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The dramatic blackouts in the Midwest and Northeast in August of 2003 have focused our
attention on electricity policy once again. This time the issue is the grid\u2014the transmission network
that transports electricity across regions. Our policies governing electricity transmission\u2014
regulating it and moving slowly toward changes to support competitive wholesale electricity

study provides an analysis of the institutional changes being proposed and debated, particularly FERC\u2019s RTO policy. By establishing RTO rules, FERC can move the industry toward building and managing a national grid network. But at the same time, FERC risks creating an ordered

evolution based on choices and change over time. While ordered competition through the RTO structure could simply be a step to move the industry toward an institutional structure in which a competitive order can emerge, it is at best only part of the legislative and regulatory changes that

Our recommendations encourage the use of distributed generation technology, innovative forms of
contracting, and other institutional and technological changes that would increase the
contestability of the transmission segment of the electricity value chain, and could do so in a