[BETA] Fortnightly

His company, he admits, is all about cherry picking.

This issue we took some time off to have some fun. We caught up with Trans-Elect president and COO Bernie Schroeder in downtown D.C.

We wanted to learn the latest on who's buying, selling, and churning assets in the transmission world. And Bernie did not disappoint. As Schroeder puts it, Trans-Elect is "all about cherry-picking."

Trans-Elect can be fun to watch. In just two short years, it has gone from shoestring to front page-from scrounging some funds from teacher's pensions to buying some power lines up in Alberta, to seeing its CEO, Fred Buckman, named by in January as one of its top entrepreneurs of the year.

And with Trans-Elect staking out ground as one of the first companies to get into the merchant transmission biz, they are taking advantage-buying up just as many properties as they can. That's the business model, in fact. Interconnection can come later.

Trans-Elect states its goal right up front: buy two transmission systems a year, at a minimum. The key, Schroeder explained, is to find the sellers, which is why it took some time to talk to him in person-he always is flying around the country scoping out the next deal.

"The strategic advantage by geography is something we really have to create," he said.

"In a perfect world you would buy the most ideal, centralized grid and then begin buying the contiguous lines next to them-but it doesn't work that way."

The heaviest area of concentration for Trans-Elect at present, he added, is the Midwest and Southeast.

Playing for Path 15

Schroeder said that Trans-Elect is pursuing development, ownership and operation of Path 15, the notoriously constrained transmission area in northern California. When the U.S. Department of Energy issued its initial request for proposal (RFP), somewhere between 13 to 15 entities filed to buy the assets. Nine were selected. That meant that some individual bidders would receive small ownership shares.

"We were surprised," says Schroeder, who said that a 9 percent stake was not large enough for Trans-Elect to take part. He wanted a larger interest.

But then some bidders began dropping out. (Some, in fact, were likely acting only as placeholders, Schroeder notes.) Now Trans-Elect has 83 percent of the deal and the Western Area Power Administration has the rest. And now that Schroeder and Trans-Elect see critical mass, they are very "intrigued" about taking part.

Schroeder believes that so many entities dropped out since they were generators and financial players, who likely were interested in the capacity, while Trans-Elect was the only transmission line operator that bid and was truly interested in running the line. Schroeder adds that the estimated project cost totals some $306 million, a bit more than Trans-Elect's recent purchase of the Consumers Power transmission system (Michigan Electric Transmission Co.) for $290 million. Trans-Elect has about 6 to 9 more weeks before they must make a final decision on whether to proceed with the Path 15 project.

Dialing for Dollars

And what about those pension funds? Well, Schroeder says that Trans-Elect