# The Champion's Toolkit ### What to say, what to do first, and what to say when someone objects *Companion to the series "The Great Inversion."* --- ## The case in one minute Electricity became cheap to produce. Connecting it became expensive and slow. Utilities still earn a return on capital they deploy, so they keep deploying capital. Competition stalls at the interconnection queue. Bills rise. Five principles change that. Each has a menu of mechanisms evaluated and a stated preference. And states can start most of the preferred ones without Congress, without new spending, and without waiting for anyone else. --- ## Your role ### Governor **Your headline.** Lower electricity costs without a new subsidy program. **What you do first.** Call on your commission to open a performance-regulation docket, and require your utilities to publish interconnection metrics and hosting-capacity maps on a fixed schedule. Neither needs an appropriation or federal permission. In the roughly ten states that elect their commissioners, including Georgia, Arizona, Louisiana, and Oklahoma, this is a public case to make rather than an order to give, which changes the tactics and not the substance. **Why it is safe.** Hawaii's commission has regulated utilities on performance since 2020. Britain has since 2013, and its networks kept investment-grade credit while earning roughly 9 percent real on equity against a 5 to 6 percent national average, which is the opposite of the underinvestment risk critics raise. You are adapting a mechanism that already operates in the United States and abroad. **What you can announce.** A rate-relief agenda that assigns the costs of large new loads to those loads, publishes what utilities charge and why, and pays them for outcomes instead of for spending. ### Public utility commissioner **Your headline.** Modernize the incentive, and get better data while doing it. **What you do first.** Open a docket on total-expenditure regulation with peer benchmarking, and order machine-readable hosting-capacity and planning data as a condition of the next rate proceeding. **Why it is safe.** The mechanism is documented in Hawaii Docket 2018-0088 and in Ofgem's published RIIO framework, including the parts that went wrong and were recalibrated. You can adopt the design with the correction already in hand. **What it does for your docket load.** Multi-year revenue caps with formula updates reduce the frequency and stakes of contested rate cases. The tradeoff is a higher analytic burden at the front end, which is an argument for funded intervenors and shared benchmarking data across states. ### Legislator **Your headline.** No federal spending, no federal permission required. **What you do first.** Sponsor enabling legislation covering three things: authority for performance-based regulation, a statutory right to a standardized connection pathway for resources that satisfy published technical requirements, and a standard value-stack tariff that updates on a schedule and never retroactively. **Why it is safe.** Every element exists in another jurisdiction today. The bill authorizes your commission to do what Hawaii's already does, and gives distributed energy the predictability that has been the industry's consistent request, which matters more to capital formation than the compensation level itself. **The line that travels.** This is not a subsidy program. It changes what regulated monopolies get paid for. ### Utility executive or board member **Your headline.** You can earn more by performing than by spending, and the transition is designed to be financeable. **What you do first.** File a multi-year plan under a total-expenditure framework, and support Principle 1 before Principles 2 through 5 are decided. The sequence matters to you: the reform that changes what you earn on comes before the reforms that change what you control. **Why it is safe.** Under Britain's framework, networks maintained investment-grade credit and outperformed their allowances often enough that the regulator's recurring problem was clawing back excess returns. In-flight capital plans grandfather into the baseline at approved values. Storm hardening, wildfire mitigation, and cyber defense are funded in full, because total-expenditure regulation removes the accounting preference, not the money. **What you give up.** Automatic rate-base growth, and the gatekeeper's chair. What replaces it is a share of every deferral you procure more cheaply than the wires solution. ### Consumer advocate **Your headline.** Costs land on the customers who cause them, and predictable bills become the default. **What you do first.** Intervene for three specific protections: hedged flat products available by default alongside time-varying rates, transition-year bill protection, and a large-load tariff that assigns capacity cost to new large loads instead of socializing it. **Why it is safe.** The status quo is not neutral. Flat volumetric rates already transfer money from customers who cannot shift usage to those who can, and PJM's capacity costs rose from $2.2 billion to $16.4 billion a year across four auctions, spread across every household in thirteen states and the District of Columbia. ### Large-load buyer: data centers, manufacturers, industrial customers **Your headline.** Power years sooner, in exchange for flexibility you can schedule. **What you do first.** Offer verified curtailability during the top 50 to 100 system hours in exchange for fast-track interconnection. The same fast-track tariff must be available on standardized terms to qualifying industrial, commercial, and public loads, not only hyperscalers. Then support obligation-based resource adequacy in RTO stakeholder proceedings. **Why it is safe.** Google signed exactly this structure with Indiana Michigan Power and the Tennessee Valley Authority in 2025 and has since contracted roughly a gigawatt of data-center demand response. Duke's Nicholas Institute estimates that modest curtailment flexibility could open on the order of 100 GW of headroom on the existing grid. ### Investor or developer **Your headline.** Contracted revenue instead of an auction that has hit its price cap four times running. **What you do first.** Support a staged transition toward obligation-based reliability procurement, beginning with standardized bilateral contracts and a residual centralized backstop, in RTO stakeholder processes, and press for the standard value-stack tariff at the state level. Both convert political variables into underwritable ones. --- ## The minimum viable package A small state, or a commission with limited staff, does not need the full program; the hundred-day package is the ask, and the framework is the justification. Six functions carry most of the value, and each can be satisfied by more than one mechanism. **Transparency.** Publish hosting capacity, interconnection metrics, and avoided-cost values. **Access.** Give resources meeting published technical limits a standardized connection pathway. **Accountability.** Tie some portion of utility revenue to measured outcomes. **Valuation.** Let location and timing affect what a resource earns. **Risk allocation.** Put incremental system cost with the load that creates it. **Competitive neutrality.** Procure competitive services competitively where practical. Everything else in this program is implementation detail on top of those six. ## The first 100 days A commission can begin most of the program immediately; legislation and federal approvals become necessary for some later stages. 1. **Publish interconnection metrics** on a fixed schedule: days from application to study, days to a connection offer, withdrawal rates, and the queue by voltage level. What gets measured gets contested, and what gets contested gets faster. 2. **Publish hosting-capacity maps and feeder deferral values** in machine-readable form, so a third party can see where capacity exists and what avoiding an upgrade is worth. 3. **Open a performance-regulation docket** with a scope that names total-expenditure treatment, peer benchmarking, and shared savings for non-wires alternatives. 4. **Approve a flexible-connection tariff** so small resources can connect inside published operating limits instead of waiting for a bespoke study. 5. **Open a large-load tariff proceeding** that assigns capacity and network costs to new large loads and offers fast-track service in exchange for verified curtailability. 6. **Require alternatives analysis before major network spending** so non-wires and reconductoring options are priced against new construction before approval. 7. **Independently verify reliability and flexibility claims** with telemetry-settled measurement, so promised flexibility is a product rather than a hope. --- ## The scorecard: how a commission knows it worked Fourteen measures in four categories, each drawn from reporting a commission can already require. The categories matter: a scorecard that tracks only consumer outcomes reads as an attack on utilities, and one that tracks only utility performance reads as capture. Publish them annually, benchmark them against peer states, and the program stops being a promise and becomes a management framework. **Consumer** | Measure | What it tells you | Source | |---|---|---| | Delivery charge growth against CPI | Whether the reform reaches the bill | Tariff filings and BLS | | Median days from interconnection request to executed agreement | Whether access is getting faster | Utility and RTO queue records | | Outage duration and frequency | Whether reliability held through the transition | Existing SAIDI and SAIFI reporting | **Competition** | Measure | What it tells you | Source | |---|---|---| | Share of requests withdrawn after study completion | Whether the process is destroying viable projects | Queue records | | Hosting capacity published, and its utilization rate | Whether headroom is visible and being used | Utility hosting-capacity maps | | Interconnection cost assigned per megawatt connected, by voltage and project size | Whether upgrade costs are being reassigned to developers rather than avoided | Interconnection agreements and utility filings | **Utility** | Measure | What it tells you | Source | |---|---|---| | Distribution capital per customer, against peer states | Whether spending is disciplined by comparison | FERC Form 1 | | Operating and capital expenditure mix | Whether the build-or-buy choice has actually changed | FERC Form 1 and distribution plans | | Non-wires alternatives procured as a share of deferred capital | Whether cheaper solutions are winning | Utility distribution plans | | Realized return on equity against authorized return, and against output performance | Whether earnings track performance rather than spending | FERC Form 1 and annual reports | | Rate case frequency and duration | Whether multi-year frameworks are reducing litigation | Commission dockets | **System** | Measure | What it tells you | Source | |---|---|---| | Large-load capacity cost recovered from large loads | Whether incidence has shifted off households | Rate case records | | Curtailment hours per connected megawatt | Whether faster connection is trading away too much delivered energy | RTO and utility operations data | | Reserve margin against target | Whether resource adequacy held | RTO and state reporting | **Causal evaluation.** Every participating state should publish a pre-reform baseline and identify a peer comparison group. Success should be judged against the counterfactual, not against the state's own forecast. The consumer and competition measures move within a year and are the early signal. The utility measures move over a control period. The system measures are the durable test, and they are the ones to put in front of a legislature at the five-year mark. ## When the incumbent makes its pitch Every statehouse hears the same three-part pitch: we know how to stop blackouts and you don't; speculators are gaming the queue and should pay more for access; and nobody employs more skilled workers in your district. Each part contains something true, which is why the answer to each starts with a concession and ends with the trade the incumbent is not offering. **Concede operations first, and completely.** Nothing in this program moves a truck, a lineworker, or a storm response. Engineering limits stay with the engineer, and performance regulation pays the utility more, not less, for operating well. Say this before anything else, because every utility argument gains its force by blurring the access decision into the operating job. **Then flip the blackout card.** The institution claiming that only it can keep the lights on is holding two thousand gigawatts of willing supply in its waiting room, at a median wait above five years, with thirteen percent ever reaching service. A queue that holds willing supply out of service is itself the reliability risk. A governor does not have to choose between reliability and reform; the reform is the reliability program. **Flip the speculator card with a concession.** Screening is legitimate, which is why this program uses published criteria, deposits, and readiness tests instead of discretion. But note who defines the word: to the party that owns the gate and sells the competing product, a speculator is a competitor by another name. And the incumbent remedy of paying more to wait longer invites the exit it warns about: large customers and generators are already pricing life off the grid. Every megawatt that leaves takes its contribution to the wires with it, and the households left behind absorb the difference. The utilities' own revenue base is the strongest argument against their own proposal. **Take the jobs card rather than disputing it.** Totex funds the full capital program, and reconductoring, storage, hardening, and interconnection build are union work either way. More projects connected is more work done; the current system produces less construction and more litigation. **The ask.** Stop refereeing blame between the utility and its customers. Change what the utility earns and who keeps the gate, and the fights become bids. ## When someone objects **"Isn't this deregulation?"** No. It regulates the monopoly more tightly, through revenue caps, peer benchmarking, and published performance data, and it opens to competition only the parts that are not a monopoly. Wires stay a regulated monopoly. Generation, storage, and flexibility are not monopolies and have not been for thirty years at the wholesale level. **"Doesn't dynamic pricing hurt low-income customers?"** Only if it is designed carelessly, and the status quo already hurts them. Flat volumetric rates transfer money from customers who cannot shift usage to those who can. Default time-varying rates ship with hedged flat products for anyone who wants a predictable bill, transition-year bill protection, and targeted low-income rates. **"Britain and Australia are different countries."** They are, and the mechanism being borrowed is a payment formula, not a culture. A revenue cap tied to measured outputs works the same way in Honolulu as in Birmingham, which is why Hawaii adopted it. Every step in this program is available under existing US state and federal authority. **"Won't utilities fight this?"** Initially, and the sequence answers that. Principle 1 changes what utilities earn on before Principles 2 through 5 change what utilities control, which is why it goes first. Transmission open access was fought bitterly in the 1990s, imposed anyway, and is now defended by many of the interests that opposed it. **"Doesn't Texas have blackouts?"** Connection reform and an energy-only market are different things, and this program takes the first without the second. ERCOT's 2021 failure traced to plant weatherization and fuel supply in the joint FERC and NERC inquiry, which no interconnection study prevents. What Texas demonstrates is speed: 14.2 GW brought online in 2021 and 2022 against PJM's 5.6 GW, at less than half PJM's size. **"Why isn't the answer just public power?"** Municipal utilities do charge less, and that record deserves respect. But the comparison does not prove what it appears to prove. In 2024 the average residential bill ran $123.78 at public power utilities, $139.42 at investor-owned utilities, and $149.18 at cooperatives, which are also not-for-profit and also earn no return on rate base. Co-op customers pay the most mainly because co-ops serve low-density rural territory, which is the lesson: cost follows structure and circumstance, not ownership form. The municipal advantage comes largely from tax-exempt debt, exemption from income and property tax, and first claim on federal hydropower at cost. Those are transfers, not efficiencies, and they do not scale, since municipalizing more utilities creates no additional federal dams. Ownership also leaves the binding constraint untouched: a municipal utility inside PJM sits in the same interconnection queue and pays the same capacity charges. On permission it can be worse, because municipal utilities and co-ops are exempt from state interconnection and net-metering rules in many states, so a restrictive distributed-energy policy faces no commission and no appeal. And the path is punishing: roughly a dozen communities have municipalized in two decades, most attempts are abandoned, and Boulder spent ten years and $28.7 million before giving up in 2020. The strongest version of the answer is that public power is evidence for this diagnosis rather than an alternative to it. A utility that earns no return on rate base shows no capital bias, which is precisely the claim being made here. Sterling, Massachusetts is in the case evidence for that reason. These reforms are what make any owner perform, and public power can adopt them faster than anyone, by board vote and with no rate case. **"Doesn't faster connection just help gas?"** Gas is now the largest single block in PJM's reopened queue, at 106 GW, precisely because a slow queue favors developers who can afford to wait. Rules-based access is technology-neutral and helps whoever can build fastest, which today includes storage, solar paired with storage, and demand flexibility. Nearly half the solar capacity in queues is now paired with batteries. **"This sounds like European regulation."** and **"This sounds like deregulation."** Both objections get raised, from opposite directions, about the same program. That is a sign the program is neither. It is competition where competition works, and tighter, better-instrumented regulation where it does not. --- ## Running the campaign against the opposition Investor-owned utilities are likely the strongest opposition to this program, they fight where the reforms are actually decided, and they have historically fought with their customers' money. Four tactics follow from that. **Start by making the opposition self-funded.** Before the reform fight, pass the ban on recovering political and lobbying costs from ratepayers. Colorado, Connecticut, and Maine enacted comprehensive versions in 2023 with bipartisan support, covering lobbying, trade association dues, advertising, and grassroots campaigns. Maryland followed in its Next Generation Energy Act, and California's 2025 Ratepayer Protection Act became the first to mandate financial penalties rather than leaving them to regulator discretion. Roughly eighteen states have introduced versions. The effects are documented and immediate: Colorado regulators rejected more than $775,000 in lobbying fees, trade association dues, and investor relations costs from Xcel in a single gas rate case; Connecticut regulators denied over $617,000 from Avangrid and have spared customers up to $10 million; and California's Public Advocates Office found that SoCalGas charged ratepayers $29.1 million between 2019 and 2023 for lobbying against building electrification, after a $10 million penalty in 2022. This bill is independently popular, it passes on bipartisan votes, and it shrinks the war chest that will be aimed at everything else you do. Note also the pairing: Connecticut paired performance-based regulation with a lobbying ban in the same period. **Then make the opposition's spending the scoreboard.** The Connecticut and Maine statutes require utilities to file itemized annual reports of political expenditures, which means the disclosure infrastructure is statutory rather than journalistic and the numbers are the company's own. The message writes itself and is documentable rather than alleged: this company spent this much money opposing a bill that would lower your bill, and here is their filing saying so. Rising opposition spending is evidence the reform is working, and it should be published as a campaign metric on that basis. The Energy and Policy Institute already maintains national tracking. **Use the new asymmetry.** Every previous attempt to reform utility regulation pitted diffuse consumer interests against a concentrated incumbent. That is no longer the shape of the fight. Hyperscale load buyers now have a direct commercial stake in connection speed, lobbying capacity comparable to the utilities', and no legacy rate base to protect. Recruiting them is the single largest change in the balance of forces since restructuring, and it costs the coalition nothing to organize. **Contest the commissions, where they are elected.** In roughly ten states, including Georgia, Arizona, Louisiana, and Oklahoma, commissioners stand for election in low-turnout races that are inexpensive by the standards of statewide campaigns. For a reform program whose center of gravity is the state commission, those are the races where a single seat moves the most policy in the sector. *Sources: state statutes and commission decisions in Colorado, Connecticut, Maine, Maryland, and California; Energy and Policy Institute tracking of utility political spending; California Public Advocates Office filings on SoCalGas expenditures; PowerLines rate-case tracking.* Two defensive notes. Expect a right-of-first-refusal response, because after FERC opened transmission to competition in 2011 roughly ten states legislated incumbent rights back into place, and expect recategorization of spending to escape any threshold you write, which is why the reforms are drafted against portfolios rather than projects. And expect the fight to be at the statehouse rather than in Washington, because that is where four of the five principles are decided. ## Sample language **Docket-opening language for a commission.** > The Commission opens this proceeding to consider a multi-year performance-based regulatory framework for [utility], including: (1) a total-expenditure allowance that treats capital and operating expenditures equivalently for cost-recovery purposes; (2) performance incentive mechanisms tied to measured outputs including interconnection cycle time, hosting capacity made available, peak demand served per dollar of network investment, and reliability; (3) benchmarking of allowed revenue against comparable utilities in other jurisdictions; and (4) a shared-savings mechanism under which the utility retains a defined share of the verified savings from non-wires alternatives procured in place of network investment. **Findings language for enabling legislation.** > The Legislature finds that: (a) the cost of new generation and storage has declined substantially while retail electricity rates have risen faster than inflation; (b) the principal constraint on new supply is the time and process cost of interconnection rather than the availability or price of generating resources; (c) existing cost-of-service ratemaking compensates utilities for capital deployed rather than for outcomes delivered, and therefore does not reward lower-cost alternatives to network construction; and (d) the public interest requires that the Commission be authorized to establish multi-year, performance-based revenue frameworks and to establish rules-based interconnection rights within published operating limits. *Both passages are illustrative drafting templates, and should be conformed to the jurisdiction's own ratemaking statutes and administrative procedure requirements before filing.* --- ## What to hand people The two-page executive summary for a principal. The six-page policy brief for staff who will draft. Paper III for the reform detail, the coalition map, and the roadmap. Paper II for the evidence and the objections answered at length. The press kit for verified figures with sources.