The U.S.grid is in need of an upgrade — that’s no secret to the power industry, which plans to spend billions on system improvements, on top of what it has already been shelled out in recent years.
A new report by the Edison Electric Institute (EEI) finds that its member electric utility companies plan to invest at least $64 billion on expected transmission system improvements through 2022. This investment will be in addition to the approximately $77 billion that EEI member companies invested in transmission infrastructure improvements between 2001 and 2010.
Near-term planned transmission investment is impacted by current economic conditions, which have been by a lower rate of demand growth. Coupled with the recent completion and/or delay of major transmission projects, EEI currently projects a flattening or possible decrease in transmission investment through 2014, as compared to the projected 2012 level.
Nevertheless, the projected 2011-2014 figures are significantly higher than the actual 2010 transmission investment level, and are a sign of a continuing increase in transmission investment by EEI’s members.
The ability of EEI members to make transmission investments that are beneficial to customers is supported by effective Federal Energy Regulatory Commission (FERC) policies. EEI member companies are also continuing their efforts to modernize the transmission system through individual funding and the use of U.S. Department of Energy (DOE) Smart Grid Investment Grants (SGIGs) for certain projects, which augment existing EEI members’ grid modernization efforts.
In addition, there are emerging factors that affect transmission investment, including recent U.S. Environmental Protection Agency (EPA) requirements on generation resources. EEI members’ investment in needed transmission is significant and reflects a commitment to reliability, preparation for future customer needs and public policy objectives, EEI says.
Investment in transmission is supported by several landmark developments in federal and state policies affecting transmission infrastructure. These include the Energy Policy Act of 2005 (EPAct 2005), state renewable portfolio standards (RPS), federal initiatives promoting transmission smart grid development under the American Recovery and Reinvestment Act (ARRA), and appropriate and equitable transmission pricing policies, including FERC’s incentives rate policy.
As demonstrated by this report, investment in the U.S. transmission network is not complete, so FERC must continue to provide regulatory certainty and support for investment in needed transmission infrastructure, according to EEI.
There are also new federal developments that may assist in transmission siting, one of the major challenges to expanding, upgrading and modernizing the U.S.’ transmission network. The DOE and nine other federal agencies are working together toward the goal of improving the overall quality and timeliness of transmission permitting and review by federal agencies.
READ THE FULL REPORT HERE.