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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

increases in transmission investment (see Figure 2) offer some optimism about the future of transmission capacity in the United States.

Interpreting these trends is difficult because details on the types of transmission construction and the problems these investments are meant to solve are not available. While I consider these trends troubling, others might view them as an indicator of increased efficiency of transmission usage or a consequence of the recent construction of gas-fired generation close to load centers.

This data and these projections provide useful indicators of the state of transmission grids in the United States. However, they are not necessarily accurate measures of transmission adequacy because of the factors listed in the sidebar on page 53. Unfortunately, no better regional and national information on U.S. transmission systems exists.

Other analyses indicate that the transmission investments planned for the next several years may not even be enough to replace today's aging infrastructure, let alone meet growing demand: "The evidence suggests that investor-owned utilities have reduced transmission and distribution spending to bare-bones levels, that spending will have to rise significantly in the near future in order to meet the needs of customers, and that the higher level of spending will trigger rate hike filings in order to cover the costs of the new capital." 16 And U.S. transmission investment as a share of electric revenue declined from 10 percent in 1970 to 6 percent in 1975, 4 percent in 1980, and just over 1 percent from 1985 through 2000. 17

Given the value of this NERC and EEI information, more time and attention should be devoted to ensuring complete reporting by all transmission owners, expanding the data collected to cover facilities that add capacity but do not add mileage to the transmission system, verifying the accuracy of the data, analyzing it, and reporting the results of these analyses. Although the Energy Information Administration (EIA) and FERC collect data on past and projected transmission facilities, neither cleans the data nor publishes summaries. This situation should change even though tight budgets limit what can reasonably be done. EIA proposes to expand its data collection on Form EIA-412 to include "transmission system upgrades" on existing lines (, reconductor line, install dynamic thermal rating, install capacitors, or install reactors) and terminal stations (, transformer, bus bar, protection system, or switchgear). 18

Endnotes

  1. T. Mullen, "Is $27.5 billion enough?" , 4, Fall 2003.
  2. S. Huntoon and A. Metzner, "The Myth of the Transmission Deficit," 141(20), 28-33, Nov. 1, 2003.
  3. E. Hirst and B. Kirby, , Edison Electric Institute, Washington, D.C., June 2001; U.S. Department of Energy, , Washington, D.C., May 2002. E. Hirst and B. Kirby, Letter to the Editor, 141(22), 12, December 2003.
  4. D. White et al., "The 2003 Blackout: Solutions That Won't Cost a Fortune," 16(9), 43-53, November 2003.
  5. Edison Electric Institute, , Washington, D.C., May 2003.
  6. North American Electric Reliability Council, , Princeton, N.J., November 2003.
  7. These values are as of Dec. 31 for the year stated, , from the end of 1989 through the end of 2002.
  8. Investor-owned utilities own about three-fourths of the