With Joe Hack, RMI Transmission Fellow
June 2025
Studies suggest that well-planned, efficiently built transmission connecting balancing authorities is generally net beneficial in terms of cost savings, reliability and other public benefits. However, existing models for planning and financing new transmission in the US, whether through regulated cost recovery processes or merchant models, can pose barriers to these projects.
A hybrid merchant-regulated financing mechanism known as cap and floor can derisk interconnector projects while incentivizing efficient asset use. Implemented in 2014 between Great Britain and its neighbors, cap and floor has since produced several operational interconnectors between European countries.
Cap and floor financing could mitigate problems associated with cost allocation and information asymmetry in the US by aligning risks and rewards to incentivize efficient infrastructure build and operation. ... (read more).
October 2021
Independently operated electricity markets can reduce wholesale electricity costs by improving efficiency and cost-effectively managing variable renewable generation. Skeptics have questioned these benefits, asserting a lack of unbiased evidence. However, they have not addressed the academic studies showing that markets have produced savings, but that some utilities have offset the savings by folding other costs into their customers’ retail rates.
This highlights two separate questions: (1) whether utilities should participate in organized wholesale electricity markets, even acknowledging that the markets can be improved; and (2) how to structure utility incentives to ensure they cost-effectively serve customers. Conflating these questions may lead us to miss the benefits of such markets as well as the opportunity to focus on the real problems ... (read more here and at R Street).
By Katie Waters, ReGrid Intern
June 2021
The federal government is projected to invest $100 billion in the next four years on power infrastructure. In building a leaner, cleaner electricity system, we must not only use more efficient technologies that result in lower energy loss, but also consider less harmful alternatives to the potent greenhouse gases commonly used in large-scale infrastructure today ... (read more).
October 2020
Today’s technologies could empower electricity customers to cut harmful emissions and contribute to a reliable grid while reducing bills—with a few taps on a smartphone. Some barriers to this vision are being eliminated as the agency overseeing the U.S. electricity grid recently finalized a framework that will help modernize a regulatory system built around last century’s power plants. Meanwhile, recent outages in California from a perfect storm of extreme conditions highlight the importance of these reforms and needed complementary actions ... (read more).