Topic: Grid Governance in the Energy Trilemma Era: Remedying the Democracy Deficit 

Speaker's name: Daniel Walters
Professor of Law, Penn State Law 

Abstract: 

Transforming the electric power grid is central to any viable scenario for addressing global climate change, but the process and politics of this transformation are complex. The desire to transform the grid creates an “energy trilemma” involving often conflicting desires for reliability, cost, and decarbonization; and, at least in the short run, it is difficult to avoid making tradeoffs between these different goals. It is somewhat shocking, then, that many crucial decisions about electric power service in the United States are made not by consumers or their utilities, nor by state public utilities commissions or federal regulators. Instead, for much of the country, those decisions are made by entities known as regional transmission organizations (RTOs). These RTOs, which straddle and blur the boundary between private and public methods of social ordering, establish and run wholesale electricity markets, coordinate dispatch, keep the grid in balance, and plan infrastructure for the grid of the future. These responsibilities put RTOs at the center of the energy trilemma—a position that sits in significant tension with their ambiguous status, incentives, and accountability.

To fully understand how RTOs work and the role they are playing in the energy transition, it is necessary to examine where they came from, what assumptions animated their creation, and, finally, how those assumptions have been undermined by the changing landscape of the energy sector. This article aims to both explain what RTOS have become and highlight what might need to change to make them effective arbiters of the tensions at the heart of the energy trilemma. Our central argument is that RTOs emerged as institutions wedded to a peculiar model of democratic governance—corporatism—that no longer fits in the trilemma era. Corporatist governance lodges responsibility for negotiating public policy in an exclusive committee of representative stakeholders from the private sphere, and this neatly encapsulates the historical roots and contemporary practice of RTOs. However, we argue that the challenges facing the corporatist model of grid governance have become intractable, as the energy trilemma has not only raised the stakes of the tradeoffs involved but has also introduced new tradeoffs and new stakeholders who have no seat at the corporatist table. As a result, a democratic deficit threatens to impede efforts to navigate the energy trilemma unless reforms are implemented—specifically, reforms to make RTOs more open and responsive to the full range of stakeholders in the energy trilemma era. 

Daniel Walters

Daniel E. Walters is an assistant professor of law at Penn State Law, as well as an affiliate faculty member in the Department of Political Science and an affiliated researcher in the Institutes of Energy & the Environment at the Pennsylvania State University. He brings an empirical and interdisciplinary approach to the study of public law and regulatory policy, with work appearing or forthcoming in the Yale Law Journal, the Stanford Law Review, the Columbia Law Review, the University of Pennsylvania Law Review, the Georgetown Law Journal, the Michigan Law Review, the Cornell Law Review, the Emory Law Journal, Ecology Law Quarterly, the Journal of Public Administration Research & Theory, the Harvard Environmental Law Review, and the Administrative Law Review, among others. His current research focuses on empirically testing claims undergirding proposed reforms to the regulatory state and administrative law, as well as examining political and legal approaches to promote a transition to a cleaner energy economy. Professor Walters serves as the Editor-in-Chief of Administrative & Regulatory Law News, the newsletter of the American Bar Association's Section on Administrative Law & Regulatory Policy. 

Professor Walters is a 2012 graduate of the University of Michigan Law School, where he was a member of the Michigan Law Review and served as the editor-in-chief for the inaugural volume of the Michigan Journal of Environmental & Administrative Law. Professor Walters also earned his Ph.D. in political science at the University of Wisconsin-Madison in 2019 with a dissertation focusing on bureaucratic politics and administrative behavior. Before joining the faculty at Penn State, Professor Walters was a regulation fellow in the Penn Program on Regulation at the University of Pennsylvania Law School and a law clerk for the Honorable M. Margaret McKeown on the U.S. Court of Appeals for the Ninth Circuit.  

https://pennstatelaw.psu.edu/faculty/walters 

Publications 

https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=1841296