U.S. Energy Secretary cites need for more power lines

Tuesday May 29, 2001 5:03 pm Eastern Time

NEW YORK, May 29 (Reuters) - While President George W. Bush and California Governor Gray Davis met to talk about the energy crisis in the West, U.S. Energy Secretary Spencer Abraham spoke Tuesday about the need to build more power lines nationwide.

Abraham chose to share his message in New York because, like California, a lack of power lines in New York has impeded the movement of electricity, resulting in higher prices and lower reliability.

"There is ample supply of energy in (rural upstate New York), but transmission constraints and bottlenecks limit the ability to transfer that electricity into (New York City)," Abraham said at a press conference at Consolidated Edison Inc.'s (NYSE:ED - news) Sprain Brook Substation in Yonkers, N.Y.

Abraham, who is traveling the country to promote the recently announced Bush administration's national energy policy, blamed transmission constraints for price spikes in New York City and the rolling blackouts in California.

Most of the energy shortages in northern California over the past year, Abraham explained, resulted from a transmission bottleneck called "Path 15." That bottleneck prevents power in southern California from moving to northern California.

During some of these blackouts, Abraham continued, there was enough surplus power in southern California to meet demand in the northern half of the state, but insufficient transmission capacity to get power where it was needed most.

There are two ways to meet the nation's electricity demand: build more power plants or expand the transmission system, Abraham said.

"Sometimes it makes sense to build more generation, other times we must expand transmission," he said, adding California needs more transmission and generation.

HOW TO FIX BOTTLENECKS

Of the many reasons for transmission constraints, Abraham said one is a lack of economic incentive to build new lines.

In its national energy plan, Abraham said the Bush administration proposed that the Federal Energy Regulatory Commission develop incentive rates to promote transmission expansion in areas where bottlenecks exist.

Another problem, Abraham noted, is the siting process for new transmission facilities.

Under current law, transmission siting is a state function.

"That law was written 66 years ago ... when power plants were right next to customers, and decades before transmission lines interconnected states and regions," Abraham said.

Recently, New York suffered from this outdated siting process when neighboring Connecticut rejected a transmission line that would connect New York's Long Island -- an area that badly needs additional electric supply -- with the New England power grid.

"Much has changed since 1935. The transmission grid is the interstate highway system for electricity. It should not be a system of local toll roads," he said.

The National Energy Policy, Abraham said, proposes legislation providing for Federal transmission siting.

"If we remove transmission constraints across the country, like those present in New York, the result will be lower prices and improved reliability," Abraham said.