Nodal Governance of the U.S. Electricity Grid
UVA Law Faculty Affiliations
The U.S. electricity grid faces more challenges on a wider scale than ever before—climate change, energy poverty, crumbling grid infrastructure, the pending onboarding of millions of new grid devices, etc. Preparing the grid for these challenges is not an engineering problem, but rather a governance one: we need a new model for how to govern our grid.
Grid experts often advocate for one of two centralized governance models: the command-and-control system associated with the early development of the electricity grid, or the neoliberal system associated with more recent market reforms.
This article argues that both of these models are wrong. Neither model accurately describes how the grid has functioned in the past or how it ought to function today. Instead, a close examination of the grid and its history reveals a highly decentralized network in which private firms, industry associations, public utilities, local organizations, and state and federal regulators all influence grid governance. This landscape is more aptly labeled a “nodal governance system,” wherein power is wielded by a variety of state, sub-state, and non-state actors.
The nodal governance model is not only descriptively accurate, but also useful. First, using a nodal governance framework, we can develop a true topography of all the players and “power” flows on the U.S. electricity grid. Second, a nodal governance system carries certain benefits we often associate with decentralized governing systems and may even provide a path forward for current policy issues, such as the regionalization of California’s electricity grid or the Green New Deal. And third, the nodal governance model reveals the threat that a grid jurisprudence premised on centralized models—recently embraced by the Supreme Court—could pose to our grid. This article argues that we ought to preserve the grid’s nodal nature and leverage it to prepare the grid for the future.