Seth Blumsack (Penn State University; SFI External Faculty)
Abstract. For roughly two-thirds of the population of the United States, decisions on electric energy infrastructure affecting pricing, reliability and the integration of new technologies are made not by electric utilities but by entities known as Regional Transmission Organizations. These entities are notable for being highly stakeholder-driven - critical decisions and policies are set not by managers or corporate boards but emerge via a democratic process involving many distinct and divergent interests. These 'stakeholder processes' can be modeled to understand the reasons that some initiatives for reform of the power grid succeed and fail. Using highly granular voting data from PJM Interconnection, the largest of the Regional Transmission Organizations, and a simple model from the political economy literature, we are able to identify several relevant properties of the stakeholder voting process in PJM. First, a stable coalition exists among large consumers of electric power. This coalition is stable enough to prevent any potential policy change in PJM from being enacted but is not large enough to itself ensure that any favored policy change will be enacted. Second, no such stable coalition exists among power generation companies. Third, in the case of policy changes supported by the consumer coalition, their passage depends largely on a group of swing voters. In our data we are able to identify that the group of swing voters consists primarily of a small number of banks and other financial institutions. We focus on a unique case of a stalemate in the PJM stakeholder voting process to argue that an alternative stakeholder-driven structure that relies on emergent coalitions may be preferable to the current voting structure.