Coordination Failure Cost

The US has seven RTOs, each with different market rules, capacity constructs, and interconnection processes. States within those RTOs have different renewable mandates, rate structures, and utility regulations. The result: a patchwork where building a transmission line, interconnecting a solar farm, or operating a VPP requires navigating multiple overlapping jurisdictions. This fragmentation has a cost, and it is large.

The transmission example. Building a high-voltage line from Iowa wind farms to Eastern cities requires crossing multiple RTOs (MISO, PJM), multiple states, and multiple regulatory processes. The Grain Belt Express project (proposed 2010, not yet complete) has spent over a decade in permitting across four states with no single authority able to approve the route. A comparable project in China takes 2-3 years.

The interconnection example. As of 2024, over 2,600 GW of generation (mostly solar and wind) sat in US interconnection queues, waiting 3-5 years for grid studies. Each RTO runs its own queue with different rules. Projects near RTO boundaries face dual studies. The backlog represents roughly $500 billion in stalled investment.

How much does jurisdictional fragmentation cost the US energy transition?

Princeton's REPEAT Project estimates that over 80% of the IRA's potential 2030 emissions reductions are lost if transmission keeps growing at its recent 1% annual pace rather than the 2.3% the law's potential requires. The money for clean energy exists (IRA credits). The technology exists (cheap solar and wind). What does not exist is a coordinated process for connecting new generation to the grid across jurisdictional boundaries. The coordination failure, not the technology or the economics, is the binding constraint.

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