Regional Transmission Organizations as Market Platforms III
As a follow-on to my previous two posts on regional transmission organizations (RTOs) in electricity, I was heading in a direction that relies on you, dear reader, having a foundational understanding of the investor-owned utilities (IOUs) that are the transmission owners (TOs) in RTOs. Many of you do, but lots don’t, especially tech folks who are somewhat new to electricity and are wondering why the heck it takes so long to get stuff built and why this industry is so freakin’ complicated. So today I’m diverting slightly to offer some background on monopoly regulation and the really complicated incentives that TOs face in operational and investment decision-making over their monopoly infrastructure in a context intended to foster competition in wholesale power markets. I rely heavily on Ari Peskoe’s 2023 Energy Law Journal article “Replacing the Utility Transmission Syndicate’s Control” (published version) (SSRN preprint), and if you want to read more deeply on this topic and consider the evidence to support these analyses, Ari’s paper is great. At one level you can read this whole post as a teaser to go read his paper.