, the trunk a snake, the ears a fan.  Different states and the federal government govern different parts of the transmission system and it is not surprising they have different policies and views on how to treat transmission.

Transmission is in need of a dramatic transformation.

  • It is old and creaky.
  • Electricity demands are increasing in the digital age.
  • Some think cars should run on electricity.
  • Mandatory renewables has to get from where the wind blows to where people flick light switches.
  • The current transmission system was simply not designed for modern expectations of use.

Electricity is becoming increasingly the central nervous system of the nation as seen recently what happens when we lose it for even a short time.  Hurricane Sandy teaches us yet again the importance of resilient, adaptive, robust electric infrastructure.  Certainly nothing could have withstood the violence of Sandy in NY and NJ.  But methinks we might have survived a bit better with a massive overhaul in our policies for electric infrastructure.

We have revolutionized the policy and operation of other network industries in the last 30 years;

  • Telecom (1982 decision, implemented 1984);
  • Railroads (1980);
  • Trucks (1978 interstate, 1994 intrastate);
  • Airlines (1978);
  • Natural gas (1983 to 1992);
  • Cable (1996).

All have been successful and provided enormous benefits to consumers.

So what do we need to do:

  • Electricity is interstate commerce.  The federal Government must preempt states from policies relating to transmission (every other network industry did).
  • The federal government must then set an aggressive policy.
  1. Force the sale of the pieces to three entities that will operate transmission under FERC Regulation, similar to natural gas pipelines.
  2. Force distribution companies to divest of generation and then deregulate generation. Government should sell all its generation.
  3. Force distribution companies to get out of the customer business.  Let marketers market to consumers just like gasoline customers.
  4. Transmission and distribution should be considered the equivalent of privately owned highways: open access with tolls.

I am not late to this party.  Attached are some links going all the way back to 2002 when I was raising a red flag about the creaky transmission system.  Not much has changed.  It is NOT a utility problem; it is a political leadership problem.  We need a radical shift in policy to let/tell the utilities/states what to do.  I am a market conservative so arguing for more federal government control is not my usual motif.  Yet this is a clear instance of the need to exercise the interstate commerce clause to fix the problem (much as we did in other network industry reforms).

Nation’s Energy Leaders Asleep at the Switch; CAEM Vindicated in 2002 Prediction of Blackout http://www.electricenergyonline.com/?page=show_news&id=9481

http://www.elp.com/index/display/article-display/articles/electric-light-power/volume-81/issue-9/industry-news/blackout.html

http://www.msnbc.msn.com/id/3072714/ns/business-oil_and_energy/t/states-control-seen-grating-grid

http://usatoday.printthis.clickability.com/pt/cpt?action=cpt&expire=&urlID=7242270&fb=Y&partnerID=1660

Tragically, neither candidate has addressed this in their energy plans.  Crisis and Energy Markets has issued report cards and both candidates ignored these issues.  See the REP Index on www.caem.org.  

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