Oct. 14 (Bloomberg) -- A $75 billion investment in a high- voltage ``backbone'' for the U.S. electric grid could cut oil consumption in half by powering plug-in hybrid cars and displacing the use of home heating oil, a study showed.

A 21,000-mile (33,788-kilometer) national grid could help move power across the U.S. and reduce prices, Peter Huber, senior fellow for the Manhattan Institute, a New York City-based policy research firm, wrote in his report entitled ``The Million-Volt Answer to Oil.''

A national high-voltage grid could serve as a technology- neutral, fuel-neutral ``stock exchange of our energy economy,'' Huber said today at a conference in Washington.

U.S. Energy Secretary Samuel Bodman last month said a high- voltage transmission system could have ``extensive'' benefits, including helping to bring wind and solar power from remote areas to serve major cities.

``It would be the electrical equivalent of the interstate highway system,'' Bodman said in a Sept. 24 speech. ``Today, by comparison, we have some high-voltage lines in some areas, but they are not integrated into a network.''

``The more you electrify, the more you smooth out supply and demand, and you get downward pressure on prices,'' said Huber. ``Our grid weaned itself from oil almost 30 years ago'' during the 1973-1974 Arab oil embargo.

Getting a national grid would require greater federal government permitting authority, Huber said. Utilities that are already building interstate power lines, like American Electric Power Co., would be the ones to build the national grid without government payments, he said.

Environmental Concerns

Former New York Governor George Pataki called for the federal government to take over permitting of all power lines rated at 745 kilovolts or above.

``This is I think one of the most important issues facing our country going forward,'' Pataki told reporters today after speaking at the conference, hosted by the Manhattan Institute.

Congress in 2005 granted the Federal Energy Regulatory Commission authority to permit interstate lines if a state regulator rejects a project in a region designated as ``congested'' by the Energy Department. Some lawmakers, including members from New York, have called for the repeal of that authority.

Environmentalists have some reservations about a national grid because it could be used to send more coal-fired power, which contributes to global warming, said Ashok Gupta, air and energy program director for the Natural Resources Defense Council.

`Complex' Behavior

State regulators aren't the only hindrance to large multi- state power lines, said Ashley Brown, former commissioner for the Public Utilities Commission of Ohio and now the executive director of Harvard University's Electricity Policy Group.

Incumbent utilities may not look kindly on major transmission lines bringing competing power supplies into their service territory, he said.

``It's more complex than how states behave,'' said Brown. ``It's also how market participants behave.''

To cut oil consumption, idle capacity at power plants could fuel plug-in hybrids during times when electricity demand is low, and a 10 percent boost in generation output could be used to replace the use of home heating oil, according to the report.

``If a backbone grid allowed the average plant to be fully used an average of 15 hours a day rather than the current 12, the average capital-related cost of electricity would drop 20 percent,'' according to the report.

The investment would add an estimated 0.3 cent to the average 9 cent cost of electricity for a kilowatt-hour, Huber said.

``Overlaid on the existing, fragmented system, a backbone grid would let cheap power chase high demand around the clock and across the country,'' according to the report.

To contact the reporter on this story: Tina Seeley in Washington at tseeley@bloomberg.net.

Last Updated: October 14, 2008 14:27 EDT