Research from the Energy Information Administration confirms that electricity demand is high and increasing faster than the grid can keep up with—which drives up consumer costs.

Modernizing America’s energy infrastructure and stabilizing our power grid is a consumer imperative. Surging demand will require billions of dollars in long-term infrastructure investment.

The question isn’t whether that investment needs to happen, but who pays for it.  

Institutional investors can play an important role in keeping power affordable and reliable.  The Federal Energy Regulatory Commission (FERC) has long recognized and protected the need for passive institutional investors to invest in public utilities that do not exercise operational control.

Blanket authorization allows these investors to direct capital into the energy infrastructure that powers their communities.  Investors can efficiently deploy capital into utilities, expanding funding options for transmission upgrades, grid modernization, and capacity, without burdening ratepayers with the bill.

Interestingly, blanket authorization is now the vehicle that some advocacy groups have chosen to oppose the acquisition of AES Corporation by affiliates of BlackRock’s Global Infrastructure Partners (GIP) and EQT.  A recently filed protest with FERC argues that BlackRock’s growing portfolio of utility holdings conflicts with the conditions of its blanket authorization and warrants an evidentiary hearing to block or restructure the deal.

The complaint frames institutional investment in regulated utilities as a threat to the public interest.  But this logic is backwards.  AES needs capital to modernize its grid and meet fast-growing demand.  The likely alternative is aging infrastructure, reliability challenges, and rate increases.  

Notably, private ownership improves AES’s long-term financial flexibility.  As a public company, AES faced a difficult set of tradeoffs: funding the grid modernization its customers need would have meant either raising rates or reducing shareholder returns to free up capital.  Support from experienced long-term infrastructure investors resolves that tension.  

FERC has a well-established framework for evaluating these transactions: does the acquisition protect consumers, preserve competition, and keep rates reasonable?  That framework is right, and it already works.  Utilities remain subject to rate regulation and state oversight regardless of who owns them.  The regulatory accountability that protects customers doesn’t disappear when a utility is held by private investors.

Free markets, paired with sound regulation, deliver better outcomes for consumers than regulatory barriers to capital.  FERC should evaluate the AES transaction on its merits and recognize it as a viable path to grid reliability and manageable energy bills.