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October 01, 2017

Chair’s Column

By Peter V. Lacouture

This issue of Infrastructure contains another in the series of essays from our committees in honor of the 100th anniversary of the Section. The essay in the current edition, which is previewed in Chuck Patrizia’s column, is by the State Regulatory Committee and reviews the history of and recent developments in state regulation of electric utilities in three states. We also have an interesting article from Everett Britt that examines the aftermath of and recovery from a hurricane from the perspective of electric utilities.

In my last column (Summer 2017), I commented on the damage that was being wrought by Hurricane Harvey along the Gulf Coast, including the Houston area. Shortly after I completed that column, Hurricanes Irma and Maria struck the Caribbean and the southeastern United States, causing significant damage to property and loss of life. As I write this column, massive wild fires and significant flooding and mudslides have plagued southern California, resulting once again in massive property damage and significant loss of life. We can expect a continuing debate as to whether these disasters are a result of climate change and whether we can do anything about it. Hurricane Maria has demonstrated that the Puerto Rican electric grid was not sufficient to withstand a major Category 5 hurricane. There will also be debate as to what improvements can be made to infrastructure to withstand the kinds of natural disasters we have seen over the past six months.

I wanted to use the balance of this column to discuss infrastructure. This has been the name of our quarterly publication for many years and, in 2016, became part of the name of the Section. Infrastructure and improvements to infrastructure were important issues to both the Trump and Clinton campaigns in the 2016 election. According to an October 2016 report from Yahoo Finance, the Trump campaign proposed spending $1 trillion on a variety of infrastructure projects over ten years. The campaign did not call for tax increases to pay for the spending, but instead proposed using tax credits and equity investments in revenue-generating projects, relying primarily on private funding. The Clinton campaign had proposed a more modest $275 billion infrastructure plan over five years. This plan was focused on repairing and expanding roads and bridges, improving public transit, expanding access to broadband internet service, upgrading airports, and building additional energy infrastructure.

The Winter 2017 issue of Infrastructure contained a thoughtful article by Section member John O’Neill and several of his colleagues entitled, “Getting to There from Here: What the Trump Administration’s Infrastructure Program Might Look Like,” in which the authors suggested that if the administration’s infrastructure program were successful, President Trump could join other presidents, such as Lincoln, Roosevelt and Eisenhower, as “great builders.” In addition to expediting the review and approval of infrastructure projects, the authors suggested that the infrastructure program would emphasize “Buy American” and would promote the use of private funds for infrastructure improvements through public-private partnerships (P3s). The authors concluded that infrastructure was a high priority for the administration, although as its first year comes to a close, other issues appear to have eclipsed the infrastructure program.

In August 2017, the president issued an executive order to streamline federal environmental review and permitting for infrastructure projects. The executive order (“Presidential Executive Order on Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure”) established goals of (1) making federal environmental reviews for infrastructure projects “consistent, coordinated, and predictable” and (2) reducing the time for environmental review and authorization decisions for new major infrastructure projects to an average of two years.

However, additional action on promoting such projects has been lacking during the administration’s first year. In fact, the New York Times reports that, at the end of December 2017, the acting administrator of the Federal Transit Administration rejected a funding agreement for the $20 billion Gateway Project, which would construct two new railroad tunnels under the Hudson River to connect New York and New Jersey. The new tunnels would supplement the existing tunnels, which were built more than 100 years ago and damaged by Hurricane Sandy.

It has been said that one should base judgments on actions, not on words. It will be interesting to see whether the administration’s actions live up to the promises made during the campaign and the predictions by Mr. O’Neill et al.

By Peter V. Lacouture