Volume 100 -- Issue 5 Georgetown Law Journal

It’s Electric, but FERC’s Cost–Causation Boogie-Woogie Fails To Justify Socialized Costs for Renewable Transmission

In the United States, electricity in the home is commonplace. We flip a light switch and expect the accompanying light bulbs to brighten the room. We know the electricity needed to power our homes comes from power lines outside of our homes, which carry greater and greater capacity until they reach a distant power plant. To power our homes, we pay our electric bill. Paying our electric bill permits us to access the power generated at that distant plant through the web of electricity transmission lines, one of which terminates at our home.

Consumers’ conceptions of their electric bill—namely, that they are paying for the power they benefit from—essentially tracks the relevant legal underpinnings of electricity law. The consumer pays for the essentials: the cost of power generation, transmission lines needed to connect that new power to the grid, and grid maintenance.

When a new plant is necessary, the market decides what type of plant is built. The advent of renewable energy has brought a twist to this status quo. Renewable energy is not cost competitive with fossil-fuel power without state or federal subsidies. Consumers in states that have chosen to promote renewable energy may end up supporting renewable-energy development through their state tax dollars—and, perhaps unexpectedly, through their electric bills as well. This distribution of cost results because the cost of the transmission needed to connect to a renewable-power facility can be shared among ratepayers who “benefit” from that power. These costs are not insubstantial. Electricity lines cost millions of dollars per mile. With this amount of money at stake, consum- ers deserve transparent and balanced mechanisms to ensure they truly benefit from what they are paying for.

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