# Coalition and Politics

### Who gains, who gives something up, and what moves each group

*A companion paper in the series "The Great Inversion."*

The coalition for a new agreement is everyone outside the queue: households, businesses, energy producers, and energy consumers large and small. Investor-owned utilities and incumbent owners of generation and transmission have the most to give up, and they face different venues and different stakes. Each group has a specific reason to join and a specific condition that would turn it away.

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## The groups

| Group | Gains | Gives up | Likely support | What moves them | Where they'd likely land |
| --- | --- | --- | --- | --- | --- |
| DER developers and aggregators | Durable tariffs, connection by right, and volume | Per-kWh economics where retail-rate crediting still applies | Very high | Predictability finances projects; the level matters less than the fact that it stops changing | Locational offers and envelopes over administered tariffs |
| New-entrant generation developers | Long-tenor contracts and far faster entry | Little; the current auction pays them almost nothing | High | The last auction drew about 525 MW of new supply at a record price | Obligation contracts over a longer forward auction |
| Institutional capital | Contracted revenue, shorter cycles | Merchant volatility plays | High | Revenue certainty is the cheapest lever on cost of capital | Obligation contracts over a longer forward auction |
| Large loads: hyperscalers and industrials | Time to power, and a standard flexibility product | Capacity costs they currently avoid | High | Time to power dominates the arithmetic; assigned capacity cost is small against a campus energized years sooner | The large-load tariff now, obligations phased |
| Ratepayers and consumer advocates | Costs shift to their drivers, hedged default rates, transparency | Complexity to police, and a long record of opposing default time-varying rates | Mixed to favorable | Bill protection, public scorecards, non-retroactivity, and funded analytical capacity to verify all of it | Hedged defaults and administered values over full dynamic pricing |
| Independent engineers and reliability professionals | Clear technical rules, better data | Case-by-case discretion | Mixed to favorable | Published standards, auditable limits, explicit reliability accountability | Published operating limits over discretionary review |
| Environmental groups | Queue clearance is the decarbonization constraint | Gas connects faster too, and leads PJM's reopened queue at 106 GW | Mostly yes | The net emissions math of a cleared queue; nearly half of queued solar is paired with storage | Standardized pathways and envelopes, technology-neutral |
| Governors | Rate relief voters can feel, and credit for delivering it | Utility political opposition | First mover | A publishable result inside a term, attributable to their leadership | Whatever produces a publishable number inside a term |
| Commissioners and staff | Less rate-case theater, better data | A higher analytic bar, and in elected commissions a public vote to defend | Mixed | Funded capacity, and peer benchmarks to work against | Totex, with a ringfenced operator before a separated one |
| Building trades and IBEW | Reconductoring, hardening, and envelope deployment are union work | The assumption that every solution is new construction | Mixed | Totex redirects the capital program rather than shrinking it | Reconductor-first, which is union work either way |
| Co-ops and municipal utilities | The same tools without rate-case exposure | Little, though they answer to boards rather than commissions | Mixed | Board action, federal financing conditions, and joint-action agencies; no mandates | Published data and non-wires procurement, not new institutions |
| Incumbent owners of generation and transmission | Obligations still pay their capacity, under contract | The largest financial win of the status quo: cap-bound clearing that pays the existing fleet | Resistant | Little near-term; their influence runs through RTO sector voting, so the answer is contracts and FERC process rather than persuasion | Longer forward procurement, not obligations |
| Investor-owned utilities | Earnings on outcomes; totex funds the real needs in full | Automatic rate-base growth, the gatekeeper's chair, and the data monopoly | Strongest opposition | Britain's record is the conversion argument, and it describes where a well-run utility lands rather than how the sector behaves during the fight | Performance incentives over totex; ringfencing over separation |

## The two resistant groups are not equivalent

Incumbent generation and transmission owners face a revenue loss from one reform, and their influence runs through RTO sector voting, where a bloc can withhold the supermajority that sends a tariff change to FERC under Section 205 and force reformers onto the slower Section 206 path instead. That is a procedural chokepoint at the federal level, and FERC process answers it. Investor-owned utilities face something categorically larger: four of the five principles alter their business model. They engage in the venue where those four are actually decided, the state commission and the legislature, where they hold in-state political relationships, recoverable regulatory expense, and a presence in every district they serve, against intervenors funded at a fraction of their scale. The decisive work is at home, not in Washington. The first reform is chosen precisely because it changes what utility earnings reward, and the funded-intervenor, open-data, and yardstick provisions are part of the program for the same reason. Their influence is documented: a 2023 study from the Center for Growth and Opportunity at Utah State University finds evidence that utilities use political contributions to secure higher authorized returns.

**Utility opposition is not a monolith.** Wires planners, generation affiliates, shareholders, municipalities, and co-ops are differently exposed, and several gain from mechanisms the others resist. Don't take the utility's business away; change what it gets paid to be good at.

## What would turn each group away

DER developers leave the coalition if locational procurement replaces retail crediting without a bridge, if curtailment arrives uncompensated, or if telemetry requirements price out small fleets; the transition rules under Principle 3 exist for exactly this reason. Large loads balk at take-or-pay terms on network capacity of uncertain utilization and at collateral sized to a forecast they dispute, which is what standard products and demonstrated-use trueups answer. For utilities the breaking points are baseline resets that confiscate efficiency gains, stranded-cost exposure, and earnings volatility at the reset; the symmetric reopener and the grandfathering of in-flight capital are in the order language because of them. Consumer advocates exit over complexity they cannot police, which is why funded analytical capacity is a coalition condition and why the incidence work is commissioned with the first docket.