Legacies of electric restructuring for a new electric transition: Neoliberal paths for Canadian hydropower?

Keywords: electric markets, energy geographies, infrastructure, Hydro-Québec, Massachusetts, neoliberalism
Session Type: Virtual Paper Abstract
Day: Tuesday
Session Start / End Time: 3/1/2022 05:20 PM (Eastern Time (US & Canada)) - 3/1/2022 06:40 PM (Eastern Time (US & Canada))
Room: Virtual 29

Abstract

The current transition in our electric systems away from fossil fuels is shaped by a previous electric system transition, electric restructuring. Can the neoliberal tools we built some two decades ago—and the regulatory remnants and responses—achieve the deep environmental and social change we now seek? This article analyzes the institutional, political-economic, and geographical effects and legacies of electric restructuring, focusing on Massachusetts and New England. It analyzes five realms of change: (a) generation; (b) transmission; (c) distribution and retail supply; (d) regional wholesale markets; and (e) deregulation of electric utility corporate structure. Today’s main market tools and institutions in the electric sector are inadequate to fund long-distance transmission in the United States, despite the potential benefit to carbon reduction, as investors cannot tolerate the high financial risk. A recent effort to fund long-distance transmission to bring Canadian hydropower to Massachusetts allowed the private sector to avoid those risks. Instead, lawmakers put the cost of a new line onto Massachusetts’s electric customers, guaranteed profits to the transmission owner and the state’s still-regulated utilities, and offered multiple income streams to Hydro-Québec. Proposals were competitive but price-based decision-making favored projects that externalized costs onto other people and places, and into the future—leading to political opposition, escalating costs, and implementation delay. This history helps reveal key legacies and limits of electric restructuring and its role in decarbonization.