The Chairmen Weigh In

 

What will be the biggest impact of the huge transmission investments now under way?

CURT HEBERT JR.   The first question to be answered is whether or not the capital spend actually occurs. Having spent the last decade on the corporate side of the energy space, I can tell you there are many challenges. The second question is, where will the proposed transmissions projects be located? Finding ways to reduce costs and deliver more energy more efficiently should lead the way to a more reliable system that can actually transport all forms (existing and alternative/renewable) of electricity to the marketplace and benefit all consumers. We must find a way in America to build new and more efficient/reliable transmissions systems.

JAMES HOECKER   Although transmission investment has returned to historical levels, the drought isn't necessarily over. However, assuming (this is not a given) that the United States will make investments sufficient to meet the reliability, economic development, market competition, security and clean energy demands that economists foresee, the outcome will be stable if not lower electricity prices, new homegrown energy businesses and less vulnerability to international energy blackmail.

JOE KELLIHER   The huge transmission investments now under way - if made rather than merely planned - should lower grid constraints, improve reliability, lower price differentials and facilitate the transition to a clean energy future. The U.S. electricity supply is changing, and when our electricity supply changes, the grid must change along with it. State energy policy is a driver, as well as federal environmental policy. If these investments continue, we will end up with a grid designed and built to be interstate, delivering multiple benefits - reliability, economic, and public policy - rather than a series of interconnected single-company systems planned primarily for local delivery to native load.

PAT WOOD   Unlocking new, more efficient, lower cost generation for broader markets (including those resources needed to fulfill renewable mandates). In most cases, this will impact the regional dispatch curves and may make some incumbents uncomfortable, while pleasing their customers.

Who would you identify as a key leader in this transformation?

CURT HEBERT JR. Technology is and must be the leader in transmission. Innovators and entrepreneurs have historically helped industry solve problems, while technology has been an honest and efficient way to create winners in markets.

JAMES HOECKER   There are unquestionably many important policy and regulatory leaders who recognize the need for increased investment in the grid, but I would nominate the capital markets as key. More than $300 billion is needed to strengthen and expand the transmission system over the next 20 years, and this will not be a government sponsored program. Capital markets will lead if complex and overlapping regulation and balkanized market models don't muddy the waters.

JOE KELLIHER   The policy leader has been FERC - federal transmission policy is changing more now than it has in the past 75 years. Up to this point, federal transmission policy has had a single organizing principle: open access. Historically, grid adequacy has not been a federal priority. The policy changes taken in recent years (Order 890, incentives, and Order 1000) are changing federal policy to make adequacy as important as open access. It is less clear who the business leader is at this point. The ITC and ATC models are attractive, but a number of large utilities have established affiliate transmission companies (AEP, NextEra Energy, Exelon). New entrants are another model, one that may be encouraged by Order 1000.

PAT WOOD   I may be a little biased, but I think Quanta Services is really plowing the way, building many of these large projects (Tehachope, Sunrise, CREZ, et al.). Having the workforce and the technology is key in these expansions.