'Socialized' is Not a Dirty Word: Why Socialized Cost Allocation for High-Voltage Interstate Transmission Facilities Should Be the Only Method the Federal Energy Regulatory Commission Allows for Assigning Costs

Following the Federal government’s requirement that electric utilities allow other power generators to use their transmission lines, investment in the U.S. electric grid has faltered. The effects of underinvestment in the grid has limited the proper function of competitive energy markets, and stifled investment in renewable energy sources. The Federal Energy Regulatory Commission (the “FERC”) has allowed states belonging to planning regions that coordinate transmission development to create multiple methods for allocating the costs of new facilities crossing state lines. Many of these methods use models to forecast which customers in each state benefit from the facility, and then assign costs based on those determinations. This Note argues that the fluid nature of the modern grid defies attempts to assign costs so specifically, and that instead the only cost allocation method the FERC can allow that also complies with the 16 U.S.C. § 824d(a) requirement that rate determinations be “just and reasonable” is if it requires the costs of high-voltage interstate transmission facilities to be spread among all customers in a planning region.