Lightning in a Bottleneck: How Regulatory Gridlock Is Choking America’s Energy Boom
America’s power grid has plenty of new customers and no shortage of new ideas. What it lacks is a regulatory system capable of connecting the two.
Artificial intelligence data centers, advanced manufacturing, and cryptocurrency operations are driving electricity demand sharply higher. Yet the rules for connecting new power sources and major users remain slow, fragmented, and rigid. The grid’s emerging bottleneck is therefore less a failure of technology than of institutions.
The Federal Energy Regulatory Commission (FERC) has begun to confront that mismatch. It is pursuing two major reform tracks: a series of Section 206 “show cause” orders focused on connecting large electricity users to the grid, and an overhaul of the Natural Gas Blanket Certificate program aimed at speeding infrastructure approvals.
That turn toward market realities is welcome. But success will depend on whether FERC resists the temptation to replace one thicket of rules with another. Its final policies should instead draw on basic law & economics principles: reduce transaction costs, clarify property rights, and avoid overconfident central planning.
Reform will also require addressing the regulatory friction between FERC and the Nuclear Regulatory Commission (NRC), which can leave even promising projects trapped between agencies.