A series on American electricity institutions
August 2026
Americans are paying more for electricity even after the cost of producing new electricity has fallen dramatically.
That is an institutional failure.
Households pay higher bills and factories wait years for power, while more generating capacity waits in line than currently operates. The bottleneck has moved from the power plant to the grid, where physical constraints are made expensive and slow to manage by rules every reform left standing.
Those rules can be changed, and states can start without Congress.
Most queued capacity never reaches operation.
The argument
Before data centers were even a thing, regulators set up utilities with monopolies and financial objectives that remain to this day.
PURPA in 1978, Order 888 in 1996, Order 1000, Order 2222, Order 2023: each changed the process. None changed what the utility earns, or who controls grid access.
Access is administered by a party paid to build the alternative. In what world do those incentives make sense? In decades past when there was no alternative. The technology has changed.
Build more, keep the gate, socialize the cost. That has been the program. Today's electric bills are its record. Why would we do the same thing again, expecting a different outcome?
Pay the utility for outcomes instead of capital; move the access decision to a party without a stake in the answer. Everything here follows from those two moves. The two moves, diagrammed →
Connections in months under published rules; real bill growth below matched peers; reliability financed by the loads that need it; new capacity built faster and cheaper with private capital. The scorecard → The test, What would prove us wrong →
The ask
Governors call for a performance-regulation docket. Commissioners open it and publish grid data. Legislators authorize it. FERC makes connect-and-manage the default where technically feasible.
Transition costs include regulatory staff, data systems, metering, and IT and should be judged against the capital and operating spending the program avoids. Scenario aggregation puts that comparison near ten to one.
Lower long-run system cost; faster connections; better use of existing network capacity; and avoided investment where flexible load can use existing headroom.
The diagnosis
The institutions governing electricity were built for yesterday's technology.
The technology changed; the payoff and the gate did not.
The proposal
Two diagrams illustrate before and after the reforms.
Diagram 1
Cost-of-service pays a return on deployed capital, so capital is what gets deployed. No bad faith required at any step.
Today: cost-of-service
Reformed: performance-based
Diagram 2
Power now flows both ways, yet the wires owner still decides who connects, holds the data, and sells the competing product.
Today: one way, gatekept
Proposed: two way, rules-based
The separated operator shown in the proposed column is the preferred mechanism, not the only one that satisfies it. The menu of alternatives, with our stance on each, follows below.
The consumer case
The rules that survived every reform sit between abundant electricity generation and your rising electric bill's three key cost drivers. Each principle here aims at one of them.
What it costs to generate the power. Utility-scale solar paired with battery storage, which can serve the evening peak, came in at $87 per MWh unsubsidized nationally in 2024 and $71 in ERCOT, against $144 to $276 for a gas peaker.
Cheap generation is not the same thing as cheap delivered electricity. But it cannot compete if it cannot connect, and the median project waits more than five years for an answer. Faster connection comes from published technical rules where the system can safely accommodate a resource, with the remaining constraints visible and priced.
Poles, wires, substations, and transmission. This is the fastest-growing part of many bills, and the part where the utility earns a return on whatever it builds.
In Massachusetts the delivery charge alone rose 80 percent in a decade, and 36 percent after inflation, while the electricity itself got cheaper.
Capacity charges that pay for supply to be there on the worst day. In PJM these rose from $2.2 billion to $16.4 billion a year, spread across every household in 13 states and DC. Much of the growth is for demand that households did not create. Make new large loads fund the incremental reliability and network capability their addition requires.
Eight forces move the bill; this program directly targets three. These pressures are all real; the argument here is that institutional reform determines how expensive the response becomes.
The three forces targeted here compound: capital earns for forty years, capacity charges recur annually, and delay multiplies both. A growing share of system cost is now set by network constraints and the institutions that manage them.
Your role
Each group has a different reason and a different first step, and none of the first steps requires agreeing with everything else on this page.
Governor
Do this first. Call publicly for a commission proceeding and commit the administration to publishing the data and consumer outcomes that result. Where commissions are elected, make the case to voters.
No appropriation, no federal permission; Hawaii and Britain already run it.
Commissioner
Do this first. Open a total-expenditure docket with peer benchmarking, and order machine-readable hosting-capacity maps.
The design is documented in Hawaii Docket 2018-0088 and Ofgem's framework.
Legislator
Do this first. Sponsor enabling legislation: performance regulation, a statutory right to connect, and a standard value-stack tariff.
Every element operates somewhere already; this authorizes, it does not spend.
Utility executive
Do this first. File a multi-year plan under a total-expenditure framework, volunteer a feeder or planning area for a flexibility pilot, and support Principle 1 (totex, the preferred mechanism) before the rest are decided.
British networks kept investment-grade credit and out-earned their allowances.
Consumer advocate
Do this first. Intervene for hedged default products, transition bill protection, and a large-load tariff that stops socializing capacity cost. Demand the analytical capacity to police it: funded intervention, utility data access, and standardized cost-benefit and incidence templates.
Today's flat rate already moves money from those who cannot shift usage to those who can.
Large-load buyer
Do this first. Offer verified curtailability in the top 50 to 100 hours in exchange for fast-track connection on standardized, nondiscriminatory terms to any qualifying large load.
Google signed this structure with I&M and TVA in 2025; about a gigawatt is contracted.
Market operator
Do this first. Publish congestion, curtailment, and queue-performance data in machine-readable form, and pilot a connect-and-manage pathway with published operating limits for one class of resources.
The operators moving first are writing the template the others will eventually be handed.
Investor or developer
Do this first. Back obligation-based resource adequacy in RTO stakeholder processes and the value-stack tariff in the states, and commit your projects to standardized operating limits. The rule-based access you are asking for only exists if resources accept the rules.
Long-tenor contracts with creditworthy counterparties are what project finance is built on.
Coalition
The coalition is broader than the queue: households, businesses, energy producers and energy consumers large and small. Each has its own reason to change how access, risk, and cost are allocated today.
Wires planners, generation affiliates, shareholders, municipalities, and co-ops are differently exposed, and several gain from mechanisms the others fight. Don't take the utility's business away; change what it gets paid to be good at. The two resistant rows also differ: incumbent generators face reform at FERC while investor-owned utilities face a business-model change and reforms at the state commission and legislature.
Old rules
Each rule was correct for its era and survived every reform since. None of what follows requires anyone to have acted in bad faith. It requires only that people follow the incentives they were given.
A firm earning a return on invested capital prefers capital. Facing an overloaded feeder, it can build a $40 million substation and earn on it for forty years, or contract for the capacity the feeder actually needs and earn nothing. Whether the required service can be procured for less than the full infrastructure solution is a question the utility today has no financial reason to ask. Distribution spending rose about 160 percent over two decades while congestion stayed high, and distribution is now the industry's largest capital category and its least examined.
The wires owner runs the interconnection queue, holds the hosting-capacity data access decisions rest on, and earns a return on the capital alternative to whatever is asking to connect: the referee has a position in the game. No corruption is required; the conflict works through study assumptions, data held as confidential, and timelines nobody is penalized for missing. The country adjudicated this once: at transmission, federal regulators found self-administered access discriminatory and ordered it opened, with functional separation and public capacity postings. No equivalent order governs distribution. This rule keeps the other four in place.
Distributed solar, batteries, and flexible demand can be built in months and sited where constraints bind: the combination the grid most needs and compensates worst. Their revenue comes from tariffs a commission can revise, and it is revised: California cut export compensation roughly 75 percent in one proceeding, and New York's value stack has needed continuous adders since 2017. A ten-year asset earning under a three-year rule is not a financing problem the developer can solve.
Queue length alone proves nothing; entry is cheap. What indicates a process that no longer scales is the combination: withdrawal above 70 percent, median durations past five years, restudies triggered by every departure, completion at 13 percent. Order 2023 moved the bulk system toward clusters and readiness gates, yet substantial project-specific study and discretionary cost allocation remain. Texas is the most useful real-world comparison: study local reliability, connect quickly, manage congestion through the market afterward.
Capacity constructs treat adequacy as a short-dated commodity purchase: defensible for retaining an existing fleet, and a failure in a growth market, because a commodity purchase cannot finance a thirty-year asset: the new plant needs capital recovery from a sequence of auctions nobody can see past. The institutions are shortening visibility rather than reconsidering: ISO New England is moving to prompt seasonal auctions, New York procures monthly, and PJM has cleared at its administrative cap in four consecutive auctions and fell 6,623 MW short of its reliability requirement in December 2025. Texas has no capacity construct at all.
The five principles
What this is not. No nationalization, no forced retail choice, no elimination of vertical integration where states prefer it, no technology mandates or subsidies, and no relaxed reliability standards.
The objective. Complete the market where competition can work; strengthen regulation where monopoly remains.
A utility should earn on outcomes delivered, not on capital deployed.
Cost-of-service pays a return on approved capital and passes most operating costs through at zero margin, so a wires solution and a service solution are never compared on one financial footing. The principle sets no revenue level; it changes what revenue attaches to.
The party that owns the wires should not decide who may connect to them.
The wires owner today runs the queue, holds the hosting data, and profits from the capital alternative to whatever is asking to connect: a referee with a stake in the score. Engineering duties stay with the engineer; what moves is the access decision.
Where and when a resource operates should affect what it earns.
Retail prices carry almost no information about when or where the grid is strained, so flexibility that could relieve a constraint has nothing to respond to. The signal must be real; the revenue can stay hedged, contracted, or administered.
Access should follow published rules, not case-by-case permission.
Serial, project-specific study made sense when a handful of large plants connected each year; it cannot clear two thousand gigawatts of applicants. Published limits stay engineering-grade, and constrained connection replaces exclusion, inside limits the operator can enforce.
Incremental system costs should sit with those who create them.
One new campus can require as much peak capacity as a small city, while the bill for standing that capacity up spreads across every household in the region. Costs should be reasonably attributed, and socialized transparently where necessary.
The sequence matters. Principle 1 comes first because it changes the utility’s payoff before anything changes what the utility controls. Meanwhile, Principle 4 can bank early wins. Reforms that shift control before incentives change get fought harder and implemented worse.
Reading the menus
The mechanisms are options for each jurisdiction which, when adopted, become that jurisdiction's implementation.
A utility should earn on outcomes delivered, not on capital deployed.
What we prefer. Total-expenditure regulation: removes the bias.
Total-expenditure (totex) revenue caps remove the incentive for building over buying, output incentives pay for interconnection speed and hosting capacity, and yardstick benchmarks set each allowance against peers.
What changes. Today the utility proposes a substation and earns on it for forty years. Under these reforms it tests whether the required service can be procured for less, and keeps a share of the difference. Totex changes the economics of build-versus-buy; benchmarking and independent review determine whether it works.
The party that owns the wires should not decide who may connect to them.
What we prefer. An independent operator where the conflict is material; a ringfenced affiliate as the transition.
Functional separation and independent governance first; a fully independent Distribution System Operator only where conflicts stay material. The access administrator runs the queue, the data, the envelopes, and flexibility procurement. The wires company keeps building, maintaining, and restoring, and keeps being paid for it.
What changes. Today the wires owner decides who connects and how long it takes. Under these reforms an independent administrator runs the queue and the data; the wires company stays builder-of-record but no longer writes the access rules.
Where and when a resource operates should affect what it earns.
What we prefer. A maturity ladder (data, then standing offers, then rates) rather than a leap to distribution markets.
Three instruments carry the signal: dynamic default rates say when, posted locational offers say where, operating envelopes say how much, in real time. Default is not mandatory: hedged flat products stay freely available, with transition protection and low-income rates. The signal stays live and volatile; the revenue does not have to.
What changes. Today a battery earns the same on a strained feeder as an empty one, and a household pays the same at 2am as 6pm. Under these reforms both get paid for when and where they help, with automation doing the response and a hedged product always on offer.
Access should follow published rules, not case-by-case permission.
What we prefer. Standardized pathways against published limits, connect-and-manage where operating rules support it, and a reconductor-first showing on the portfolio.
Small resources connect through a standardized pathway against published technical limits. Bulk generation and large loads get a connect-and-manage option: defined study clocks, published curtailment rules, transparent congestion data. Reconductor-first analysis comes before greenfield transmission, and fast-track access rewards loads that accept verifiable curtailment.
What changes. Today a small project waits years for a study it may fail. Under these reforms it connects in days if it accepts a limit the operator can adjust, and a large one gets a firm answer with a deadline attached.
Incremental system costs should sit with those who create them.
What we prefer. The large-load tariff first because it moves fastest, obligations phased behind it with the auction as residual backstop.
New large loads demonstrate forward physical or contracted coverage of the incremental reliability their addition requires, under standardized products and transparent accreditation. The centralized mechanism becomes a residual backstop as obligations mature; nothing applies retroactively. The objective is to make incremental cost explicit, financeable, and nondiscriminatory.
What changes. Today the cost of getting ready for a new data center is spread across every household in the region. Under these reforms that reliability is under contract years before the load arrives.
Implementation
Build on institutions that already perform the function. Create new ones where none credibly can. These principles should not produce identical markets across states.
How to choose from the menu: five questions
Question 1 · What is missing, and where
The left dots are the second settlement; the right dots are why this program exists. One gap spans a full row: no US utility, at either voltage, is yet paid on total expenditure.
Question 2 · The institutions you already have
For more details on different jurisdictions, see and .
The adoption model
Market-side principles (3, 4, 5)
Monopoly-side principles (1, 2)
Climb as far as the evidence justifies, using the escalation criteria.
A long-term contract, a merchant market, a tolling agreement, a flexibility tariff, and a capacity obligation look very different legally. Each can perform the same underlying function: making a revenue stream predictable enough to finance, by moving risk to a party better able to carry it. The question is not which mechanism every jurisdiction should adopt. It is which mechanism performs the required function most efficiently in this market.
The worked example
One worked example: the preferred mechanism under each principle. A jurisdiction choosing alternatives from the menus can keep the order and swap the content.
The first 100 days
Each improves information, accountability, and optionality. A commission can begin immediately, and each action makes the next easier to order.
An illustrative sequence, on two tracks
State trackNo federal permission required
Federal trackFERC and the RTOs
Nothing on the state track waits on the federal track. A commission that opens a docket in 2027 is not blocked by anything Washington does or fails to do.
What proves each stage worked
Managing the transition. Cleared capacity commitments pay through their delivery years and obligations phase in over three cycles. Grid data becomes a regulated asset with access rules, so the utility keeps custody and cost recovery and loses only the right to withhold. Interconnection engineers and planners move with their functions, as transmission staff moved into ISOs in the 1990s, so the separated operator is a destination for the workforce. In-flight capital plans grandfather into the total-expenditure baseline at approved values. Dynamic rates arrive with hedged flat products, transition-year bill protection, and a customer education obligation on the utility. And stranded value that survives an independent review has a tested instrument in ratepayer-backed securitization.
The scorecard
A customer should be able to know where capacity exists, connect under published rules, pay the incremental costs it causes, earn for the services it provides, and contract away the risks it does not want to hold.
Measured against these metrics:
Critique
Tests, and the results that would run against this thesis.
Empirical questions. More important is how a jurisdiction finds out: sandboxes, bounded pilots, tariffs with sunset clauses, solicitations that reveal price, published baselines, independent evaluation.
Short answers here; each links to the full version in the papers.
No. The monopoly gets regulated more tightly (revenue caps, peer benchmarks, published performance) and competition opens only where no monopoly exists. Wires stay regulated; generation has been competitive at wholesale for thirty years.
Only if designed carelessly, and today's flat rate already moves money from those who cannot shift usage to those who can. Defaults ship with hedged flat products, transition bill protection, and targeted low-income rates.
What is borrowed is a payment formula, not a culture: a revenue cap tied to measured outputs works the same in Honolulu as in Birmingham, which is why Hawaii adopted it. Every step runs on existing US authority.
True. Transformers, corridors, and crews are scarce, and no rule repeals that. The program targets the scarcity rules created, institutional permission, which is the portion reform can actually recover.
Some elements, yes, which is why Principle 1 changes what utilities earn on before anything changes what they control. Transmission open access was fought in the 1990s, imposed anyway, and is now defended by its old opponents.
The 2021 failure traced to weatherization and fuel supply, which no interconnection study prevents. Texas is evidence about connection speed (14.2 GW added against PJM's 5.6), not proof its whole market design should travel.
Yes, and that failure designed this program. Order 1000 policed conduct and left the payoff intact, so recategorization beat it. A total-expenditure allowance removes the gain from recategorizing, and a peer benchmark cannot be recategorized at all.
It moved bulk study to clusters with readiness gates: real progress the program builds on. Study reform alone does not solve network expansion, cost allocation, operating limits, or distribution-level access.
No. Each principle carries a menu with stated stances; a jurisdiction reaching the same function by another route has done the same thing. ERCOT already performs several of these functions through merchant institutions.
The principle survives and the mechanism changes. That is why they are separated, why every consequential stance carries a revisit trigger, and why the open questions are listed below.
Mostly yes: Principles 1 through 3 are state distribution matters everywhere, Principle 4 has a non-RTO federal pathway, and Principle 5's vehicle is the large-load tariff Southeastern utilities are already building inside the resource plan.
Concentrated in Principle 5, and designed against: registered published positions, standardized products, physical backing, independent verification, and telemetry-settled performance with penalties above the value of non-performance. California's crisis came from banning forward hedging; this program mandates it.
Britain has run the framework since 2013: investment-grade credit throughout, and returns the auditor criticized as too generous. The documented failure mode is utilities earning too much. Hardening and replacement are funded in full; the building-over-buying preference is not.
American transmission has run separated since 1996, and nobody proposes going back. The wires company keeps the poles, the trucks, and the storm response; what moves is the access decision, wherever the decider has a stake in the answer.
Utilization is a fine metric and an insufficient reform: a new number evaluated by an under-resourced regulator against a mis-incentivized monopoly changes nothing until the payment formula changes. That is Principle 1's argument.
Public power is evidence for this diagnosis: utilities paid no return on rate base show no capital bias, and munis can adopt these reforms fastest, by board vote. Ownership does not touch the binding constraint; a muni waits in the same queue.
Gas leads PJM's reopened queue precisely because a slow queue favors whoever can afford to wait. Rules-based access is technology-neutral and rewards whoever builds fastest: today, storage and solar-plus-storage, now nearly half of queued solar.
Already in motion · as of August 2026
Enacted is law or final order, Ordered is directed but not done, Filed is in process, Proposed is a design, Organized is a constituency. All aligned with this program.
Documents
Read any document in the page, download it on its own, or take the whole set as one file.
Download the full compendium Download the slide deck
The whole argument in two pages: the inversion, the five principles, the electric bill case, the coalition, the path.
Where the permission structure came from: the 1907 compact, the 1935 jurisdictional seam, the unbundling that stopped at the substation.
The diagnosis. Five institutional failures, the evidence dashboard, and the strongest objections answered with data.
The five principles with the mechanisms evaluated under each, what the program is worth, what it does to an electric bill, who wins and who fights, and the roadmap.
Three 2035 mornings (merchant, contracted, planned) delivering the same five functions through different institutions.
Every precedent examined: what it proves, what it does not, what does not transfer, and what to do differently. Includes a guide to which case to cite to which audience.
What to say, what to do first, and what to say when someone objects. Per-role briefings, the first 100 days, and sample docket and bill language.
Six pages for commissioners and legislative staff: the problem in one dashboard, the principles and preferred mechanisms, who must act, objections answered.
Roughly 1,100 words for a general readership, ready to place.
The dated register: orders, statutes, filings, and proposals already moving toward the principles.
The cost of new solar falling across the same years the time to connect stretched from under two to more than eight.
Presentation deck: the dashboard, the five rules, the five principles, who wins and who fights, the roadmap, the bill, 2035.
Press kit
Verified figures on the left, quotable lines on the right, and a placement-ready op-ed. For dated news pegs (orders, statutes, filings) use the momentum ledger. ·
The grid no longer suffers from scarce electricity. It suffers from scarce permission.Executive summary
The monopoly has narrowed. Wires remain a natural monopoly. Generation does not. Storage does not. Demand flexibility does not.Paper II
The question this series answers is why a nation that got very good at building cheap generation got very bad at plugging it in.Paper II
When an auction clears at a ceiling negotiated with a governor, while attracting almost no entry, it has stopped discovering prices and started administering them.Paper II
The planner is honest, the engineering analysis is competent, and the substation still gets proposed.Paper II
Complete the market where competition can work; strengthen regulation where monopoly remains.Paper III
One of the country's largest pools of prospective infrastructure is already in development or awaiting connection.Op-ed
Different institutions. Different pathways. Same principles.Paper IV
Attribution: cite the document named under each line.
Assets: the social graphic (PNG) · the slide deck.
Source discipline. OBSERVED is directly reported data; DERIVED is calculated from it; SCENARIO is model-dependent; INTERPRETATION is an analytical conclusion. The series keeps each separate.
What happens next
This is not waiting on Washington. States can begin now.
Commissioners already hold most of the authority.
Utilities know how to earn under these rules; their British counterparts have for a decade.
Consumers are paying for the delay now, on every bill.
The technology exists, capital is waiting for financeable revenue and a predictable connection, and the demand is here.
Change the payoff and the gate.
