APPA WASHINGTON REPORT
Transmission, Transmission, Transmission
by Robert Varela
Editor, Public Power Weekly
Just as “location, location, location” are supposed to be the three most important words in real estate, an argument
could be made that “transmission, transmission, transmission” are the three most important words in the electricity
business. You can quibble with “the most” but not with the fact that transmission is an increasingly important part
of the business.
Transmission access holds the promise of increased reliability and lower prices for wholesale power. (Public power
utilities can take care of the rest—excellent customer service, local control, responsiveness to customers’
concerns—on their own.)
Public power utilities fought hard for years for the right to open access to transmission service, finally achieving
that goal—at least legally—in the Energy Policy Act of 1992.
However, the battle is definitely not over. The fight has shifted from the legislative arena to implementation of the
law (and its accompanying regulations) and expansion and modernization of the grid. It won’t be easy but public
power utilities are stepping up to the plate in a variety of ways and regions.
In the Midwest, a number of public power utilities have joined with some rural electric cooperatives and investorowned utilities to form the CapX 2020 alliance. In August, they filed applications with the Minnesota Public
Utilities Commission to construct three major 345-kilovolt transmission lines. The proposed lines would span more
than 600 miles and represent one of the largest single transmission initiatives in the region in decades. The 11
utilities plan to file an application for a fourth line later this year.
The four projects represent a combined investment of approximately $1.4 billion to $1.7 billion, CapX 2020 said.
That’s just the first phase of projects. Group 2 and Group 3 project phases are planned through 2020, the alliance
said. Demand in Minnesota and the surrounding region is expected to grow by 4,000-6,000 MW by 2020. The area
would experience numerous transmission overloads, outages and voltage problems if no transmission was added,
the utilities said.
Among the public power utilities participating in the CapX 2020 alliance are Central Minnesota Municipal Power
Agency; Missouri River Energy Services; Rochester, Minn., Public Utilities; Southern Minnesota Municipal Power
Agency; and Wisconsin Public Power Inc.
In the Southwest, SRP is working on a number of new transmission line projects, including some joint efforts with
other utilities in the region.
In the Pacific Northwest, a similar public-private alliance, ColumbiaGrid, has filed a proposal with the Federal
Energy Regulatory Commission to coordinate transmission planning and expansion in the region. ColumbiaGrid
will provide a number of services, but will not own, operate or control transmission facilities. ColumbiaGrid’s
members include the Bonneville Power Administration; Public Utility District No. 1 of Chelan County, Wash.;
Public Utility District No. 2 of Grant County, Wash.; Public Utility District No. 1 of Snohomish County, Wash.;
Seattle City Light; and Tacoma Power.
Further South, Lafayette, La., Utilities Service offered to provide funding to help rebuild Entergy’s transmission
grid in return for a stake in the system. That offer of help in the wake of hurricanes Rita and Katrina was declined,
but LUS, along with the Mississippi Delta Energy Agency, is still pushing Entergy and FERC for improvements to
their transmission service.
Three “disquieting trends” appear to be emerging under the Southwest Power Pool's stewardship (as the
independent coordinator of transmission) of Entergy’s transmission system, the Lafayette, and MDEA told FERC
in August. The trends are (i) a significant increase in congestion in the form of transmission loading relief events;
(ii) a failure by the independent coordinator of transmission to process transmission and interconnection service
requests in a timely manner; and (iii) a failure by SPP to take a leadership role on regional transmission planning.
In regions with regional transmission organizations, public power utilities—such as the Delaware Municipal
Electric Corp. in PJM and WPPI in MISO—have led the fight for long-term transmission rights. APPA has made
long-term transmission rights a key part of its Electric Market Reform Initiative.
While building or participating in construction of new transmission lines may not be feasible for some public power
utilities (witness Entergy’s refusal of Lafayette’s offer), but all public power utilities can help push for a better grid
in other ways. Options can include supporting APPA’s EMRI project; keeping pressure on transmission owners to
provide adequate service, as Lafayette and MDEA are with Entergy; or joining an alliance like ColumbiaGrid to
work on transmission planning and expansion.
The most important thing is to find the time or money (or both) to help ensure your access to a robust transmission
system. Whether you’re operating in a regional transmission organization or in more traditional markets, one key to
effective wholesale competition is transmission, transmission, transmission.