Transcos Reborn

Deck: 

Recent attrition raises the question: Consolidation or death spiral?

Fortnightly Magazine - July 2005
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When GridAmerica LLC closes its doors at the end of this year, the number of independent transmission companies (transcos) in the United States will fall by one-fourth. Only three ITCs will remain: American Transmission Co. (ATC), International Transmission Co. (ITC), and Trans-Elect Inc.

Workers erect a new transmission tower in California's Path 15 upgrade, developed and financed by Trans-Elect.

GridAmerica’s demise follows a string of misfortunes for U.S. transcos. In late 2003, for example, a consortium of utilities in Minnesota, Iowa, and other states abandoned an initiative to create a new transco called TRANSLink. A 2002 deal that Illinois Power inked to spin off its transmission assets to a Trans-Elect subsidiary ended with a federal lawsuit and settlement in early 2004. And proposals to create transcos in the Southeast have run aground on independence and control issues. No proposals for stand-alone transcos since have  emerged.

Such attrition raises tough questions about the outlook for the budding U.S. transco industry.

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