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Transmission Investment: All Talk and Little Action

Except for local reinforcements and new generation interconnections, few transmission construction proposals are moving forward.
Fortnightly Magazine - July 2004

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Projections of the Future

Each year, as part of its annual reliability assessment, NERC issues its . This database shows planned transmission-line additions for each of the following 10 years, from 2003 through 2012 for the latest version (see Figure 4).

The projections are consistent with the historical data: Both show continuing declines in normalized transmission capacity. Between 1992 and 2002, 9,600 miles (7,300 GW-miles) of transmission were added; between 2002 and 2012, an additional 10,400 miles (10,300 GW-miles) are expected to be added.

Although normalized transmission capacity declined by almost 19 percent between 1992 and 2002, it is expected to drop by only 11 percent during the following decade (2002 to 2012). In other words, transmission capacity is expected to continue to decline during the coming decade, but at a slower rate than during the past decade.

The NERC data and projections show results for each of the 10 reliability regions as well as for the United States as a whole (see Figure 5). Between 1989 and 2002, normalized transmission capacity declined in all 10 regions by amounts ranging from 14 to 27 percent. The largest declines (more than 25 percent over this 13-year period) occurred in SERC and NPCC. The smallest declines (less than 20 percent) occurred in MAPP, Southwest Power Pool (SPP), and WECC.

Over the next 10 years, normalized transmission capacity is expected to vary from +2 percent (NPCC) to -18 percent (FRCC) across the regions. All but one region (NPCC) projects declines in normalized capacity, with the largest drops (more than 15 percent) expected in MAAC, MAPP, and FRCC.

Because the individual transmission-owner reports show that almost 70 percent of the new transmission lines are to be built during the first five years of this 10-year period, the projections for 2007 might be more meaningful than those for 2012. Between 2002 and 2007, normalized transmission capacity is expected to vary from +8 percent (NPCC) to -10 percent (MAPP). Three regions (ERCOT, SPP, and NPCC) show expected increases for this initial 5-year period, while four regions (SERC, MAAC, FRCC, and MAPP) show declines of 5 percent or more.

Of the 416 transmission projects planned for the next 10 years, 14 95 percent are shorter than 100 miles, with an average length of only 18 miles. These numbers suggest that most planned transmission projects are local in scope and are not intended to address large regional issues. The 21 longer projects (5 percent of the total) average 170 miles in length.

Table 2 shows growth in transmission capacity and summer peak demand for three decades: 1982-1992, 1992-2002, and 2002-2012. Although transmission capacity increased during each decade, growth in peak demand was always greater. The gap between the two growth rates was greatest during the middle decade (a 2.1 percent per year decline in megawatt-miles/megawatt demand versus 0.9 percent and 1.1 percent declines in the first and third decades). 15 These trends are roughly consistent across all 10 reliability regions. This planned reduction in the transmission-capacity gap combined with the recent