Zachary Liscow is a professor at Yale Law School and former chief economist at the Office of Management and Budget. Joseph Shapiro is a professor at the University of California at Berkeley.
As the Senate takes up a landmark permitting overhaul next week, lawmakers will be asking themselves a simple question: What happens if we make it easier to build interstate power lines? They don’t have to wonder about the answer. Congress ran a version of that experiment nearly 80 years ago.
The Bipartisan American Affordability and Jobs Act is the most comprehensive permitting bill Congress has ever seriously considered. Nineteen former economic and national security officials, including former treasury secretaries Janet L. Yellen and Steven Mnuchin, sent a letter to congressional leaders calling the bill “the most significant bipartisan legislative effort that Congress has undertaken in decades” to address America’s permitting challenges.
“Our inability to build threatens our national security and economic growth,” they wrote. It takes more than four years for a new power plant to move from requesting grid connection to producing power, more than double the wait time in the early 2000s. Families pay for these delays when cheap power can’t reach them.
The bill’s opponents have raised environmental concerns, and senators are weighing those against the legislation’s potential upsides — one of which is the effect of removing barriers to transmission-line construction. So far, most estimates of that payoff have come from models making forward-looking guesses.
But better evidence comes from an earlier time Congress tried this.
In 1947, Congress gave natural gas pipeline companies the power of federal eminent domain, preventing a single state from blocking the construction of a pipeline running through it. Oil pipeline companies were not granted the same power.
Both industries were riding the same postwar boom. But, according to a new paper we coauthored with Heidi Williams, annual additions to gas pipeline mileage rose to nearly six times the pre-1947 baseline, while oil pipeline construction stayed steady. Congress gave long-distance gas infrastructure a federal override, and construction boomed.
Today, electric transmission works the way oil pipelines did then. An interstate gas pipeline has its route approved by one federal regulator often with the authority to largely override a holdout state. An interstate power line, however, typically needs approval from every state it crosses. That gives each state a veto over projects in which the benefits often flow mostly to its neighbors.
New England has experienced the consequences. In 2016, Massachusetts attempted to import Canadian hydropower. New Hampshire, which would have hosted the power lines without getting the same influx of cheap energy, rejected it. A second route through Maine was blocked in a referendum and didn’t deliver power until January. Meanwhile, Massachusetts households paid some of the highest electricity prices in the country.
Texas is an example of what construction looks like when other states can’t interfere. Its grid sits almost entirely inside its own borders. In 2005, Texas set out to connect its windiest regions to its biggest cities, ultimately stringing more than 3,500 miles of transmission. Between 2009 and 2014, the share of wind power going to waste fell from 17 percent to 0.5 percent. The new wind power also cut the premium that fossil fuel plants could charge at peak hours, reducing their excess profits by $237 million a year, according to one study. Texas now generates more wind and solar power than any other state, nearly twice California’s total in 2024.
Some environmental advocates will read the 1947 history as a warning: Give Washington a veto over states, and you get more fossil fuel infrastructure. But they have it backward. Since 1947, interstate gas pipelines have been able to use federal eminent domain to bypass holdout states. Because transmission lines don’t have the same override, today’s siting rules tilt toward gas and away from renewable energy.
A gas plant can be built near the city it serves, with its fuel arriving by pipeline. But the best wind and solar resources are often hundreds of miles from population centers, and their power has to travel by transmission line. According to Lawrence Berkeley National Laboratory, roughly 85 percent of the generation and storage capacity seeking to connect to the grid is from solar, wind and batteries. How much of those clean-energy resources get tapped depends heavily on whether transmission lines can be built.
For nearly 80 years, gas pipelines have been able to get past holdout states. Beginning Nov. 9, senators will decide whether power lines can, too.
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