Almost seems like you should make that into a post!

grist.org

and since I actually bought the book (makes a great gift), please elaborate on federalizing the grid.  Seems to me it should be owned by the Feds?

...if I read your book correctly, not enough investment is being put into the grid -- wouldn't Federal ownership make it easier to put enough money into it?  At least everybody would know what shape it was in (if their was transparency) and could argue over the best way to maintain it.

In France, one of the reasons the nuclear industry works (note: I'm generally anti-nuke) is because the government owns the whole industry and can impose standards and construction specifications on all its plants, and it owns the grid.  There are advantages to Federal ownership -- you might conclude after weighting the advantages of Federal vs. private that private is still better, but Federal could be better, at least for the grid.  And yeah, obviously Federal oversight of the grid is a necessity.

I agree with just about everything you say, but offer a few redirections re: "federalizing the grid".  There is an inherent conflict between the benefits of markets (and the competitive pursuit of profits) and the benefits of gov't oversight in our electric industry.  Namely, we get the worst of both: big bureaucracies in our electric utilities, but with a (noncompetitive) profit incentive that acts as both a tax on service and a non-incentive to deliver more value/lower cost energy.

This is a 100-year old regulatory problem, but is fixable for certain parts of the grid.  Competition clearly works on the upstream generation side (although we have yet to show the appetite either for letting bankrupt generators fail: see PG&E or for providing the kind of anti-trust enforcement critical for a truly competitive market: see Enron.  But we can do these, and ought to.)  Certain elements of the transmission system are also amenable to competition, inasmuch as T can compete with G - although I accept your point that this needs to be accompanied by the usual gov't oversight of siting, etc.  Most importantly, we have massive opportunities for competition at the end of the wire, where local generation can bypass wires, use renewables & other opportunity fuels and recover waste heat.  Massive opportunities for higher efficiency and lower cost power there, which to date is largely blocked from market access.

This leaves the middle of the grid (distribution).  In many cases, it is too customer-specific to really be competitive, but critical for a functional grid.  This part of the grid is quite amenable to "federalization" as you put it (although one could make the case that the regulatory agency may be more likely at the state level).  This is like the highway system though - we need to have it, people need to have access to it, and we need rules about how it is used.  But we gain NOTHING from granting a profit to the monopoly operator.  I particularly like some of the suggestions from the Galvin institute on this piece, who has suggested that we regulate the D system like a police force: make sure they get enough money to cover their costs, but don't give them the billing/metering function.  If the police were responsible for paying their budget with speeding tickets, we'd see really goofy behavior.  This is exactly what we see from distribution utilities, who are responsible for paying their costs with monthly bills.  They've done a great job of running the grid, and a horrific job of driving up efficiency.  This is fixable.

Interested to hear whether you think this is consistent with your idea.

Lots of good points are being made in the previous threads, and I can't necessarily disagree with any of them.  However, I am wary of the idea of placing the energy grid under federal control, because we are facing an urgent problem for which the solution is not obvious.

I would observe that federal policy is answerable to a much larger body of constituents, and is also a much more attractive target for lobbying by interested parties seeking a marketplace advantage through legislation.  (While it costs more to lobby the feds than to lobby a state, it costs less to lobby the feds than to lobby all 50 states.)

As a consequence, federal regulation is often slower to change, and less responsive to the needs of individual constituents than to the demands of industry lobbyists.

If we could assume enlightened federal leadership, then the federalizing proposals would make perfect sense.  However, given the demonstrated quality of that leadership vs. the leadership of the states, especially on climate issues, I think we might be better of working this problem at the state level.  The other advantage of attacking the problem at the state level is that it provides an opportunity to try different things in different places, to figure out what works well and what doesn't.

Completely agree.  Keep in mind though that a for-profit monopoly is essentially an arm of the state.  When I agree with K&J, it is not to suggest that we add more gov't oversight to the power sector, but rather than we simply acknowledge the facts on the ground: the profit incentive of regulated monopolies creates no economic benefit, even though the presence of an electric utility creates clear societal benefit in the availability of electricity.  

For those sectors of the electric system that are amenable to competitive pressures, let's let the competitors in, get the monopoly protection out (but make sure to get the anti-trust dogs on the watch to avoid another Enron), and get out of the way.  And if we find through that exercise that some sectors of the grid - like the distribution grid - are simply not amenable to competition, then let's get rid of the for-profit utility that is putting a tax on our electricity, since that tax doesn't add any value.  

This transformation is a federalization (or state-ization) only in the legal sense that those businesses now have shareholders and are publicly traded, so there is a pretty significant regulatory/financial transaction that would have to accompany this change.  But operationally, it's simply the removal of an inefficient tax (and more importantly, the removal of shareholders who's interests are in direct conflict with utility customers).  It is really simply a conversion from investor-owned utilities to coops... but only for that rather small portion of the system that cannot benefit from competition.

The investor-owned utility model is a mongrel of private and public ownership that makes no sense that I can see.  They tend to be schizophrenic, and small wonder -- they're being pulled in opposite directions by the private mandate (profit) and their public mandate (service).  Municipal utility districts, Co-ops and other forms of public ownership of distributions systems make far more sense.  So I think we're on the same page.

However, I think there's a very real difference between an organization that is owned/controlled by a city government, vs. a state government, vs. the federal government, for the reasons I outlined above.  As a general rule, I think public services should be provided by the smallest/most-local level of government that is able to do so effectively.  Scale is absolutely critical.