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In a working paper with formal publication forthcoming, Senior Managing Director Dr. Jeff D. Makholm examines obstacles preventing a physical Dodge City high voltage direct current (HVDC) electricity hub from being created. Dr. Makholm observes that creating such a hub would foster the kind of risk transfer that would invite the full participation of the financial industry essential to the speedy development of renewable electricity and complementary storage technologies. The biggest barrier to creating a physical HVDC hub, paradoxically, is the administrative system that has evolved since the late 1990s to promote regional electricity markets. Those markets rest on concepts that abstract from geography and investment risk. Their regulatory administration lodges a kind of monopoly planning and scheduling power in a bureaucratic centralized system operator that mimics a command economy, not the kind of market economy that has traditionally driven investment in US energy infrastructure.

The continued pursuit of such a system visibly dominates recent action by the Federal Energy Regulatory Commission (FERC) in how its regional transmission organizations (RTOs) deal with the transmission constraints faced by the renewable generating sector. Such FERC action regarding its RTOs in 2022–2023 represents an evident path dependency—a problem—that state or federal policymakers wishing to speed the entry of large-scale renewable generation and complementary storage technologies must find a way to confront or to work around.

This is a working draft for publication, please do not cite or quote.

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