Gilbert Metcalf makes the case that the federal government should sweep away state regulatory obstacles to the building of a national electricity grid.
The patchwork quilt of grid regulation — based in the 50 state public utilities commissions, established when power distribution was extremely local — today poses a significant obstacle to interstate grid investment.
Regulators may respond more to minor NIMBY objections than to the benefits that an improved grid can provide the overall economy — and faraway cities. For example, in 1990, American Electric Power proposed a 90-mile project spanning the West Virginia/Virginia border. Gaining local approval and rights-of-way for the project took 13 years; constructing the line took less than three years.
Federalism, properly conceived, allows for federal action to end state interference with national commerce. Most of the major deregulatory initiatives of the last few decades have involved exactly such action.