Public Utilities Fortnightly and POWERdat®
Douglas M. Logan is a Principal with Platts/RDI Consulting in Boulder, Colorado.
The need to invest in new and upgraded transmission has been getting a lot of airtime recently. Some big bucks likely will be spent on new facilities in the next several years.
Yet, there is another way in which investment in transmission is likely to surge in the near future - in the buying and selling of transmission assets and in the restructuring of the transmission business. It may be that the dollar volume of such financial transactions rivals that of investment in new and upgraded facilities in the next three to five years. Further, this together with continuing merger activity among utilities will increase the concentration of ownership of transmission assets.
Mergers and acquisitions in the utility industry have already resulted in increased concentration of ownership of transmission assets. Table 1 presents the U.S. transmission assets, reported by investor-owned utilities in their FERC Form 1 filings and shown in the POWERdat database, for the top 10 largest owners. The top 10 own almost half - 44.6 percent - of U.S. transmission assets. This number would be higher if federal power marketing agencies were also included.