Sloan Foundation grant to fund research on governance of U.S. electric grid

Pennsylvania State University

UNIVERSITY PARK, PA – Seth Blumsack, professor of energy and environmental economics and international affairs, was awarded a $1,193,307 grant from the Alfred P. Sloan Foundation to sustain and expand an interdisciplinary research network focused on the regional organizations that mange the electric power transmission grid in the United States and how the governance of these regional transmission organizations (RTOs) impacts outcomes for market efficiency, sustainability, equity, reliability and resilience.

RTOs operate the transmission grid over large regions of the U.S., serving approximately two-thirds of electricity consumers in the country. RTOs are responsible for reliable grid operations, planning transmissions, and managing and designing the wholesale energy market. The Federal Energy Regulatory Commission (FERC) provides broad guidance, but each RTO has its own internal processes, including how it defines stakeholders. The interdisciplinary research network (RTOGov) studies those differences to understand the links between governance and protocols to market competition and service outcomes.

The three-year grant will be used to expand the research network’s size and scope. Research previously focused primarily on electricity markets and will be expanded to encompass other infrastructure governance issues critical to sustainable energy system transition, including transmission planning and investment and resilience of the grid to major disruptions.

“While there is a strong body of research on RTOs since their inception in 1996, there is an increasing urgency to decarbonize the grid, as well as an increased interest in resiliency to face events brought about by climate change like the Texas winter crisis in 2021, or the rolling blackouts that have occurred this past summer,” said Blumsack. “Understanding how RTOs interact with external interests, or who is in the room when they make critical decisions, is important because even a small difference in process can lead to a big difference in outcomes on how new technologies are adopted, the costs to customers or the ability for the system to withstand an emergency.”

Blumsack, who also co-directs Penn State’s Center for Energy Law and Policy, emphasized the layers of complexity, from the technological engineering feat of the electric grid to market dynamics and changing environmental factors, make analyzing RTOs a unique challenge that requires a collaborative network of researchers. In the coming three years, Blumsack seeks to double the number of researchers with a focus on studying the social impact and equity of the grid, a perspective that historically has often gone overlooked.

“The way that we engineer or the way that our markets are designed, is not handed down by some economic or technology philosopher king,” said Blumsack. “The electric grid is a great example of a socio-technical system that is essentially a reflection of all sorts of society’s preferences or biases. If you want to be able to understand, explain, and correct these arcane organizations, we need to be able to really tell the whole story, and with this grant, we’ll add more expert storytellers to the team.”

Over the next three years, RTOGov plans to continue to build partnerships through workshops and presentations to share their body of knowledge with RTOs, state and federal regulators and policymakers, while compiling the necessary data for their ongoing research.

Established in 2019, RTOGov’s short collaborative history has already led to multiple requests for advice on a new type of organization that functions similarly to RTOs, called Regional Grid organizations (RGOs). Emerging in Alaska and in the southeastern and western parts of the U.S., RGOs provide a unique opportunity for RTOGov.

“These organizations don’t get formed every day, and to have three really serious conversations going on all at the same time is a great opportunity to work with these organizations from the ground up,” said Blumsack. “There is a lot of potential to see how these new organizations are going to make good, collective decisions, how they develop governance structures, where the structures affect innovations, and what the implications to consumers are.”

Blumsack said he’s excited to build the ROTGov network based on the collaborative culture he sees every day in the department and through the Center for Energy Law and Policy.

“Faculty in the College’s John and Willie Leone Family Department of Energy and Mineral Engineering and Penn State take collaboration and energy, more seriously than just about any place on the planet,” said Blumsack. “And that’s really, really important because, to address these critically complex, difficult to navigate challenges, we need people who are really good at what they do, who can bring their unique perspectives and forge connections.”

The Alfred P. Sloan Foundation is a not-for-profit, mission-driven grantmaking institution dedicated to improving the welfare of all through the advancement of scientific knowledge. Founded in 1934 by industrialist Alfred P. Sloan Jr., the foundation disburses approximately $80 million in grants each year.

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