Of Dogs, Tails and Eisenhower-esque Vision

Steven Brown, Editor in Chief

I was fortunate to have been invited to attend a small but very meaningful gathering of utility executives recently. Quanta Services held its annual Utility Perspectives conference in Boston last month, and two topics dear to the hearts of this magazine’s readership – transmission build-out and smart grid development – were the most-discussed amongst the A-list, C-level crowd gathered there.

“Since the electric industry began, transmission has been the tail, not the dog,” said FERC commissioner Suedeen Kelly, the featured speaker on the conference’s first day. The “dog,” of course, has been generation. “FERC would like to see more transmission built around the country more quickly,” Kelly confirmed. She went on to list a number of initiatives FERC has put in place to make that vision come true.

American Electric Power took a prominent place in the discussion at Utility Perspectives with VP of transmission Mike Heyeck and president and CEO Michael Morris both discussing how their company is working to get more transmission built. Their bold vision of a 765-kV interstate transmission highway, which Morris compared to Dwight Eisenhower’s 1950s vision for interstate highway traffic systems, is gaining steam. Morris says AEP’s “I-765″ plan will tap renewable resources, better enable wholesale markets to perform the way FERC has envisioned, incur less line loss than lower-voltage transmission systems, and take up less right of way.

AEP has formed a new business called Electric Transmission America LLC as a vehicle to invest in select interstate transmission projects of 345-kV and above. It’s a 50/50 joint venture with MidAmerican Energy Holdings Co., and expands on the two companies’ existing Electric Transmission Texas LLC partnership. Electric Transmission Texas was set up to build transmission to support renewable energy zones within the ERCOT region. The new Electric Transmission America will be focused on building transmission outside ERCOT. AEP is also working on a joint venture with Allegheny Energy to build and own 765-kV transmission assets within the PJM Interconnection.

AEP’s Michael Morris noted that he sees a $9 billion to $15 billion investment opportunity in transmission. By allying with MidAmerican Energy and others on ventures like Electric Transmission Texas, Electric Transmission America and the build-out of I-765, it’s obvious that AEP is serious about tackling that investment opportunity.

It’s also obvious that, despite its place as one of the largest generators of electricity in the U.S., AEP’s Michael Morris and Mike Heyeck in no way see transmission as a “tail” to generation’s “dog.” The company seems to be placing equal importance on generation and transmission. And, that’s the kind of thinking it will take to reduce transmission system congestion, tap far-flung renewable energy resources, and transform our 20th century power system into one that’s viable for our 21st century power needs.

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