From the Editor
Steve Mitnick has authored five books on the economics, history, and people of the utilities industries. While in the consulting practice leadership of McKinsey & Co. and Marsh & McLennan, he advised utility leaders. He led a transmission development company and was a New York Governor’s chief energy advisor. Mitnick was an expert witness appearing before utility regulatory commissions of six states, D.C., FERC, and in Canada, and taught microeconomics, macroeconomics, and statistics at Georgetown University.
I know what you’re going through. All too well. I was there too.
As CEO of a transmission development company, a little over twenty years ago, FERC required us to auction the capacity of the line we were working so hard to bring to fruition. Notwithstanding the elite financial backing we had, and notwithstanding the widespread political support we had, auctioning the capacity of a line that might be ready for transmission service in five years, or ten years, or fifteen years, or never, reminded us of the Greek myth of Sisyphus.
That’s right. It was top dog Zeus who ordered Sisyphus to repeatedly roll a gigantic boulder uphill after it would roll back down, repeatedly, as a really mean punishment.
Why did we feel like Sisyphus must have? Because an unregulated developer of transmission and generation too must first secure financing to finish the job before they can begin the job. And those who might commit to that financing must be darn sure that job will get done, and done on time, or at least done within their lifetime (exaggerating, but only somewhat).
There’s more. Those who might commit to that financing must be darn sure as well that when that job does get done, assuming it does, that the economic conditions are such that the financing was worth it.
You see? Uncertainties over uncertainties over more uncertainties. Not exactly what those folks who finance projects are craving when they put their money down.