Transmission America

March 28, 2014

While Congress and President Obama dither over replenishing the nearly depleted Highway Trust Fund, a more fundamental part of America’s fabric is quietly being strengthened. While derelict bridges garner headlines, it is our fragile power grid that can inconvenience tens of millions of Americans when power goes out in a summer heat wave. The federal government is taking the lead as an Edison Electric Institute report says:

Recognizing the importance of transmission to the nation’s economy, security and quality of life, the Administration recently announced the first ‘Quadrennial Energy Review,’ building off of its Blueprint for a Secure Energy Future, instructing the heads of twenty-two executive departments and agencies to collaborate on a year-long review of transmission and distribution infrastructure.

The Edison Electric Institute report details the extensive private investment that is being made in the backbone of our economy. EEI reports:

In 2012, total transmission investment reached $14.8 billion (real $2012). We expect that increases in year-over-year total transmission investment by EEI’s members will have peaked in 2013 with estimated investment at approximately $17.5 billion (real $2012).

These transmission investments provide an array of benefits which include: providing reliable electricity service to customers, relieving congestion, facilitating wholesale market competition, supporting a diverse and changing generation portfolio and mitigating damage and limiting customer outages in extreme weather.

New transmission investments also deploy advanced monitoring systems and other new technologies designed to ensure a more flexible and resilient grid. At the same time, all transmission projects are integrated into local systems in order to maintain the paramount objective of providing reliable electricity service to customers.

Federal, state and local governments collectively spend about $145 billion a year of public money on transportation infrastructure, which dwarfs spending on the power grid. About 43 percent of these transmission projects are inter-state projects:

These interstate projects span two or more states, and often present additional challenges for siting, permitting, cost allocation and cost recovery. Interstate projects account for approximately 7,700 miles and $26.2 billion in this report (nominal $).

The most encouraging part of the report is that 76 percent of projected future spending is directed toward tying renewable energy production into the transmission grid:

These projects support the integration of renewable resource generation. Renewable energy technologies include: wind power, solar power, hydroelectricity, geothermal, biomass and biofuels. Highlighted projects that facilitate the integration of renewable resources reflect the addition or upgrade of 12,200 miles of transmission with an accompanying investment cost of approximately $46.1 billion in this report (nominal $).

I don’t know enough about the electric power industry to comment on these levels of spending, but I do know enough to say that our transmission system is as important as our transportation system. I’m glad to see the federal government taking the lead and private industry making necessary investments.

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