Regional Cooperative Federalism and the U.S. Electric Grid

The U.S. Constitution makes no direct mention of regional governing entities, yet they are an entrenched part of our federalist system. In the area of electric grid governance, the federal government enlists independent, private entities called regional transmission organizations (“RTOs”) to implement federal policy and achieve state energy goals. RTOs are the most prominent form of regional cooperative federalism, and other policy spheres, such as opioid control, also incorporate a similar regional approach. These types of regional governance structures are a twist on the classic form of cooperative federalism, in which the federal government relies upon individual states to achieve federal mandates. The regionally governed electric grid is a critical policy area. The availability of reliable electricity directly drives economic and human health outcomes, and populating the grid with clean sources of electricity while maintaining grid reliability is urgent. The use of regional cooperative federalism in this area therefore calls for a fresh look at federalism principles. Many RTOs are geographically massive; the largest RTO covers all or part of the territories of fifteen states. In many ways, RTOs better serve the core federalism principles ascribed to more decentralized governmental control, including policy experimentation and innovation, efficiency, and accountability to stakeholders. Some RTOs have been particularly innovative in formulating new policies to address changing circumstances, such as demand for more renewable energy. But in the accountability sphere, other RTOs have struggled to address stakeholder needs. Regional cooperative federalism will be increasingly important in a world of complex policy issues that spill beyond local and state lines yet require locally tailored solutions. This Article constructs a normative framework for analyzing the successes and failures of this underrecognized approach, using the attributes of federalism as guideposts, and suggests a path forward for productively expanding and improving this governance form.