Following Obama’s reelection, developers remain bullish on transmission

President Barack Obama’s reelection on Nov. 6 ensures the continuation of his initiatives such as the interagency rapid response team for transmission (RRTT), according to Roxane Perruso, vice president and general counsel of TransWest Express.

In October 2011, the Obama administration said it would accelerate the permitting and construction of seven proposed electric transmission lines, including the TransWest Express project, under the RRTT.

“We look forward to continuing to work with the RRTT to advance the development of critical electrical infrastructure like the TWE project,” Perruso told TransmissionHub on Nov. 7, adding, “Our understanding is that the final environmental impact statement and the record of decision for the TWE project are scheduled to be released by the Bureau of Land Management and Western Area Power Administration in 2014.”

Construction is set to begin soon after receiving all of the required authorizations, she said.

According to TransmissionHub data, the project aims to deliver wind energy to Arizona, California and Nevada from Wyoming. TransWest Express and the Western Area Power Administration will have joint ownership of the project, which involves the proposed construction of 725 miles of 600-kV HVDC line. 

Another project chosen under the RRTT is Portland General Electric’s (NYSE:POR) Cascade Crossing transmission project.

John Sullivan, project director, told TransmissionHub on Nov. 7, “We recognize that securing the energy future for the U.S. is a priority for the Obama administration and certainly building our capacity for renewables and transmission that supports that renewable generation will continue to be a key part of his energy plan.”

He said the company has had “a very positive experience” with the RRTT and looks for the continued support of the team.

“They have been very proactive when we have asked for help in getting agencies to the table for us to negotiate with,” he said.

Regarding the project’s state application, he said the company expects to receive its determination of completeness the week of Nov. 5 and its draft proposed order by the end of the year. It also expects its draft environmental impact statement (EIS) involving the NEPA process to be issued in May 2013, with the final EIS obtained at the end of 2013.

According to TransmissionHub data, the project is a $1bn, 209-mile, 500-kV transmission line that begins at Boardman and ends at Salem, Ore.

Grant Stevenson, senior project manager with Xcel Energy (NYSE:XEL) and project manager for the CapX2020 Hampton-Rochester-La Crosse transmission project, which was also chosen under RRTT, told TransmissionHub on Nov. 7 that the RRTT “proved to be an effective way for the federal review to stay on schedule.”

Of the project’s status, he noted that there have been some court appeals at the state level, but none would prohibit construction, which is expected to begin on Jan. 2, 2013. A record of decision stemming from the federal environmental review is expected this month, he said.

Lynette Berriochoa, spokesperson for IDACORP (NYSE:IDA) subsidiary Idaho Power, which had two projects chosen under RRTT, including the Boardman to Hemingway project, told TransmissionHub on Nov. 7 that while it may be early to tell whether there will be an impact going forward on the RRTT after the election, the company hopes that the effort will continue.

“It provides an important forum for us to be able to discuss different aspects of the project and help bring attention to the things that need to be resolved,” she said.

Berriochoa said the company is looking at getting the draft environmental impact statement for the Boardman to Hemingway project in the spring of 2013, with a record of decision from the Bureau of Land Management and a site certificate from the state anticipated in 2015.

Another project that was chosen under the RRTT is the 500-kV Susquehanna-Roseland line by PPL (NYSE:PPL) subsidiary PPL Electric Utilities and Public Service Enterprise Group (NYSE:PEG) subsidiary Public Service Electric and Gas.

Company officials told TransmissionHub on Nov. 7 that the project has received all of the necessary approvals and is moving forward.

Referencing the RRTT, Frank Maisano, senior principal with Bracewell & Giuliani, told TransmissionHub on Nov. 7: “I think it is important to remember we have been looking for a way to better improve transmission siting/development process for a long time, including even legislative efforts like the national corridors that have been ineffective. The bottom line is, no matter what these efforts are or entail, they are looking for solutions to a major problem which dogs us to today: How can we more effectively build transmission issues?”

FERC’s role in advancing electric transmission

Maisano noted that FERC can take several steps to help advance electric transmission efforts in the United States, including continuing to be generous with granting incentives for new projects.

FERC has not done anything in response to comments received in a notice of inquiry that it issued to examine its transmission incentives policy, but it should not “back pedal” on its policies, he said, adding, “Since 2008, we have seen smaller ROE adders for proposed transmission projects.”

Maisano said FERC should also follow through on earlier incentive commitments to transmission developers. “[F]or example, not be draconian when reaching determinations on what prudently incurred costs include when allowing companies with the abandonment incentive to recover costs incurred pursuing now abandoned projects,” he said.

Additionally, FERC should not lower base ROEs – in the context of transmission owner filings or in response to complaints, Maisano said, noting that there are a number of complaints pending against transmission owners.

“The investment community currently views FERC’s ROEs very favorable and reflects reliance that FERC jurisdictional transmission will continue to be accorded favorable returns, relative to electric distribution, and if FERC lowers base ROEs in contravention to investors’ expectations in any of these cases, it would send the wrong message to the market,” he said.

About Corina Rivera-Linares 3054 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.