Letters to the Editor / Corrections, Clarifications

Deck: 
Corrections, Clarifications
Fortnightly Magazine - July 1 2003
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To the Editor:

I read your May 15, 2003, "Frontlines" column ("Grid Glut?") and have to respectfully take issue with a couple of your thoughts.

First, the lack of strategic transmission enhancements is one of the root causes of an energy crisis we are beginning to experience in the United States. With natural gas prices above $5.00/mmBtu since February and currently over $6.00/mmBtu through March of 2004, U.S. gas and electricity customers, whose prices are meaningfully impacted by gas prices, are about to receive a real shock for the rest of this year and through the heating season of 2003-04.

This, as well as future gas price spikes, could be muted by having additional transmission capacity in place from the coal generation-rich middle United States to the East and South, thereby reducing the amount of gas used for generation in the off-peak periods and likely reducing gas prices. The soon-to-be-released Midwest ISO (MISO) transmission plan, as well as the just-released Department of Energy standard market design study, show significant electricity consumer savings if the middle United States to the East and South areas are reinforced strategically. The MISO study points out that enhancements would pay for themselves in one to four years, depending on your gas price assumption, with the shortest payback if gas prices were roughly $5.00/mmBtu.

The payback would be even shorter at today's higher gas prices.

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