The Gov Should Not Pay For New Transmission Lines

In Washington, the exploration of building a $80 billion “transmission superhighway” is under discussion. The main sticking points are who pays for it and how much of the electricity run through it is from renewable sources, reports EE News.

Predictably, energy companies with a vested interest in non-renewable energy sources are against forcing the new grid to support a fixed percentage of energy from wind power or solar. Some people are worried that building a new grid will merely help the coal industry. Sen. Harry Reid proposed that any new grid build out must transport 75% of its energy from non-carbon sources. A worthy idea, as the Senate wants to promote alternative energy investment, but it is an idea that will not likely pass.

The more important question is who pays for the grid. Right now that’s still up in the air. The government is in a tight spot. It clearly wants to support a new grid, but doing so could disrupt current industry players. For instance, EE News relays that, “PJM Interconnection, the grid operator for an area stretching from the mid-Atlantic region to Chicago, estimated that congestion added $2 billion to power costs in 2008. Upgrading the system with new high-voltage transmission lines would reduce congestion charges to $200 million.” The people that earn money off the congestion aren’t going to like seeing money leave their pockets.

However, the government doesn’t need to spend any more money this year on private industry. Between bank bailouts, stimulus plans, wars we’re not exactly in the best position to cut many more big checks. Especially when it would go to something will earn a tidy sum for a smart enterprise. We hope the government stands firm, gets more transmission lines built, but doesn’t foot the bill. The smartest thing would be a compromise that forces power companies to commit to renewable energy sources in exchange for government support of grid construction.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.