Transmission as an Enabler: Planning Needed

FOR TOO LONG, TRANSMISSION PLANNING has been nothing more than an afterthought in providing electric service to end-use customers. We forecast future load responsibility, plan generation to meet that demand plus reserves, and then plan least-cost transmission that minimally meets reliability standards. It's nothing short of a shame that today 7 percent of our transmission asset base is constraining 93 percent of our generation asset base. This simply must change, and determining how to pay for a robust transmission network is critical.

The National Association of Regulatory Utility Commissioners recently wrote a letter to Senate leaders warning that gridlock could result if Congress passes legislation that dramatically changes the existing balance between federal and state jurisdiction over transmission decisions, including cost allocation. Well, we already have gridlock. For years, Southwest Power Pool's planning engineers have produced regional plans for a robust network that are neatly published and then put on a shelf to collect dust, simply because we didn't know how to pay for the development. Regional cost-allocation methods have even been challenged in our federal courts, yet we argue for the status quo, citing examples of transmission expansion in some states that are nothing more than low-hanging fruit for local needs. Some argue that it is difficult to plan a robust network when we don't know exactly what we're planning for, citing the lack of energy policy.

I view the whole situation a bit differently. We currently have a perfect storm of uncertainty facing our industry with pending carbon policy, aging generation fleets, widely varying fuel prices, varying load growth and expiring long-term wholesale service contracts. A robust transmission network capable of reliably accommodating any number of future scenarios can enable our national goals of energy independence, reducing greenhouse gas emissions and strengthening our economy. During the past year, SPP has been sharing a vision of a new way of thinking about our transmission infrastructure, a view of transmission as an enabling transportation asset to maximize use of our most capital-intensive asset: generation. It is exactly because we don't know what the future holds that we should be investing in a low-cost, low-risk asset that can be highly leveraged in maximizing choices and opportunities in the utilization of our more expensive investments. 

SPP's Regional State Committee of retail regulatory commissioners, member committees and working groups, and staff have taken meaningful and concrete steps toward developing new transmission cost-allocation policies that are reasoned, balanced and independent and that will enable significant transmission investment. Is it perfect? By no means, regardless of whom you ask. However, it's better than where we've been, and nothing gets perfected on the drawing board.

To make this vision a reality, we must develop new planning processes that find solutions for regional and national issues. We must develop new benefits assessment tools that capture the true direct and indirect value of transmission. We must have regulatory cost-recovery rules that focus on maximizing value versus least-cost, and view the used and useful nature of transmission assets over a broader geographic region and time frame. And we must view bulk transmission as national infrastructure from which we all benefit and for which we should all bear the cost.