The Energy Policy Actʹs Reliability Provisions: Uncontroversial, Yes, but Doomed to Ineffectiveness?

The electric industry grew up and matured under a regulatory regime that fostered reliable service as consistent with the service providers’ best economic interests. But changes in the focus and structure of the electric industry have put strains on that regime – as starkly revealed in the 2003 blackout. Efforts to adopt enforceable reliability standards depend on the threat of penalties to outweigh the profit incentives that undermine reliability. It is not clear that those penalties will work.