Page 528 Legal Pathways to Deep Decarbonization in the United States
fossil fuel plants (coal, oil, natural gas) made up approxi-
mately 63% of total U.S. generation; nuclear energy pro-
vided 20%; hydropower was 7.4%; and wind, solar, and
geothermal energy was 8% of the tota l.3
e high-voltage transmission system ca rries this
energy from power plants to electric substations near load
centers (i.e., population or industrial centers) where the
voltage is “stepped down” so it can be transferred to the
more numerous low-voltage d istribution l ines that sup-
ply power to homes, businesses, and industrial facilities.
e vast majority of high-voltage transmission lines a re
alternating current (AC)—facilitating easy voltage conver-
sion—although some are direct current (DC), which has
higher per mile eciency and the ability to transfer power
between the three U.S. electric interconnections.4
Large investor-owned utilities, along with municipal
utilities, rural electric cooperatives, and federal power
authorities (such as Tennessee Va lley Authority and Bonn-
eville Power Administration), often own and manage both
electric generation facilities (i.e., power plants) and trans-
mission and d istribution f acilities.5 Investor-owned ut ili-
ties, also known a s “electric utilities,” are regulated by state
public utility commissions (PUCs) with regard to price and
other aspects of service in exchange for receiving a state-
granted monopoly to provide electricity service within a
given city or other geographic footprint. In recent years,
however, other private companies known as “independent
power producers” have begun to own and manage a sig-
nicant percentage of generation plants. Unlike electric
utilities, independent power producers do not have retail
customers, but simply produce power for resale. Likewise,
“independent transmission companies” and “merchant
transmission companies” have begun to pa rticipate in
markets to provide long-distance transmission service to
electricit y generators and dist ributors.6
3. U.S. Energy Info. Admin., Frequently Asked Questions—What Is U.S.
Electricity Generation by Energy Source?, https://www.eia.gov/tools/faqs/faq.
php?id=427&t=3 (last updated Oct.29, 2018).
4. e U.S. electric grid consists of three interconnections—or power net-
works—that operate independently from each other with limited transfer of
power between the interconnections. ese interconnections are the Eastern
Interconnection, the Western Interconnection, and the Electric Reliability
Council of Texas (ERCOT), which covers most of the state of Texas. Within
each interconnection, power ows freely and “helps maintain the reliability
of the power system by providing multiple routes for power to ow and by
allowing generators to supply electricity to many load centers. is redun-
dancy helps prevent transmission line or power plant failures from causing
interruptions in service.” See Sara Ho, U.S. Electric System Is Made Up of
Interconnections and Balancing Authorities, U.S. E I. A., July
20, 2016, https://www.eia.gov/todayinenergy/detail.php?id=27152.
5. With regard to electricity generation, investor-owned utilities provide 38.7%
of total U.S. generation, non-utility generators provide nearly 39.9%, publicly
owned (i.e., municipal) utilities 10%, federal power agencies 6.4%, and
electric cooperatives 5%. See A P P A’, 2015-2016
A D S R 28, available at http://www.
6. Merchant transmission companies do not own generation assets and do not
sell electricity to retail customers. Instead, they are simply in business to build
and operate the transmission lines and obtain revenue solely through the
contracts they make with generators and purchasers of energy through the lines.
Managing the reliability and security of the electric
grid is a herculean task. At the present time, energy stor-
age options for electricity are limited, which means that
there must be enough, but not too much, electricity ow-
ing through the grid at every moment, maintained at an
appropriate voltage, that can be dispatched to customers
on demand. If these conditions are not met, blackouts or
brownouts can occur and the grid does not serve its func-
tion of providing safe and reliable electricity.7
Following the Energy Policy Act of 2005 (EPAct 2005),
the Federal Energy Regu latory Commission (FERC)8
designated the nonprot North American Electric Reli-
ability Corporation (NERC) as the entity responsible
for overseeing grid reliability and security for the United
States.9 NERC establishes minimum standards for oper-
ating the bulk transmission system, sets contingencies
that grid owners/operators must meet to ensure system
reliability, and otherwise engages in planning and moni-
toring activities.10 NERC delegates many of its reliability
responsibilities to “regional entities” (REs) that propose
reliability standards to NERC and, ultimately, to FERC
for approval.11 ese reliability standa rds consist of rules
governing power plant operators and transmission line
operators designed to protect infrastructure, ma intain
adequate power supply, and prevent cyber attacks a nd
other secu rity breaches.12 FERC and NERC have enforce-
Because these contracts are for the transmission of electric energy in interstate
commerce, the Federal Energy Regulatory Commission (FERC) regulates
the contract rates under the Federal Power Act. Independent transmission
companies generally operate the same way except that in some states, they
are able to obtain status as a transmission-only public utility and obtain rate
recovery from retail customers under state law. See, e.g., Alexandra B. Klass
& Jim Rossi, Revitalizing Dormant Commerce Clause Review for Interstate
Coordination, 100 M. L. R. 129, 150 (2015); Alexandra B. Klass, e
Electric Grid at a Crossroads: A Regional Approach to Siting Transmission Lines,
48 U.C. D L. R. 1895, 1925-26 & n.160 (2015).
7. Yuri V. M ., P N N L,
A M B A C
H P V G 1.1 (2010) (PNNL-19229),
available at http://www.pnl.gov/main/publications/external/technical_re-
8. FERC has congressional authority under the Federal Power Act to regulate a
wide range of energy resources and industries, including wholesale electric-
ity sales and interstate transmission of electricity. FERC is an independent
regulatory agency with ve commissioners appointed by the president with
the advice and consent of the U.S. Senate. Each commissioner serves a ve-
year term, and no more than three commissioners may belong to the same
political party. See Fed. Energy Reg. Comm’n, What FERC Does, http://www.
ferc.gov/about/ferc-does.asp (last updated June 19, 2018); Fed. Energy Reg.
Comm’n, Commission Members, http://www.ferc.gov/about/com-mem.asp
(last updated Feb. 2, 2018).
9. NERC, H NERC (2013), http://www.nerc.com/AboutNERC/
10. NERC, About NERC, http://www.nerc.com/AboutNERC/Pages/default.
aspx (last visited June 22, 2018).
11. NERC, Key Players, http://www.nerc.com/AboutNERC/keyplayers/Pages/
default.aspx (last visited June 22, 2018); Hari M. Osofsky & Hannah J.
Wiseman, Hybrid Energy Governance, 2014 U. I. L. R. 1, 36, 41-44
12. NERC, United States Mandatory Standards Subject to Enforcement,
aspx?jurisdiction=United%20States (last visited June 22, 2018).