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the grid. For one thing, many utili- independent transmission system That is a function of how the
<br /> ties in the 1990s agreed to freeze operator, covers much of the power grid has developed.The first
<br /> their rates for several years in Midwest. transmission lines in the nation
<br /> return for restructuring their busi- Looking to his own region, were built a century ago to corm--
<br /> ness. "They can't get power plants with custom;
<br /> real recovery for Many such small islands gradually
<br /> new investment, so "ATC plans tO invest $2.8 billion on were connected by transmission
<br /> they stopped mak- system upgrades in the next I 0 years.' lines. Power plants were built fur-
<br /> ing those invest- -Jose Delgado,President.American Transmission Co. cher from cities, and grids had to
<br /> ments," Hyman said. carry their load to marker.
<br /> While executives Meanwhile, the Federal govern-
<br /> dedicated the smallest sums possi- Torgerson said that the Midwest ment has taken a series of actions
<br /> ble to the transmission grid, they ISO has identified $1.3 billion of designed to create a wholesale
<br /> iichased glamorous utility deals from capital In-escmencs that need to be energy marketplace. Grids :_.ac
<br /> Brazil to Australia. For years utility made - with $500 million projected were built and controlled by single
<br /> executives have known that regula- just for enhanced grid reliability. entities, to carry company-generat-
<br /> 1 tors offered them dismal returns on The Midwest ISO is comprised of ed power over company-owned
<br /> money sunk into transmission. 12,000 miles of transmission in 15 power lines to company customers
<br /> Instead,they were attracted to rich- states and the Canadian province now had a new mission-a mission
<br /> er profits available in building new of Manitoba. for which they were not designed.
<br /> generation and through acquisi- Communications also must be That mission was to carry other
<br /> tions and diversification. upgraded so that transmission grid generators' power on behalf of yet
<br /> Executives in the field closest to operators are in touch in close to other company's customers.
<br /> the transmission business under- real time, he said. Delgado of American
<br /> stand the grid's current appetite for Dean Oskvig, president of the Transmission said, "the biggest
<br /> huge investment. Consider the case power delivery division of Black & problem with the transmission grid
<br /> • of the American Transmission Co., Veatch, a leading power engineer- is that it was designed for integrat-
<br /> which is responsible for 8,900 miles ing firm, based in Overland Park, ed utilities with limited trading.
<br /> of transmission lines.Jose Delgado, Kan., observed, "We in the indus- There are significant gaps in
<br /> the company's colorful, quotable try know the investment in the grid network that impedes operation
<br /> I president, points out that his com- has not kept pace with the increase the system."
<br /> pany plans to invest$2.8 billion on in load demands." Steven Strogatz, a professor of
<br /> • system upgrades in the next 10 Black & Veatch recently did a applied math at Cornell University,
<br /> years. detailed study that analyzed the recently outlined the gaps that
<br /> Projecting his knowledge of power grid's shortcomings in mov- must be bridged in an op-ed piece
<br /> transmission needs in the upper ing vast quantities of power east or in the New York Times.
<br /> Midwest nationally,Delgado agrees west across vast distances. "... Thousands of power plants
<br /> with forecasts that the ultimate
<br /> price tag could approach $100 bil- ,
<br /> •lion. But that sum must be put in *t': w I,•
<br /> .
<br /> context. It is a fraction of the tril- I -
<br /> lions of dollars spent each year to I r
<br /> ! ' --
<br /> fuel power plants around the nation �-
<br /> producing 900,000 megawatts of j . _ — 4,
<br /> h.
<br /> power, Delgado said. I -r,- A —
<br /> Some observers cautioned that it R _, Ni . ,
<br /> is too early to say it will cost $100 - it. „ rL_ . • • ee„t
<br /> billion to pay for transmission grid
<br /> JP-` • -
<br /> improvements. .
<br /> 4
<br /> James P. Torgerson, president - f•• -..; I 'n' I - de -
<br /> and chief executive of the Midwest 'r "' '. . - i
<br /> ISO, said, "I don't know that we're 1 :tr r: ++'
<br /> that far along in the analysis to con- . - ., , r ' - l h •t ^ 1•
<br /> elude that.We want to see what the it 'Yi - e , O ",
<br /> bi-national investigation comes up I �'�� '
<br /> with," he said, referring to the joint lit a RP# a'
<br /> American and Canadian probe into Pedestrians leaving Manhattan flood New York's 59th St. Bridge to Queens,
<br /> the outage. The Midwest ISO, an Thursday, August 14, 2003, in New York. (AP Photo/Tina Fineberg)
<br /> 12 I 4th Quarter 2003
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