ENERGY FACTS
An educational series designed for policymakers
Energy Infrastructure: Electricity Transmission Lines
“ In some areas of North America, transmission systems are reaching
their limits…resulting from increased electricity transfers and
customer demand increases.”
– North American Electric Reliability Council, October 2002
•
Electricity travels at nearly the speed of light, arriving at a destination at almost the
same moment it is produced. It cannot be stored easily or economically.
•
Unlike oil or gas in a pipeline, electricity cannot be directed along a specific path; it
flows through any connected route, following the path of least resistance.
•
The U.S. electric system is comprised of an interconnected network of generating
plants, transmission lines, and distribution facilities. Transmission lines, which consist
of heavy cables strung between tall towers, carry power from where it is generated to
the point where it is needed.
•
The U.S. electric transmission grid consists of nearly 160,000 miles of high voltage
(230␣ kilovolts and above) transmission lines. In 2001, America’s electric companies
spent over $4.2 billion maintaining and operating transmission facilities and equipment and $3.7 billion for construction expenditures (including replacements, additions, and improvements).1
•
Transmission lines in the U.S. are divided into three integrated regional grids: one in
the East, which connects the Eastern seaboard and the Plains states; another in the
West, which connects the Pacific coast and the Mountain states; and another that
operates in Texas. These networks provide electric companies with alternative power
paths in emergencies, and allow them to buy and sell power from each other and from
other power suppliers. The structure of the grid makes reliability possible.
•
Newly competitive electricity markets and growing demands for power have expanded
the use of the transmission grid. Built originally to interconnect neighboring utilities
and to serve local demand needs, the grid is now being used by electric companies as
a “superhighway” to serve regional electricity markets and to move large quantities of
power across long distances.
1
Sources: Federal Energy Regulatory Commission Form 1, 2001; Edison Electric Institute Construction Expenditure
Survey; company annual reports. (Data for investor-owned utilities only.)
•
The grid simply cannot perform these functions in an efficient manner, which leads to
increased congestion and bottlenecks in the system. According to NERC, the volume
of actual transmission transactions has increased by 400 percent in the last four
years.
•
Increased congestion on transmission lines threatens system reliability and increases
costs to consumers. According to the Federal Energy Regulatory Commission, transmission bottlenecks cost consumers more than $1 billion in the summers of 2000 and
2001 alone.2
•
By 2010, the Energy Information Administration (EIA) projects that electricity consumption will increase by 20 percent; EIA forecasts a 54-percent increase by 2025.3
Transmission grid expansions are expected to be slow and likely will not keep pace.
•
According to NERC, 10,100 miles of transmission facility additions (230 kV and
higher) are planned throughout North America over the next 10 years—only a 5percent increase in total installed circuit miles over the 10-year period. NERC cautions that most of these additions are intended to address local transmission concerns
or to connect new generators and will not have a significant impact on the grid’s
capability to transfer electricity over long distances.4
Higher electricity prices and reliability problems will result if transmission constraints
are not addressed.
•
Current rates of return on transmission investment are too low to attract the significant amount of capital needed to finance and build new transmission facilities. According to one recent analysis, maintaining transmission adequacy at its 2001 level
might require an investment of about $56 billion during the present decade.5 Nationwide, annual investment in new transmission facilities currently totals about $4 billion
annually.6 This investment gap must be closed.
•
A significant obstacle contributing to the decline in transmission investment has been
the siting of new transmission lines on both private and public lands. Unlike the
strong federal authority that rests with FERC to site natural gas pipelines, the states
currently site transmission lines.
•
New transmission lines need to be planned to serve markets in more than one state,
yet it can take literally a decade or more to gain approvals from a myriad of state,
county, and local authorities.
2
Federal Energy Regulatory Commission, Electric Transmission Constraint Study, December 19, 2001.
Energy Information Administration, Annual Energy Outlook 2003, DOE/EIA-0383 (2003), January 2003.
4
North American Electric Reliability Council, Reliability Assessment 2002-2011, October 2002.
5
Eric Hirst and Brendan Kirby, Transmission Planning for a Restructuring U.S. Electricity Industry, June 2001.
6
See generally, FERC Form 1 Data, 2001.
3
March 2003