NCPA - National Center for Policy Analysis

Expanding Electric Power Transmission to Prevent Blackouts

May 7, 2004

Portions of the stalled energy bill would improve electric power reliability and increase competition. These include provisions regarding siting authority for transmission lines, private nonutility investment in new lines, and repeal of the Public Utility Holding Company Act (PUHCA).

The single most important cause of blackouts and power shortages (brownouts) is the increasing inadequacy of the nation's electric power transmission system. The U.S. peak electrical load - the demand for power - grew by 2.8 percent per year between 1979 and 1999; expansion of the grid, however, has fallen steadily behind:

  • Transmission capacity growth fell from 3.1 percent per year over the 1979 to 1989 period to 0.7 percent per year between 1989 and 1999.
  • Annual investment in transmission (in constant dollars) has steadily declined since 1975, and in 2000 was less than half as much as in 1980.
  • Due to growing demand and lack of expansion, capacity has fallen 25 percent relative to peak demand since 1982.

The mismatch between demand and transmission capacity contributed significantly to the 2003 blackout and the 2001 northern California blackout. Construction of new transmission capacity and routes is the key to preventing future power outages.

The bill would give authority to the Federal Energy Regulatory Commission (FERC) to resolve delays in transmission projects. It would also allow nonutilities -- such as independent power producers or consumers -- to construct their own lines to access larger markets.

Source: Robert Michaels (professor, California State University - Fullerton and NCPA adjunct scholar), "Energy Bill: Who Will Keep the Lights On?" Brief Analysis No. 474, May 7, 2004.

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