Wednesday, August 27, 2008

Interstate protectionism strangles wind power

The NYT has an article about a large impediment to more widespread wind power adoption: an outmoded and overloaded transmission system. Energy transmission, like just about every other step in the energy chain, is a highly regulated industry in the US, with state governments taking the lead in deciding how the transmission systems should work. Surprise surprise, the states act in irrational ways, and essentially enact protectionist policies, aimed at keeping energy within the state. One consequence of this is that the infrastructure needed to get wind power from producer (the Great Plains region, and especially the Dakotas) to consumer (the densely-populated coasts) isn't getting built:

The cost would be high, $60 billion or more, but in theory could be spread across many years and tens of millions of electrical customers. However, in most states, rules used by public service commissions to evaluate transmission investments discourage multistate projects of this sort. In some states with low electric rates, elected officials fear that new lines will simply export their cheap power and drive rates up.

The problem of interstate protectionism became so bad that Congress stepped in, but with the inevitable backlash:

In a 2005 energy law, Congress gave the Energy Department the authority to step in to approve transmission if states refused to act. The department designated two areas, one in the Middle Atlantic States and one in the Southwest, as national priorities where it might do so; 14 United States senators then signed a letter saying the department was being too aggressive.

I can't find anything about the letter online, but I'd be curious to see how many of those 14 senators are from Great Plains states.

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