The Arthur L. Irving Institute for Energy & Society

The United States has the technology to significantly expand grid capacity. It has not yet fully developed the financing structures, regulatory frameworks, or political alignment to do so at the speed and scale the energy transition demands. This has created a bottleneck slowing the grid expansion needed to meet once-in-a-generation increases in electricity demand. How do we fix broken structures to create the transmission system that America needs today?

That question anchored a panel convened September 24 at Climate Week NYC by Dartmouth's Irving Institute for Energy and Society, which brought together regulators, investors, operators, and policy strategists to examine the structural, financial, and political obstacles standing between America and the grid it needs now. The discussion was held under the Chatham House Rule, so comments below are not attributed to individual speakers.

A Panel of Experts

The panel was moderated by Abigail Ross Hopper '93, Distinguished Industry Fellow at the Irving Institute. She was joined by Willie Phillips, former Chairman of the Federal Energy Regulatory Commission and now an attorney at Holland & Knight; Caroline Choi '90, EVP of Public Policy & Corporate Affairs at Southern California Edison and Edison International; Chris Murphy '07, TU'13, Partner at Greenbelt Capital Partners; and Theodore Paradise, Chief Policy & Grid Strategy Officer at CTC Global.

A Decade to Build What Could Take Months

The panel opened with a celebration of some progress. Earlier that same day, in Allentown, Pennsylvania, Secretary of Energy Chris Wright had announced SPARK, a federal initiative that will support reconductoring and other advanced transmission technology upgrades to help address the "speed to power" problem that has dominated energy conversations of late. Panelists framed the announcement as a stake in the ground for technology that has already been proven globally. Advanced conductors have been deployed worldwide, though uptake has lagged in the U.S. because current incentive structures haven't caught up with the technology.

That mismatch reflects a system in which utilities plan in three-, five-, and ten-year increments, and in which the caution that served the grid well for a century has become a liability to growth. Rising demand from data centers, electrification, and reshored manufacturing, panelists said, has made the old pace untenable. One speaker cited this year's North American Electric Reliability Corporation (NERC) "red report" on reserve margins as evidence that the costs of moving too slowly are already being felt.

Technology Isn't the Problem, Execution Is

One challenge is that while regulators can set frameworks, they don't put steel in the ground. Panelists pointed to siting delays, gamesmanship in interconnection queues, and supply chain bottlenecks as examples of the obstacles to faster deployment. The Federal Energy Regulatory Commission's Order 2023—which shifted the grid connection process from "first-come, first-served" to "first-ready, first-served"—was credited as a meaningful step to tighten timelines, but panelists agreed that regulatory practice as a whole hasn't caught up with the pace the moment demands.

One tangible policy lever discussed was a FERC show-cause order issued this past summer, requiring utilities to justify why they aren't using best-available grid technology in planning. Panelists saw this as a potentially significant movement toward shifting away from a risk-averse culture that has historically rewarded utility engineers for following established protocols rather than adopting new ones. Panelists noted that the industry's internal incentive structures have long prioritized process adherence over innovation, a legacy of an operating culture built around maximizing reliability.

Who Pays for Grid Updates

The discussion turned on the question of large-load customers, particularly data centers, and how their demand for fast interconnection could help finance broader grid upgrades. Panelists agreed that those driving new demand should help pay for the grid upgrades needed to support it. A "beneficiary pays" principle could guide new rate structures, including special rate classes for data centers. Panelists also emphasized the broader social value of connecting large loads to a shared, reliable grid rather than isolating them, since an interconnected system strengthens reliability and resilience for all customers.

There is a real concern that heavily capitalized industries, if denied fast interconnection, will simply go behind the meter, building their own generation and bypassing the grid entirely. Panelists noted that this challenge can be turned into an opportunity: large loads' need for speed could be leveraged to justify investment in advanced conductors and dynamic line ratings that benefit the whole system.

Still, the ratemaking process itself remains an obstacle. Utilities earn returns on capital investment, which means technologies that save money on capital spending haven't historically been easy to sell to those responsible for maximizing shareholder returns. The problem is urgent enough that some large customers are now actively offering to pay for upgrades themselves.

A Public Trust Deficit

Panelists raised the issue that the public's eroding trust in institutions, from media to government, extends to regulators and utilities as well. Grid infrastructure is largely invisible, one panelist observed. Consumers only notice it when something goes wrong, and after a century of building trust, confidence in energy system operators' ability to provide timely, affordable, and reliable electricity is now being eroded across politics and media alike. A question from the audience about a grid operator's reputational struggles (PJM) prompted panelists to argue that operators must do three things: educate policymakers, educate regulators, and educate consumers, particularly when reliability tradeoffs are involved.

Panelists also flagged transparency around data center development as a specific trust problem. NDAs and closed-door project development—standard practice in the confidential site-selection processes many large corporate customers require—create the appearance of favoritism even when outcomes can ultimately benefit all ratepayers by putting downward pressure on rates. One panelist pointed to a small, 50-megawatt data center project that was rejected by a local community as an example of how a lack of transparency can derail otherwise beneficial projects.

Financing the Transition

On the capital side, panelists described strong investor appetite for grid-related infrastructure, but also structural friction. Growth equity investors are increasingly backing mature, fast-growing businesses tied to grid hardware and services. Still, misaligned incentives within a highly regulated market structure were cited as a persistent obstacle to investment.

Panelists also discussed where policy leverage actually sits, whether at FERC, in Congress, or at the state level, and agreed the honest answer is all of the above. Federal tax credit structures were called out as uneven in their usefulness: some utilities cannot use tax credits directly and must rely on financing partners to monetize them.

One panelist offered a historical parallel: just as the federal government treated the interstate highway system as a national security asset under President Eisenhower, transmission and generation infrastructure deserves the same designation and the same scale of federal investment.

Distributed Resources and Rate Design

The conversation also turned to distributed energy resources and how rate design shapes their growth. Before rooftop solar was widespread, many states used net energy metering programs, which credit customers for excess solar power sent back to the grid, to incentivize installations.

Today, newer rate design structures function as a form of demand response: by pricing electricity higher during peak evening hours (roughly 4 to 9 p.m.) and lower during sunny midday hours, utilities create a price signal that encourages customers to shift flexible usage, such as EV charging, to times when solar generation is abundant, reducing strain on the system during peak demand.

Investors on the panel described strong and broadening demand for distributed generation products, from solar to behind-the-meter batteries, driven in part by grid bottlenecks that make distributed alternatives more attractive to developers serving a range of customers. Illinois and New Jersey were cited as states where this market has grown notably in recent years.

The Case Against Going It Alone

Asked whether data centers could simply operate as independent microgrids, panelists were skeptical. Large projects like a 2.7-gigawatt islanded natural gas project in Texas and the repowering of Three Mile Island were described as fallback options born of frustration with slow interconnection timelines, not preferred outcomes. Achieving 99.999% reliability, panelists argued, still requires the interconnected grid; going it alone means effectively becoming your own utility, with all the cost, complexity, and regulatory compliance that involves. Distributed resources and onsite generation work well, one panelist noted, because they can operate in concert with the grid, not in isolation from it.

Grounds for Optimism

Despite the frustrations aired throughout the discussion, panelists uniformly ended on a hopeful note. Core technologies needed to expand grid capacity, from advanced conductors to dynamic line ratings, exist today and have been proven at scale internationally.

Panelists also pointed to artificial intelligence as a near-term tool for cutting through bureaucratic bottlenecks. Evaluating a single advanced conductor project today can take roughly three months and $300,000, a process panelists described as ripe for AI-driven acceleration, given that the underlying variables are well-defined engineering calculations. With the right partnerships, panelists agreed, AI could help meaningfully shorten transmission permitting queues in the years ahead.

The panel's closing consensus echoed its opening tension: the technology to expand grid capacity already exists. What remains is the harder work of aligning financing, regulation, and public trust to build the grid America needs now.