The biggest problem bedeviling the grid is “regulatory certainty,” CGNN Group CEO Michael Catanzaro told utility directors and state regulators on Monday while attending the National Association of Regional Utility Commissioners (NARUC) Winter Summit at The Westin Washington, D.C. City Center.
Building out the nation’s electric grid to meet rapidly expanding demand will require new laws, the electricity providers and utility directors say.
There remains a great deal of uncertainty among utilities, regional transmission operators, state regulators, and investors because one president’s executive actions can be undone by the next, they said.
This, they said, creates repeated—often wholesale—reversals in policies and stymies long-term planning and securing financial commitments.
‘Energy Dominance’
The president’s “early moves” have spelled out a “theme—energy dominance” that is “straightforward, but when it comes to grid, it’s not straightforward at all,” Catanzaro said.
“We can’t be dealing with this pendulum, undoing orders, rules, regulations with every new administration,” he said.
In her keynote address on Monday to the nearly 2,200 utility directors, state regulators, lobbyists, and others engaged in grid development and transmission, Sen. Shelley Moore Capito (R-W.V.) said Congress is aware that it must act—and do so fast—if Trump’s energy goals, such as lowering energy costs for U.S. consumers within 18 months, are to materialize.
“Trump is taking down regulations,” she said, “but the next person who comes in can just go in and undo that. Congress needs to get our ducks in the row to go forward with bipartisan, bicameral legislation.”
This is possible and is gaining bipartisan traction, such as in permitting reform, Capito said.
While it can be “pretty tough to find a sweet spot” between competing factions and different state regulators, never mind simply Republicans and Democrats, “everybody needs and wants permitting reform,” she said.
Consensus in this realm can create momentum elsewhere in “trying to figure out the best way to move forward,” she said.
“Congress must act—must be a part of an all-of-the-above plan,” she said.
U.S. Energy Association Inc. CEO Mark Menezes said that while executive orders themselves won’t ensure that the grid can meet growing demand, Trump’s declaration of a national energy crisis could “be a game-changer.”
He noted that the North American Electric Reliability Corp. in 2023 nearly tripled its nine-year electricity demand forecast from its 2022 projection, from 200 to 550 gigawatt-hours (GWh) of growth.
The designation of a national energy emergency and creation of the National Energy Dominance Council led by Interior Secretary Doug Burgum is “at the same level of the National Security Council,” Menezes said.
“This is a significant thing,” he said.
Menezes said that grid operators, regulators, and investors appreciate that the National Energy Dominance Council is not constituted “of companies, but of agencies that know something about energy,” and it clearly means that “under this administration, energy is in ascendancy.”
The council “will help orchestrate how different agencies have responsibilities, how they function” in meeting Trump’s directives and executive orders, he said.
“There is no definition of ‘emergency’ in the national emergency declaration,” he said, meaning it can be flexible in identifying “how to apply it on a case-by-case basis.”
Streamlining Permitting
Trump’s ‘Unleashing American Energy” executive action package also will be pivotal in deregulation and streamlining permitting, he said.“There is going to be a review of existing regulations, sort of across the board,” Catanzaro said.
While the order targets “some specific” regulations and rules and repeals Biden-era executive orders, massive regulatory laws such as the National Environmental Policy Act (NEPA) “remain on the books,” he said.
Executive orders cannot address NEPA or other laws that should be reviewed and, in some cases, changed, Menezes agreed. Only Congress can do that.
In fact, he added, Congress needs to overhaul the entire federal regulatory system. It has avoided doing so since at least 2005, he said.
“[We] need another permitting bill,” Menezes said, noting the House has taken tentative steps in examining NEPA but is a long way from doing anything significant.
“We need to move a permit by rule” bill, he said. For states, permitting would become “a box-checking exercise” without year-long reviews by dozens of federal agencies and offices.
“Those who operate and construct ... they still have to comply with all those rules. That is how the system should be designed,” Menezes said. “Congress has to get serious about advancing legislation.”
The conference continues through Feb. 26.
