Powering Up: Improving Energy Grid Reliability and Resilience to Lower Energy Bills

The Environmental and Energy Study Institute (EESI) held a briefing about policy solutions to meet the reliability, resilience, and affordability challenges facing the U.S. energy grid. The grid underpins modern life—enabling economic activity, supporting national security, and powering everything from basic necessities in homes to critical infrastructure like hospitals and transportation. Today, the grid’s stability is being tested like never before. Aging infrastructure, extreme weather, and unprecedented increases in electricity demand could soon overwhelm generation and transmission capacity and outpace states and utility planners. These challenges hit home, from higher energy bills for consumers to rolling blackouts that leave communities vulnerable during heat waves, wildfires, winter storms, and hurricanes.

This briefing outlined policy options and technological innovations to address these challenges. Panelists expanded on several aspects of grid modernization, including the buildout of new transmission lines, bringing online new power generation and energy storage capacity, and improving energy efficiency. They also described the state of permitting reform in the 119th Congress. Attendees left this briefing with a better understanding of the imperatives and multiple benefits of an environmentally and economically sustainable energy grid to power the 21st century.

Highlights

KEY TAKEAWAYS

Every power system has three main components: generation, transmission, and distribution infrastructure to serve demand points.
Expanding the capacity of the transmission system could save U.S. households somewhere between $6.3 and $10.4 billion per year (after accounting for the cost of new infrastructure) by allowing more efficient access to the lowest-cost electricity.
Regional transmission lines can also promote sharing resources across the grid, creating more flexibility to integrate renewable energy.
Generation and transmission optimization, including grid-enhancing technologies and the reconductoring of existing transmission lines, are the most efficient and affordable methods to improve the grid for consumers.

Energy: Energy is defined as the capacity to do work. There are many forms of energy, including chemical, mechanical, gravitational, thermal, electrical, and radiant. According to the first law of thermodynamics, energy cannot be created or destroyed, it can only change forms. Technologies like engines, dams, and solar panels convert energy from one form to another.

Electricity: Electricity is a form of energy. It is uniquely useful to people because it can be easily moved around via power lines.

Power: Power is defined as the rate at which energy is converted from one form to another.

Paulina Jaramillo, Trustee Professor, Engineering and Public Policy, Carnegie Mellon University

Every power system has three main components: generation (e.g., solar farms, wind turbines, or natural gas power plants), transmission (i.e., power lines), and distribution infrastructure to serve demand points (e.g., industrial facilities, commercial buildings, and houses).
The U.S. power system is a large and complex engineered system. It is complicated because there are fluctuations in the physical variables that drive the system (e.g., non-steady voltage), demand changes constantly at a sub-hourly timescale, there are physical capacity limits, and there is limited redundancy. The system also has to match supply and demand on an instantaneous basis.
Historically, the electricity system was built around vertically-integrated utilities, where a single utility controlled generation, transmission, distribution, and the retail sale of electricity.
In the 1990s, the United States restructured the electricity system, which led to the creation of markets and competition in some states.
One model is wholesale competition where independent power producers compete to supply electricity to one utility in a service area that then provides electricity to commercial and residential customers.
Another variation is retail competition, where several utilities compete for customers and independent power producers also compete to serve the utilities. In many places, however, there is still only one utility so consumers do not have a choice.
Energy market policy varies by state. There are 23 states with regulated energy markets, meaning they still have vertically-integrated utilities.
There are 27 states where the electricity market, the natural gas market, or both are deregulated, and the markets are competitive systems.
In some states, the state Public Utility Commission (PUC) has the statutory power to regulate the electricity system. In other states, the PUC has jurisdiction over the load-serving entities, but not over transmission or markets. In these cases, the Federal Energy Regulatory Commission (FERC) has jurisdiction over those areas.
Inconsistent regulatory structures with multiple entities having jurisdiction makes it hard to make coherent plans for the grid at a national level.
However, planning is needed because there is massive demand growth for electricity as a result of the artificial intelligence (AI) boom. It is predicted that, on the East Coast alone, there could be 60 gigawatts of additional demand by 2030, which would require building out transmission infrastructure in a short period of time. This demand growth also poses a challenge for the decarbonization of the energy grid.

Zach Zimmerman, Research and Policy Manager, Grid Strategies

Fewer high-capacity transmission lines have been built across the country in the last decade. In 2024, the United States built just under 900 miles of high-capacity transmission, which is down from an average of 1,700 miles of lines built per year a decade ago.
Aging transmission systems built in the 1950s and 1960s are reaching the end of their expected lifespans. This poses a significant challenge because they need to be replaced to ensure reliability, increase efficiency, and maintain consumer affordability.
Expanding the transmission system helps to reduce congestion costs, which constrain the grid and prevent low-cost energy from reaching consumers. Last year, the nation lost around $11.5 billion in congestion costs.
Transmission systems allow many regions to access a diverse generation supply, which can be particularly important during extreme weather events when energy can be redirected from unaffected areas to impacted ones.
Increasing the capacity of transmission lines can decrease consumer costs. Expanding transmission could save U.S. households somewhere between $6.3 and $10.4 billion per year (after accounting for the cost of new transmission) by allowing more efficient access to the lowest-cost electricity.
Three barriers to increasing transmission system efficiency are planning, permitting, and paying.
Regional planning processes across the country are often too focused on the near-term and do not always account for changes in load growth, new additions of electric generation, or extreme weather. FERC issued Order 1920, the transmission planning cost allocation rule, which encourages planning organizations to adopt better practices.
Transmission permitting is another barrier, as large interregional transmission projects often take 15 years to develop. The average time for a federal agency to complete National Environmental Policy Act environmental impact statements for large-scale transmission projects is around four years.
The Department of Energy’s (DOE’s) Transmission Facilitation Program addresses the problem of financing large infrastructure projects by investing in transmission lines and providing some upfront certainty to investors.
The DOE Coordinated Interagency Transmission Authorizations and Permits Program could cut average permitting times in half for all major transmission lines.
Advanced transmission technologies, such as grid-enhancing technologies and high-performance conductors, make the grid more efficient, resilient, and better able to handle new demand.

Kyle Davis, Senior Director of Federal Affairs, Clean Energy Buyers Association (CEBA)

From a market perspective, grid modernization and clean electricity procurement are attractive to the private sector because of three main attributes: grid reliability, reasonable pricing, and innovations in carbon-neutral electricity.
CEBA educates corporations on how to directly procure electricity in electricity markets.
Permitting reforms support grid modernization. The environmental review process can be improved by replacing hard-copy document applications with online applications that could harness cloud-based AI. The scope of environmental laws as they relate to infrastructure projects can be reformed. Judicial reforms could also shorten the permitting process.
There is an opportunity to interconnect power projects and large sources of electricity consumption to the grid in a faster way. Previously, it would take about one year of studies and impact analyses to interconnect a power plant to the grid. Now, it can often take eight years.
Upgrading existing transmission lines by replacing the wires or adding equipment to towers is easier and faster than building new lines, since the rights-of-way have already been obtained.
L ong regional transmission lines can promote sharing resources across the grid, creating more flexibility to integrate renewable energy. These inter-state lines have a longer permitting process, so parallel implementation across states is necessary.

Patrick Hennigan, Director of Federal Affairs, Pacific Gas and Electric Company (PG&E)

In 2024, California's electricity generation mix was 57% renewable energy, 35% natural gas, and 7% nuclear energy. By 2045, California hopes to have a net-zero economy.
In the summer, California relies heavily on solar energy during the daytime, but solar energy currently cannot meet nighttime demand, so natural gas is used. Solar energy storage can start to shift the state away from natural gas.
From 2018 to 2025, battery storage capacity in California increased from 500 megawatts to more than 15,700 megawatts, with an additional 8,600 megawatts planned to come online by the end of 2027. Batteries have the capacity to store solar energy for night use and to meet demand during heat waves.
Electric vehicles (EVs) are a significant source of energy demand in California, with over 740,000 EVs currently in the PG&E service area, and more than 800,000 EVs expected by the end of the 2025.
EVs can have less of an impact on the grid by charging at low energy-demand times of the day. Bidirectional charging allows for vehicles to supply the grid in the event of power outages or increased electricity demand.
On the distribution side, one solution is a flexible service connection program that brings new EV chargers online quickly provided that participants accept that their maximum electricity demand will not be met for about 5% of the year.
AI and data center growth provide an opportunity to increase the efficiency of the energy grid. Currently, the grid is at about 45% of capacity most of the time, so there is an opportunity to decrease customer costs by increasing usage. California is expecting about 10 gigawatts of data center growth in the next five years, and a reduction of customer bills by up to 2%.
PG&E works to improve the efficiency of the existing power system without having to invest in new infrastructure, including by increasing the capacity of transmission lines and decreasing equipment fatigue.
Wildfire risk is an important issue for energy companies. There are a number of steps energy companies can take to prevent wildfire damage, including increasing their situational awareness through advanced weather stations and data analysis, enhanced power line safety settings, resilience work (e.g., strengthening poles and power lines, managing vegetation, and undergrounding distribution lines in high fire threat areas), and public safety power shutoffs as a last resort.

Q&A

Q: What should Congress's role be in modernizing the energy grid to meet 21st-century demand?

Jaramillo

In the short term, Congress can fund grid modernization efforts in both the technological and planning arenas.
States need support in modernizing their planning processes to address the different constraints they face.
In order to modernize the technical elements of the grid, the governance structure of grid regulation must also change.

Zimmerman

Congress could provide additional funding for existing programs and large infrastructure projects.
Congress could create more regulatory certainty for transmission projects by passing permitting reform proposals that add interregional planning and transmission payment plans.
Building long-term, bipartisan support for transmission system projects is important.

Davis

Congress could prioritize policy solutions to ensure reliability, put downward pressure on electricity prices, and support innovation in carbon-emission-free sources of energy.
Infrastructure and transmission permitting reforms help complete large infrastructure projects, which address rising electricity prices and disproportionate customer costs.
Congress could encourage FERC to accelerate the deployment of advanced transmission technologies, like grid-enhancing technologies and the reconductoring of existing transmission lines, and to finalize and put into force the dynamic line rating rule.

Hennigan

Congress can invest in new technologies to improve the energy grid and in new transmission lines.
If a company is already doing environmental reviews under state laws that are more stringent than federal requirements, streamlining what is required under federal law would reduce costs and expedite timelines.

Jaramillo

All three parts of the power system need to be modernized in the face of increased demand, not only transmission. There is a need for a greater capacity of sources of power, in addition to needing better infrastructure to distribute electricity to customers.

Q: Two years ago, then FERC chairman Willie Phillips stated that there were 2,000 gigawatts of power projects in various stages of readiness for implementation and connection to the grid. What progress has been made to complete and connect these projects to the grid?

Davis

The interconnection queue lists the power generation and transmission projects that are seeking to connect to the grid. Before a connection can be made, the project’s impact on the local distribution system must be evaluated.
Over the last two years, FERC enacted Order 2023, which should make the interconnection queue process more efficient. However, states are still in the planning phase so no benefits have been realized yet.
Tax reform in the One Big Beautiful Bill Act (P.L. 119-21) means that some of the solar and wind projects in the queue might not get built, which could decrease the backlog.

Zimmerman

Increasing electricity demand from data centers and other manufacturing facilities created a backlog that is delaying the benefits that could come from Order 2023.
Congress could take additional steps to streamline the interconnection process better than Order 2023 can.
Advanced transmission technologies are a part of Order 2023 and are a way to bring additional capacity to the grid, allowing resources to connect more quickly to help with the backlog.

Q: Looking ahead, what innovation—technological, regulatory, or financial—are you most optimistic about for its potential to transform the U.S. electric grid for the better?

Zimmerman

Utility companies could adopt advanced transmission technologies in their everyday planning processes.
Order 2023 and Order 1920 try to promote planning across generation and transmission, but there is more work to do to build these synergies.
Generation and transmission optimization are the most efficient and affordable method to improve the grid for consumers.

Davis

AI tools can be used in the Federal Permitting Council process to review a permit application’s completeness, increasing efficiency and automation.
AI tools could also be used to help with distribution system impact analysis.

Hennigan

EVs can be a big part of virtual power plants. There are also over 900,000 rooftop solar customers in the PG&E service area and over 100,000 customers with battery energy storage, so these can be leveraged for a stronger grid.

Jaramillo