Transmission Grid Funds Sapped by Power Crisis
With attention focused on building more power plants and using less energy to solve the country’s electricity problems, the high-voltage transmission grid has become “gridlocked in a tangle of infrastructure problems and regulatory uncertainty,” according to a study released Tuesday.
The transmission business is at a crossroads: The operation of high-voltage electricity lines around the country is about to undergo major changes at the behest of the Federal Energy Regulatory Commission, which will soon accept electric company proposals on new structures for managing utility transmission facilities.
But because of the resulting uncertainty--as well as community resistance to new construction--not enough money is being invested to expand and upgrade the high-voltage lines that take electricity from producers to consumers.
This lack of investment could hinder the growth of competitive markets, Cambridge Energy Research Associates, a respected energy consulting firm, said in a study titled “High Tension: The Future of Power Transmission in North America.”
California’s electricity crisis could be eased, for instance, if the state could get its hands on electrons from Texas, where there is a surplus, the Cambridge, Mass., consulting firm said. But the two states belong to regional transmission grids with little interconnection, a situation that provides safeguards should huge power failures occur but limits how much one region can help another.
“These are the highways for electrons, and we need better roads,” said Jan Smutny-Jones, chairman of the California Independent System Operator, which operates the long-distance transmission for most of the state. “What we’re talking about here is fundamental infrastructure, and we need to make sure there is sufficient investment made to move the power around.”
Smutny-Jones, who also heads a trade group for power generators, agreed that the U.S. transmission system faces serious challenges, but he noted that Cal-ISO has approved $800 million in system upgrades and is looking at more.
Said Larry Makovich, a CERA senior director specializing in the North American power industry: “Electric transmission and its future has become a central focus and strategic uncertainty for the North American electric power industry.”
The U.S. power grid is a patchwork operating under different rules and was not designed to send power across regions--”the job it is now being called upon to do,” Makovich said. “This imbalance between system capacity and supply and demand has contributed to well-publicized problems in California and other parts of the country.”
Federal energy regulators have not specified what these so-called regional transmission organizations should look like, although FERC has said utilities should not control the long-distance transmission lines so new competitors can more easily enter the market.
In California, the long-distance transmission grid owned by publicly traded utilities, which serves about 75% of the state, is run by Cal-ISO, a Folsom-based nonprofit corporation set up by the state’s 1996 electricity deregulation law. California’s serious electricity problems this year have whipped up strong criticism of the structure of Cal-ISO and a sister agency, the California Power Exchange, which runs the state’s electricity market.
The California Municipal Utilities Assn. on Thursday advocated replacing Cal-ISO with a new ratepayer-owned system that would own and operate electricity transmission lines in the state, including those of the municipal utilities. Cal-ISO’s defenders said the system worked efficiently under extreme conditions this summer, which saw record wholesale power prices and threatened blackouts.
