"Shorting the Grid" Shows Us Everything Wrong with Grid and the Dangers of Regionalization

Meredith Angwin is a reader of this substack and when I wrote a post critical of the Republican governor of Vermont where she and her husband reside, she politely and rightly chastised me for ignoring what the poor fellow has to confront politically in a state with so many New Yorkers. She also challenged me to read her book. It’s titled “Shorting the Grid: The Hidden Fragility of Our Electric Grid,” so I immediately ordered it and am so glad I did.

It’s a wonderful book for anyone who wants to understand how the grid really works and doesn’t. What immediately struck me about it is how pleasantly it’s written, which shouldn’t be surprising from someone who has her own substack called “The Electric Grandma.” Grandmas are always pleasant in my experience. Mine always took time to answer my questions, explain things in ways I could grasp and never tried to impress me with their own deep knowledge. It all came gracefully over all the years I knew both.

Such is Meredith Angwin’s writing, which offers a sharp contrast from most of what I read on energy, planning and the law. Nearly everyone writes in absurdly long phrases, paragraphs and chapters stuffed with material meant to impress rather than inform. None of that is helpful in our information age where we are bombarded with messaging and barely have time to do more than grab the key points. She, by contrast, writes plainly in short paragraphs and chapters that make you want to continue reading because you're quickly getting the points without the fluff.

The points in the case of "Shorting the Grid" are many, including the following major ones, as I see it:

• Regional Transmission Organizations (RTOs) are giving us an increasingly fragile grid because no one is truly accountable for anything under such systems. Regionalization invariably reduces accountability.

• The Federal Energy Regulatory Commission (FERC) is a necessary part of the equation and can help a little with respect to accountability. Like all governments, though, it is bizarrely obsessed with fairness to the point it won’t allow regulations requiring gas-fueled power plants to store oil on-site as a backup when gas can’t be delivered in time. That would favor one fuel over another, you see.

• The RTO system is sold by FERC and its advocates as one that creates markets in electricity, with the implied theory this will lower costs. There is evidence this is not the case, but the bigger point is that while RTOs hold ever more auctions, the markets are phony and anything but free.

• Electricity prices have ever less to do with real values, as determined by free markets, and ever more to do with subsidies creating by pricing floors, direct payments, renewables mandates and the like. The entire system is akin to a Rube Goldberg contraption with multiple additional attachments to increase the complexity and the possible outcomes.

• Grid organizations, because the emphasis in RTOs is on auctions and adjustments, are only peripherally addressing reliability and doing it in the wrong way by trying to accommodate renewables while also protecting baseload electricity production. Renewables have, in fact, distorted every little thing and the costs imposed on reliability have made a mockery of academic attempts to measure levelized costs.

• Nuclear energy, with high capital costs and low operating costs, is given short shrift by RTOs.

• There are too many parties interjecting themselves into RTO politics, with committees upon committees, entity upon entity and rules upon rules, but there is very little transparency and no one represents consumers (ratepayers) in any significant way. It's all government by experts, which is the worst form of government of all.

There is much, much more in Meredith’s book, and I strongly encourage everyone to buy a copy and read it. I also have a suggestion for her next book. She is a big advocate of nuclear. I like it, too, but it is damned near impossible to build new nuclear plants. That’s due to two huge problems. The first is extraordinarily high capital costs as a consequence of overregulation. The second is ever more prevalent NIMBYism as energy demanding areas become more and more urbanized.

Cities are bubbles and city folks have little true understanding of energy production but are always populated by those who suppose they’re the smartest bears around. They are quickly sold on naive renewables schemes because that means producing the energy somewhere else. They want it, but also want no part in producing it or delivering it. Nuclear power plants, gas-powered plants and pipelines are all being fought tooth and nail by people with money to fight. They are the ultimate example of the tragedy of the commons, which Meredith also addresses. They want a grid to draw energy from, but no responsibility for accepting production or delivery.

Yet, pipelines and power plants must happen and regionalization doesn't make it easier but, rather, much harder. Regionalization only shifts responsibility to a nowhere man in a nowhere land. A state such as Vermont can do all sorts of crazy climate virtually signaling and face no direct consequences as its responsibilities for energy reliability have been shifted to a RTO, which can’t do anything to stop Vermont. The only real solution is to eliminate RTOs as an unnecessary and counter-productive extra layer of management (too many chiefs) and push responsibility back onto the state Public Utility Commissions, where NIMBYism must be confronted.

PUCs don’t typically do auctions or create pretend markets. They’re closer to the people and the politics and are obligated to try to get things right and reliable. The buck stops with them, after all, whereas in RTOs it never lands anywhere. You say you don't like gas; ok, you’ll have to accept nuclear and vice versa because reliability is sacrosanct. If you do neither you'll suffer the consequences, and then you’ll make a choice. And, if you want renewables, be aware you'll pay much more in duplicative systems or have no reliability whatsoever. Call it tough energy love. Regionalization is free love in terms of accountability, but always end in messy divorces.

Buy Meredith's book and see if you agree!

#Grid #MeredithAngwin #FERC #Renewables #Nuclear #Energy #RTOs #Electricity #Fragility #ISOs