The failure of the Empire Connection spells trouble for private transmission projects.
It's at the very heart of all policy initiatives for both electric generation and transmission: How do you attract the right amount of investment without creating an overbuilt market, or a boom-bust scenario? In recent months, utility executives, financiers, and policy-makers have been asking this question with even greater zeal than usual.
Consider two recent high-profile efforts: one a regulatory initiative for more power plants that is still pending, the other a private initiative for a new transmission line, which failed in spectacular fashion. Each has raised discussion and debate over what is truly needed to encourage investment in large-scale electric infrastructure.
First, New England's recent initiative to create a radical new locational market for electric generating capacity has taken the industry by storm. In this month's "Commission Watch" column, Bruce Radford analyzes the issues surrounding this effort (see "LICAP and its Lessons: A Kink in the Curve").