Midwest utilities form transmission company

By the OGJ Online Staff

HOUSTON, Sept. 28, 2001 – Six electric utility companies, including three public power operators, Friday asked federal regulators to let them integrate operations of their electric transmission systems into a single system through formation of TRANSLink Transmission Co. LLC.

The application to create TRANSLink, a for-profit, transmission-only company, was filed with the Federal Energy Regulatory Commission, which earlier in the week said it would take a closer look at transmission charges of cooperatives and municipally owned suppliers that don’t join regional transmission organizations (RTO) and would consider holding up mergers of investor-owned utilities.

The applicants include Alliant Energy Corp.’s Iowa-based subsidiaries, IES Utilities Inc., Cedar Rapids, Iowa; and Interstate Power Co., Dubuque, Iowa; Corn Belt Power Cooperative, Humboldt, Iowa; MidAmerican Energy Co., Des Moines, Iowa; Nebraska Public Power District, Columbus, Neb.; Omaha Public Power District, Omaha, Neb.; and Xcel Energy, Minneapolis, Minn.

The utilities said they will participate in TRANSLink through a combination of divestiture, leases, and operating agreements. The participants said they believe TRANSLink is the most cost-efficient option available to manage transmission and to comply with FERC Order 2000, which required investor-owned electric utilities to transfer operational control of their transmission system to an RTO.

TRANSLink said the proposal will comply with these regulations by operating independently of both buyers and sellers in the electricity market, including the applicant utilities. Under the proposal, TRANSLink will be responsible for planning, managing, and operating both local and regional transmission.

Other options for complying with the FERC regulations leave ownership with the utilities, but do not allow the owners any operational control. Transmission service pricing will continue to be regulated by FERC, but construction and permitting approvals will continue to rest with regulators in the states served by TRANSLink.

The participants said they also have entered into a memorandum of understanding with the Midwest Independent Transmission Operator Inc. (ISO) in which they agree that TRANSLink will contract with the ISO for certain other required RTO functions and services.

“Combining and standardizing our transmission operations will allow more efficient electricity markets to develop, helping to prevent the price and reliability problems customers have experienced in other areas of the country,” said Audrey Zibelman, vicepresident of transmission for Xcel Energy.

TRANSLink will oversee 26,000 miles of transmission lines, linking generators producing 35,000 Mw of electric power to 6.9 million customers in 14 states, making it one of the largest transmission companies in the nation.

The participants asked FERC to expedite consideration of their application and said they hope action will occur by early 2002. The application describes the proposed structure, tariffs, and governance of the new company.

The TRANSLink proposal is subject to receipt of all required federal and state regulatory approvals. A headquarters location hasn’t been selected.


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