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same systems (e.g., ports and railways); and perform 24 hours a day, 365 days a year with high reliability, which
in turn requires both low susceptibility to disruptions and the resilience to recover quickly from whatever
disruptions nonetheless occur. The longevity and high capital costs of energy TS&D infrastructure, moreover,
mean that decisions made about how to locate, expand, and otherwise modify this infrastructure today will
be influencing—either enabling or constraining—the size and composition of the national energy system for
decades to come.
Challenges of TS&D Infrastructure Management and Policy
Much of the TS&D infrastructure is owned and operated by the private sector, and a significant portion of the
related legal, regulatory, and policy development and implementation occurs at state and local levels. At the
same time, the Federal Government controls and operates substantial TS&D infrastructure assets of its own,
including inland waterways, thousands of miles of transmission lines, and strategic oil and product reserves.
Some of the infrastructure elements owned by others are federally regulated with respect to aspects of siting,
safety, environment, and reliability. A number of emergency authorities bearing on TS&D infrastructure are
also vested in the Federal Government.
A further complexity affecting the TS&D infrastructure management and policy is that these infrastructures
often reach across state and even international boundaries, thus affecting large regions and making multi-state
and sometimes multi-national coordination essential for modernization, reliability, resilience, and flexibility.
In addition, the large capital costs, scale, and “natural monopoly” characteristics of much TS&D infrastructure
tend to perpetuate the role of incumbent providers; these circumstances constrain innovation and add to the
usual litany of market failures—public goods, externalities, information deficits, perverse incentives—generally
understood to warrant intervention through government policy when the proposed remedy is expected to
have sufficient net benefits to overcome predictable ancillary and unintended consequences.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 S-3