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"There has been a vague recognition for a long time that big transmission lines are hard to develop and get built," said Justin Gundlach, a senior attorney at the Institute for Policy Integrity at New York University School of Law who focuses on state energy and climate policy. "I think recognition is dawning that not only is this a bottleneck, this is a bottleneck for which our solutions aren't entirely clear." State electricity planners may also have to weigh siting risks of major transmission projects more heavily when comparing them against potential alternatives, Gundlach said.

Policy Integrity claimed that existing ties between neighboring systems operated by MISO and the Southwest Power Pool demonstrated the value of interregional transmission during a deadly mid-February cold weather event. Those ties allowed customers in the MISO and SPP footprints to avoid widespread blackouts, while the siloed grid operated by the Electric Reliability Council Of Texas Inc. flirted with complete collapse.

So what's a reasonable investor to think about the MOPR and state climate and clean energy policies? If nothing else, it should be clear that one is more certain than the other. A reasonable investor knows the MOPR has not been a durable construct, while state policies have long been moving in one direction. There is certainty there. Regardless of what happens to the MOPR, states are not giving up on their climate ambitions. They will continue to support clean energy technologies that are cheaper for consumers and safer for their citizens.

Yesterday’s D.C. Circuit ruling is the latest decision to rebuke FERC for inadequate climate analysis. Judicial rebukes are likely to continue until FERC fully considers the social cost of greenhouse gases in its analyses, said Richard Revesz.

Conflating economic problems has led FERC to implement inappropriately broad rules without grounding its decisions in rigorous economic analysis. The Expanded MOPR was based on a faulty premise and unsupported by economic theory. Ending the snipe hunt for state exercises of market power in capacity markets is a critical first step toward empowering stakeholders to craft durable economic solutions that allow markets to work.

Private equity firms are spending billions of dollars buying coal-fired plants on the cheap - and getting paid even when they are not providing power. So-called capacity payments are given out in most U.S. power markets, and regulators tend to favor coal-fired generators that store heaps of coal on site when other power sources might be disrupted. "The capacity power market is a certain source of revenue for coal plants that might otherwise be uneconomical," said Sylvia Bialek, an economist at New York University's Institute for Policy Integrity.

Some environmental groups are vowing to seek rigorous National Environmental Policy Act and other environmental reviews of planned transmission lines, even when they are built to facilitate low- or zero-carbon power, a strategy that may frustrate the Biden administration’s effort to accelerate reviews for such projects. “Unlike the Trump administration, which sought to prioritize environmentally undesirable projects and run roughshod on NEPA requirements in the process, the Biden administration is seeking to prioritize environmentally desirable projects but respect NEPA safeguards,” argues Ricky Revesz, director of the Institute for Policy Integrity at New York University.

"The question is, do the folks in charge at the Energy Department and does FERC really want to push this and risk the backlash?" said Alexandra Klass, a law professor at the University of Minnesota. "Maybe the answer is yes." A December paper from the New York University School of Law's Institute for Policy Integrity and Columbia University's Center on Global Energy Policy concluded that needed long-distance transmission can be developed by applying existing federal legal authorities.

When more renewable energy comes online, power storage facilities that Canada’s reservoirs provide to the U.S. grid should become even more valuable. “There’s this version of Canadian hydro not only being firm (capacity) but being something like a battery. That’s the big picture informing the vision of some policymakers,” said Justin Gundlach, senior attorney at the New York University School of Law’s Institute for Policy Integrity.

Customers were at the center of a panel discussion last week, hosted by the Institute for Policy Integrity and the Environmental Defense Fund, that highlighted what can happen when new state climate laws conflict with those currently governing fossil fuels. The discussion stemmed from research by Justin Gundlach and Elizabeth Stein, which casts light on policies under New York’s Climate Leadership and Community Protection Act (CLCPA) that are inconsistent with other state polices that support residential customer access to natural gas.