6.6. ERMUSR 01-11-2005 - Laserfiche WebLink

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facilities, due to the risks involved.t t I'et such IOUs have ofeen overlooked potential partners in transmission construction projects right in their own back yards-public power systems that could join wish them in financing, constructing, and jointly owning transmission facilities, both existing and new. Sucfijoint projects could reduce the financial burden and spread the perceived transmission-investment risks for the incwnben[ IOUs. Public power participation could also assist in siting and permitting of new transmission facilities, by sending the signal to communities that all of the local utilities (including those that are publicly owned and not.-for- profit) concur in the need for the project.t~ Such a regime will not work, ho~,~ever, if all that contributing public power systems receive in return is an inadequate allocation of FTRs. Investment in the transmission system must carry with it future long-term certainty of transmission service at a just and reasonable cost and, for contributing public power systems, rights that reflect their long- For RTO r@g1011S, a term contributions to the fixed costs of the underlying system tlmelyand effective as well as their investment in new facilities. transmission planning For RTO regions, a timely and effective transmission planning and ConStrUCtlon' and construction regime is absolutely essential, especially iI~ an regime IS abS0lUtely LI\1P/FTR regime is to remain in place. without it, an LNIY/FTR ~SSentlai, espBClally scheme will merely "price" ever-escalating transmission congestion If an LMP/FTR i'eglme and leave intact. the illusory promise that the "market" will build IStO remain 111 place. new t.ransrnission, increasing the resulting price of electric service to consumers. ~b'hile some progress is being made in certain RTOs towards reinforcement of inadequate transmission infrastructure, timely construction of needed new regional transmission projects necessary to ~ t APPA does not concede this point, given that transmission facilities are generally certificated prior to construction and the associated costs (including a rate of rea.trn) are recovered in regulated rates. APPA does, however, agree that certainty of cost recovery during the initial phases of a transmission facilities construction project (planning, permitting, siting and initial construction) is an issue of legitimate concern for TOs, and that in appropriate instances, extraordinary measures may be needed to address these issues. ~~ An alternative joint transmission ownership model is that of the American Transmission Company ("ATC") in Wisconsin. Numerous load-serving entities in the state, including IOUs, municipal systems, and cooperatives, own shares in A"TC, which in turn owns the higher voltage transmission facilities in the state. ATC is responsible for planning and constructing new transmission facilities. Restructuring at the Crossroads: FERC Electric Policy Reconsidered 13