Gridlocked: Local Resilience vs. National Deregulation
The future of the U.S. electric utility industry is being shaped by a collision of ideologies
On one end, a Trump-aligned federal nomination signals a potential return to centralized energy deregulation and federal preemption. On the other, states like Oregon are forging their own path — crafting a new, community-centric energy future built on resilience, independence, and innovation.
Last week, the White House announced the nomination of David LaCerte to the Federal Energy Regulatory Commission (FERC). LaCerte is no stranger to Washington’s conservative infrastructure. His nomination suggests a sharp pivot toward the deconstruction of the administrative state, including FERC itself. LaCerte was a contributor to Project 2025, the Heritage Foundation’s blueprint for a second Trump term and a wholesale rollback of federal regulatory agencies. The Federal Energy Regulatory Commission plays a critical role in regulating wholesale energy markets and transmission infrastructure, often across state lines.
By way of background, the electric utility industry has three major components: generation, transmission, and distribution. The electric lines that bring power into your home are distribution lines. Most small utilities — such as co-ops, municipal power companies, and community aggregators — purchase electricity from generators. The chart below summarizes where U.S. electricity is generated.
FERC regulates the high-voltage systems that carry electricity over long distances. There are two main types of operators for these transmission systems: Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs). RTOs, authorized by FERC, coordinate, control, and monitor electricity transmission across a regional grid, with a focus on reliability and market efficiency. ISOs, in contrast, were created at FERC’s recommendation, rather than controlling or coordinating electric transmission, ISOs act as neutral entities responsible for managing the electric grid, typically within a single state.
To make it more complex, ISOs do not own the assets they operate. They are federally regulated, independent entities that ensure open access to electricity markets. RTOs, while also independent, govern broader regional markets and transmission operations. In short, different parts of the U.S. grid operate under different rules, though FERC oversees both. (For more detail, see Wikipedia or the FERC website.)
FERC’s decisions often supersede state authority, particularly when it comes to approving large-scale energy projects and determining who controls them. In this context, LaCerte’s background in energy litigation, his tenure at the U.S. Chemical Safety Board, and his alignment with Project 2025’s deregulatory agenda could reshape FERC’s posture on interstate transmission lines and natural gas pipelines.
As federal energy policy leans toward centralization and deregulation, some states are moving in the opposite direction.
A Microgrid Revolution
Oregon just became the first state in the nation to pass comprehensive legislation that creates a regulatory framework for microgrids, the small-scale, self-contained energy systems that can operate independently from the larger electric grid. Microgrids are localized energy systems that can incorporate a mix of energy sources: rooftop solar, battery storage, small wind turbines, and even diesel or natural gas backups.
Perhaps more importantly, they give control back to the users: towns, tribes, universities, military bases, hospitals, and even neighborhoods. Thus, microgrids aren’t just an engineering solution. They are a challenge to the central assumption that bigger is always better.
Microgrids flip the power paradigm by replacing the traditional one-way flow of electricity from distant generation plants to passive consumers with localized, two-way energy systems that generate and manage power within the community. This shift promotes resilience, with the ability to maintain electricity during wildfires, hurricanes, or cyberattacks that impact the regional grids, and agency, as communities regain control over how and where their energy is produced and distributed. Neighborhoods, tribal lands and rural coops can use microgrids to develop energy solutions that serve them better.
Microgrids are part of the Public-Owned Utility (POU) sector, and may be managed by coops, municipal or community aggregators. Dozens of microgrids are operational across California, Puerto Rico, and the Midwest, and hundreds more in development. Thus, Oregon House Bills 2065 and 2066 (which passed with bipartisan support) are more than just a legislative milestone. They are a statement of intent.
Oregon’s embrace of microgrids is rooted in lived experience. With rising temperatures, longer fire seasons, and increasing grid stress, the need for distributed, resilient power has moved from a theoretical ideal to an operational necessity. These legislative efforts make it easier to site, finance, and interconnect microgrids — and position Oregon as a national leader in decentralized clean energy strategy. As Dylan Kruse of Sustainable Northwest put it: “These bills pave the way for clean energy innovation to support community resilience, energy independence, and cost savings across the state.”
Newer technologies have helped microgrids emerge, but this shift is as much political as technological. Investor-owned utilities (IOUs) have historically resisted distributed energy systems because they threaten the centralized rate base and disrupt regulatory models designed to protect monopoly profits. But as climate-driven disasters grow more frequent and severe, even regulators are beginning to acknowledge the vulnerabilities of sprawling transmission networks and brittle mega-infrastructure.
Where IOUs see stranded assets, communities see resilience. Where utilities seek billion-dollar, ratepayer-funded upgrades, microgrids offer low-voltage, locally governed solutions that can be added faster and may be cheaper for users.
As the federal agency responsible for overseeing interstate electricity transmission and wholesale electricity markets, FERC has historically focused on large-scale infrastructure, centralized generation, and the RTOs and ISOs. This legacy framework often favors utility-scale projects and can inadvertently create regulatory barriers for decentralized systems like microgrids.
States, not FERC, regulate retail electricity. But FERC’s decisions around market access, interconnection standards, and grid resilience have major implications for distributed energy. The degree to which microgrids can scale as a true alternative to centralized power depends in part on whether FERC modernizes its rules to reflect a more decentralized, climate-resilient energy future, or clings to a top-down model that favors incumbents.
Microgrids provide a direct counterbalance to federal grid centralization. They empower local governments, tribes, utilities, and even neighborhoods to plan and operate power systems tailored to local needs and risks. This is especially true in wildfire-prone regions where public safety power shutoffs (PSPS), are being used more often. (All electrical companies, POUs and IOUs, use PSPS plans to reduce risk. Athena has products that improve the effectiveness and may shrink the area or shorten the time of PSPS, as well as other wildfire resilience tools.)
Federal Reach vs. State Resilience
Going back to the Trump administration’s recent nominations of David LaCerte, as a Commissioner (and Laura Swett’s nomination to replace Mark Christie for the Chairman position), the juxtaposition is striking.
At the federal level, LaCerte’s nomination may signal an embrace of deregulation, fossil fuel infrastructure expansion, and a rollback of environmental oversight. At the state level, Oregon is doubling down on clean energy, grid resilience, and local autonomy.
This divergence underscores a growing dynamic in the U.S. power sector: A national energy policy that is becoming more polarized and unstable, while states are increasingly acting as laboratories for resilience and reform.
The tension between centralized federal oversight and decentralized state innovation is not new. But the stakes have never been higher. With extreme weather events accelerating and energy infrastructure aging, communities need less political ideology and more ground-level solutions. Oregon is showing how to turn risk into resilience.
LaCerte’s nomination, and the broader Project 2025 agenda, may remove tools from the federal toolkit.
The Future Is Local
Ultimately, the evolution of America’s utility sector will not be driven solely by Washington appointees. It will be shaped on the ground, where the realities of climate, cost, and community safety are pushing policymakers to reimagine what a 21st-century energy system looks like.
If the federal government aims to dismantle regulatory safeguards in the name of administrative efficiency, states must be prepared to build parallel structures that protect their people. Oregon has drawn the blueprint. With increasing pressure from users and a need for more resilience and reliability, many other communities will follow.
Athena Intelligence provides geospatial profiling tools that translate vast, disaggregated wildfire and environmental data into actionable spatial intelligence — creating a digital fingerprint of wildfire risk.
Our platform supports communities pursuing energy independence, especially those developing microgrids through municipal utilities, community-owned cooperatives, or local aggregators. Athena’s wildfire intelligence can be integrated into planning tools, infrastructure assessments, and financial models — or accessed directly through our online portal.
If your community is thinking about wildfire resilience, we encourage you to become a Firewise Community and explore the WISH wildfire program designed to help neighborhoods understand and reduce their wildfire risk.
Without proactive mitigation and risk insight, wildfire liabilities can become an insurmountable financial burden.
To learn more or schedule a demo, reach out to me at Elizabeth@AthenaIntel.io, and follow us on LinkedIn or Energy Central for the latest updates.
