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Opinion

The U.S. Electric Grid as a Platform for Infrastructure Modernization

The U.S. electric grid we rely upon today started modestly well over a hundred years ago. Local power plants provided community lighting and powered public transportation. Those microgrids grew and expanded to provide electricity for homes, businesses and factories.

As the numbers and types of end-uses grew, so did the grid expanding and connecting regionally. Large federal investments in regional energy projects such as Northwest hydro and the flood and power management in the Tennessee Valley, combined with rural electrification, led to the national system that we have today. Three large interconnections with interstate transmission and a mix of public and private generation provide the United States with one of the best systems in the world and one that has been an economic engine fueling U.S. economic growth and significant advances in our quality of life.

Fast forward to 2019, and Congress has recognized that our current infrastructure, of all types, needs repairs, updates and modernization. It is clearly an interest of both political parties, and while there are significant differences in priorities and funding ideas, there seems to be growing consensus that it’s time for a major push to prepare us for the next 100 years.

The challenge lies in part with what should be done by the various levels of government in concert with industry and other stakeholders and how to identify and make no regrets for investments in the future. As we contemplate these investments, we face challenges that didn’t previously exist related to urbanization, congestion, climate and air quality and significant changes in how people live and work. The world has also become digital, allowing for the integration of physical assets and digital networks.

The public power business model is unique in its relationship with the communities and customers it serves. The direct accountability to consumers through local governance creates a strong alignment with the planning objectives of the communities being served.

Public power systems are frequently a significant resource as communities pursue economic development, environmental improvements and other essential public priorities. Communities are the building blocks of a national infrastructure program, and in the case of public power cities and regions, the electric grid is an excellent platform to support advances and investments in transport modernization, emerging technology, public safety and resilience.

Public power communities are already making significant investments in local generation and storage, energy efficiency, electrification of transportation, cyber security and resilience. To expand these investments, the federal government needs to frame a set of national infrastructure priorities, ensure access to low-cost capital and provide research and development funding, grants and incentives.

For public power, the preservation of tax-exempt bonds, restoration of advance refunding and updating of private use rules are all essential elements of infrastructure funding. Additional means of funding, such as direct pay bonds to provide additional tools and comparability with private investors, are also very important.

If the federal government establishes the overarching priorities and provides some funding and additional financial tools, just as it did over 100 years ago, the communities across the country, in coordination with their states, will make significant advancements in modernizing our infrastructure. Modernizing and hardening the local and regional electric grids is a critical catalyst in any infrastructure modernization program.

The Large Public Power Council, whose 27 members serve over 30 million electric consumers and some of the largest and most-dynamic cities and regions in the country, stands ready to serve as a critical building block in a federal infrastructure push. Our regional differences are a strength, helping to unleash innovation and creativity based on regional differences while maintaining alignment with our communities. Our strong history of collaboration and integration with local communities across the nation ensures that the investments made will be without regret.

 

John Di Stasio is the president of the Large Public Power Council, a not-for-profit organization comprised of 27 of the nation’s largest public power systems that advocates for policies that allow public power systems to build infrastructure, invest in communities and provide reliable service at affordable rates.

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