US Must Socialize Grid to Add Renewable Energy, Study Finds
Our history hampers a national grid
Hundreds of tiny local entities own small portions of our grid. None of them have enough income to seriously expand it. The cost and risk causes investors to require a high rate of return; which adds to the cost of transmission services, which arouses public opposition to new transmission proposals, which in turn add to the risk of investment. This has become a vicious cycle.
Balkanization of ownership hinders economies of scale and discourages investment. Complex and fragmented regulatory jurisdictions increase transaction costs, slow the permitting process, and add to the risk and uncertainty of transmission investments. Currently each state has its own transmission siting process and uses different parameters and terminology in evaluating transmission projects.
Each state has separate regulations for electric utilities in the state, making it difficult now to cross state lines as we must to build a national super grid. Half the country is served by regulated public utilities, and half is private. And there is a huge number of private, investor‐owned utilities. With the majority of transmission assets are privately owned, horizontal integration is extremely difficult.
Because of these barriers, there has been a sustained underinvestment in transmission for decades, even aside from the need for a major grid upgrade to add renewable energy.
This has created another problem:
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