U.S. Electricity Generation: Prepare for Major Developments

The country and the energy industry are in the middle of what could very well be a time of major change according to one energy expert.

Kate Marks (MRLS graduate, 2009), who is Managing Director of the National Association of State Energy Officials, and I met several days ago. Ms. Marks, who formerly headed the energy division at the National Conference of State Legislatures, is extremely knowledgeable about the challenges and opportunities on the horizon. And she has to be -- she advises the state energy officers in the 50 states and assorted territories. One issue of key importance in Ms. Marks's opinion is transmission.

She began our conversation by pointing out:

"Initially the power system was distributed and generators were located where electricity was used. This all changed in the 1890s when stronger transmission lines were developed that could transfer electrons much longer distances. The economics and ability to serve more people with more power led to consolidation of the smaller, more distributed generation companies into large monopolies. States in turn extended their regulatory power from railroads to electricity, and by 1914 43 states regulated electric utilities. Twenty years later, the federal government passed the Federal Power Act giving the Federal Power Commission jurisdiction over wholesale power sales and interstate transmission."

Nevertheless, the matter of the siting of interstate transmission lines -- and related issues such as planning and paying for these lines -- has traditionally been handled at the state level. Does this approach remain logical in today's world where more renewable sources are being talked about and developed? This is just one of the issues she is working on.

Another is the role of renewable portfolio standards (RPS) as a means of encouraging the integration of new renewable sources into utilities' generating portfolios. To date, more than half the states have adopted RPS's, but there is no federal standard.

Despite its rather low-profile image the electricity sector is enormous, accounting for nearly $350 billion in retail sales in 2007 according to the Energy Information Association. And yet the electricity sector is confronted by enormous challenges.

Individuals such as Kate Marks are helping establish the blueprint for what America's energy future will look like. It is an exciting time to be involved in these issues, and Ms. Marks is right in the middle of them.