“By the end of the book, I could no longer shake the feeling she just might be right on the big thing. RTOs may be producing an increasingly fragile grid.”
Meredith Angwin’s Shorting the Grid is a likeable, sometimes irritating book. Or maybe an irritating, sometimes likeable book. I cannot decide. Angwin’s book offers an introduction to and assessment of the Regional Transmission Organizations (RTOs) that since the late 1990s have come to coordinate use of the transmission grid for about two-thirds of the electric power consumed in the United States.
Her view: RTOs are dominated by insiders who skew the system their direction at every chance, reaping profits while shirking responsibility for reliability. As a result we have an increasingly fragile, unreliable grid.
When Angwin’s book was published in 2020 it may have seemed alarmist. The back cover warns of rolling blackouts to come as “closed meetings, arcane auction rules, and five-minute planning horizons … topple the reliability of our electric grid.” After California’s brief rolling blackouts in August 2020 and the disastrous system failures in Texas of February 2021 the book seems prophetic. Perhaps it is worth hearing what she has to say about RTOs, which dominate most of the nation’s power flows.
Early on she divides the story into the “power grid” and the “policy grid.” The former operates by well-understood physical principles governing the flow of electricity. The latter governs the flow of money and influence around the electric power sector. You need to know some things about the “power grid” to understand the “policy grid” and she provides a brief, easy-to-grasp discussion. The problems she sees arise in the “policy grid,” and there the stories become longer and more complicated.
Most of her focus is on ISO-New England (ISO-NE) which serves her Vermont home and for which she continues to serve on the Consumer Liaison Group. Her tone is that of citizen activist, the sort of person who will attend city council meetings and always have something to say. Usually at length. Often annoying. But in her case she’s an activist who is well informed and she actually does have a point.
Angwin admits she was no expert on RTOs when she became interested in how they functioned. She’s no slouch to be sure: a chemist by training who worked many years in the utility industry and the co-inventor of a patented method for protecting underground transmission lines. But she became interested in RTOs because of ISO-NE’s connection to plans to shut down the Vermont Yankee nuclear plant. Shutting down a functioning, emission free nuclear plant seemed just the wrong step to take given the nation’s environmental agenda. So she started digging into the role of the regional grid operator.
She finds a system nearly impenetrable to outsiders, even an ‘outsider’ who had spent a career working for and with electric utilities. The rules governing the system seemed to be the product of endless committee meetings dominated by industry interests. Discussions were couched in arcane jargon and a bewildering array of acronyms. The priorities of distant federal regulators somehow mixed with the views of local grid operators and influence of industry lobbyists to produce a complicated, maze-like system. It felt to her designed to be impenetrable to outsiders, to be a game rigged by insiders at the consumers’ expense.
Twenty pages into Angwin’s book I really liked it as a lively, engaging, and well-written introduction to a very complicated topic. But by about 70 pages in, serious concerns crept in. When she agreed with experts, “trust the experts” was her theme. When she disagreed with experts or did not understand their reasoning, she suspected foul play. But eventually, despite some mistakes, I came to like the book.
To highlight one common theme of hers, she constantly wonders why policymakers pushed so many decisions into “the market.” In her view experts often already knew how to fix the problem. Market-based explanations escaped her, so she blamed nefarious interests. In her view making the market responsible was making it so no one was responsible for success or failure of the grid. It was the grid manager’s way of escaping any blame when things went wrong.
The first extended case of this comes with her investigation of ISO-NE’s Winter Reliability Program. An initial program paid gas generators capable of fuel switching to maintain fuel oil supplies on site for reliability purposes. At times during New England cold snaps extreme high demand for natural gas led to fuel supply concerns for gas-fired generators–gas delivered for home heating had priority. But in her telling this successful approach had to be discarded due to federal regulators’ mystifying insistence that reliability programs needed to be technology neutral and market based. Side payments to certain gas generators for keeping oil supplies handy violated those abstract concerns, but they worked.
She reports with amazement the struggles of the RTO and its members to come up with a fuel-neutral, market-based replacement for a simple system that worked. Policymakers in fact have good reasons to prefer fuel-neutral, market-based approaches. The Federal Energy Regulatory Commission now has over two-decades of experience watching RTOs struggle with inefficient programs that shut out competition and hamper innovation. Angwin seems not interested in exploring this history.
She expresses considerable concern about the growth of intermittent renewable power on the grid. As she sees it policymaker’s purported concern for fuel-neutral policy falls away when it comes to renewables, and instead renewables are being ushered onto the grid at the expense of reliable baseload generators. And given that intermittent renewables seem to require considerable backup from fast-acting dispatchable energy, that policy preference for renewables is a boon to natural gas. She had New England in mind when she expressed concern over the “just in time” fuel delivery for natural gas, but given the prominent role that gas delivery failures played in Texas’s energy disaster in February it surely is not just a New England concern.
Net metering policies come under fire for their cost-shifting potential. She notes the struggle Nevada regulators had in reforming rates for residential solar installations and similar struggles elsewhere. She connects net metering with the emergence of “prosumers”—consumers who also produce some power—then connects prosumers to microgrids.
Her connections are too loosely made, and she ends up dismissing microgrids because net metering is an outdated rate structure. It’s a non-sequitur: microgrids can help customers better achieve their own goals for high quality, reliable power while supporting the reliability of the grid as well. They don’t fit her view of how things work, so she cannot see the value in them.
We get similar confusions in a discussion of grid storage. A great deal of the costs of the ISO-NE grid is assigned to regional utilities based on their power sales on peak demand days, and so utilities go to some length to cut peak consumption on those few days. The utilities brag to their customers about conservation, but the whole “game of peaks” is an effort to minimize the utility’s share of grid costs. In other words, the game of peaks is about trying to shift costs onto others better than they shift costs onto you.
While she gets the utility motivation right, she then assumes just about any effort to shave peaks is just a cost-shifting game. Sure, she acknowledges that maybe some benefits will flow from shifting load off peak, or from energy storage, or from coordinated programs to manage air conditioning loads in summer. Ultimately they get dismissed as mostly cases of the “game of peaks.”
And yet she provides outsiders a good look at (parts of) the RTO system. She conveys some of the challenges that will confront a policy-driven transition of the electric sector. “We can’t run a system on wishful thinking,” she says, and so citizen activists need to get informed. She offers tips on how to get started.
Angwin herself hovers over the text, mostly narrating from just off-stage but occasionally popping in to report her own experiences as part of a consumer’s committee at ISO-New England. Citizen-activist Angwin has much to say about the RTO systems overseeing much of the US grid. She provides a good introduction to RTOs. Readers get a sense of the endless committee meetings, the lobbying, and the role of regulators. Not all of her story is accurate, she seems not to understand key elements of RTO design, she trusts expertise too much, she does not understand what markets are for, she gets many small things wrong.
Still, by the end of the book, I could no longer shake the feeling she just might be right on the big thing. RTOs may be producing an increasingly fragile grid. Angwin’s Shorting the Grid should not be the only book you read on modern power systems, but it is not a bad place to start.
Michael Giberson, PhD is associate professor of practice in Energy, Economics, and Law in the Rawls College of Business, Texas Tech University. Twitter @michaelgiberso3.