The U.S. electricity sector has traditionally consisted of regulated monopolies that produced and transmitted power to local customers within given service territories. While this industry structure remains largely intact in some areas of the country (e.g., the Southeastern United States) and continues to work effectively, others have seen dramatic changes in the electric power sector. Today, more than half of the electricity generated in the U.S. is traded in regional wholesale markets before being delivered to the end-use customer. In this new landscape, generation and transmission are increasingly provided by different companies.

  1. Responding to these challenges, the NGA Task Force on Electricity Infrastructure offered recommendations, which are detailed in this Issue Brief:
  2. Governors should form Multi-State Entities (MSEs) to facilitate state coordination on transmission planning, certification, and siting at the regional level.
  3. The MSE should be established through a Memorandum of Understanding (MOU) to be signed by governors and, where relevant, federal (land management) agencies and public power authorities, tribal authorities, and border countries.
  4. Governors should designate a state official to serve on the MSE as the state's lead contact.
  5. The MSE should facilitate a strong state role in RTO planning.
  6. The MSE should establish an Interstate Protocol to coordinate the review and permitting of interstate transmission facilities.
  7. The MSE should form Project Teams comprising states that will be affected by interstate transmission projects proposed by RTO plans.
  8. The MSE should endorse a set of best practices for state transmission planning, siting, and permit activities; work with member states on the adoption of best practices; and integrate these best practices with the Interstate Protocol.
  9. To promote voluntary cooperation and reduce the probability of impasse among states, the MSE should:
    • facilitate regional negotiation and conflict resolution processes;
    • actively encourage the use of new low-impact technologies and existing corridors to enhance or expand the grid in ways that minimize environmental and land-use burdens;
    • explore tools that may be used to mitigate the inequitable distribution of costs that can accompany an interstate transmission line, including an impact fund that would be available to disproportionately impacted states for use toward energy related projects or the purchase of open space (to compensate for affected lands);
    • evaluate ways to bar states that do not participate or that block important regional projects from obtaining benefits otherwise available through regional efforts; and
    • promote the view of electricity (and electricity pricing and reliability) as a regional "common good" rather than a differentiating factor to be used in competition with neighboring states for economic development opportunities.
  1. The MSE should be governed by a set of by-laws, to be specified in the MOU. At a minimum, these bylaws should:
    • identify and define the role of the MSE;
    • outline the relationship between the MSE and, if operational, the RTO;
    • describe the Project Team process for affected states;
    • define "regional need";
    • establish rules for the Project Teams' Regional Finding of Need;
    • create a framework for collaborating with neighboring MSEs on projects that bridge MSE regions;
    • describe the Interstate Protocol; and
    • address administrative and funding issues.