Recent attrition raises the question: Consolidation or death spiral?
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.
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.