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Fortnightly Magazine - November 1 2003

The Myth of the Transmission Deficit

The grid does not need a Marshall Plan for new investment.
Steve Huntoon & Alexandra Metzner

The grid does not need a Marshall Plan for new investment.

We don't know what caused the Aug. 14 blackout, but somehow we know that our transmission system needs $50 billion to $100 billion in investment and upgrades. And utilities need higher returns to raise that kind of money. Talk about making lemonade out of lemons.

The reality is that we aren't short $50 billion or $100 billion in our transmission system. The study said to support that proposition just doesn't do the job.

The Near-Term Fix

How to mitigate transmission risk before the next big blackout.
Ralph G. Loretta & James E. Anderson

How to mitigate transmission risk before the next big blackout.

By now there has been much industry analysis and finger-pointing over what happened on Aug. 14. Will we get a definitive answer to why the lights went out in the Northeast, Midwest, and Canada? Even after we've identified all the causal factors, the most important question to be asking ourselves as an industry is, Why?

Frontlines

It would join an RTO but dictate the terms-a dangerous game that has the industry talking.

Richard Stavros

It would join an RTO but dictate the terms-a dangerous game that has the industry talking. When I talked a few months ago with AEP President and CEO Linn Draper Jr., he discussed how his company would have joined the PJM RTO in March were it not for the backlash he was getting from certain state regulators.

People

New Positions:
We welcome submissions to People, especially those accompanied by a high-resolution color photograph. E-mail to: photos@pur.com

People

New Positions:

The Nuclear Energy Institute elected Stephen R. Tritch and Mark F. McGettrick to its board of directors. Tritch is Westinghouse Electric Co. president and CEO, and McGettrick is president and CEO of generation at Dominion Energy.

Paul B. Vasington, former chairman of the Massachusetts Department of Telecommunications and Energy, joined the Analysis Group as vice president, based in the company's Boston office.

Letters to the Editor / Corrections & Clarifications

Correction
Fortnightly

Letters to the Editor / Corrections & Clarifications

To the Editor:

In a letter to the Oct. 1, 2003, , a letter from Lewis Evans and Kevin Counsell claims that a "pay-as-bid" day-ahead market would produce prices comparable to real-time prices even if loads understated their demand day-ahead, eliminating the incentive to underschedule (as allegedly happened in California).

Perspective

Hopes and dreams sag and fail, like an overheated power line.
Richard D. Cudahy

Perspective

Hopes and dreams sag and fail, like an overheated power line.

The big blackout has reinvigorated the debate about deregulation, snaring hopes and dreams and bringing them back to Earth. For there can be no doubt that electric restructuring, through its emphasis on market prices and market incentives-but none for transmission-contributed mightily to the recent collapse.

Benchmarks

A hypothetical look at moneymakers across regions.
Brandon Owens

Benchmarks

A hypothetical look at moneymakers across regions.

Commission Watch

Irregular seams affect ratemaking policies.
Lori A. Burkhart

Commission Watch

Irregular seams affect ratemaking policies.

In a case that marks the first time the Federal Energy Regulatory Commission eliminated inter-RTO rate pancaking, the commission in late July issued an order terminating regional through-and-out rates (RTORs) charged by two regional transmission owners (RTOs)-Midwest Independent System Operator (MISO) and PJM Interconnection. The decision removes an estimated $250 million in yearly fees collected by those two entities.

Business & Money

Wall Street bankers say utilities are not effectively telling their story.
Richard Stavros

Business & Money

Wall Street bankers say utilities are not effectively telling their story.

Technology Corridor

Reliability demands will drive automation investments.
Michael T. Burr

Technology Corridor

Reliability demands will drive automation investments.

In the days and weeks following Aug. 14, 2003, politicians scrambled to assess blame for the blackouts that plagued the United States and Canada.

Even today, as the blame game proceeds, the precise cause of the grid's collapse remains uncertain. But Republicans, Democrats, and the utility industry alike seem to agree on one thing: the U.S. power grid needs major investment.

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