Transource President: Reliable, flexible, robust grid “is of paramount importance”

“We believe that a grid that is reliable, flexible, and essentially, robust enough to deliver a diverse mix of generation resources is of paramount importance,” Transource Energy President Antonio Smyth told TransmissionHub in a Nov. 14 preview of his upcoming panel session at TransForum East in Arlington, Va.

The needed build out to deliver that reliable, flexible and robust power grid will continue to require a coordinated effort from not only utilities and developers, but also regulators, the environmental community, stakeholders, and planning authorities, he added.

American Electric Power (NYSE:AEP) and Great Plains Energy (NYSE:GXP) formed Transource Energy this year specifically to take advantage of the impending competition created by FERC Order 1000, and Smyth believes the joint venture delivers advantages that prepare the company to supply competitive solutions to future transmission needs.

“We set up a separate business unit for competitive projects primarily because it provides us with a broader reach to pursue projects outside of our traditional respective utility footprints, and it gives us flexibility on the regulatory and financial sides of the equation,” Smyth said.

Transource considers cooperative development important to its future success in the competitive market.

“Transource has set itself up to be flexible; ready to work with partners where possible or necessary, and prepared to be a standalone developer,” Smyth said.

The company plans to focus on competitive projects in the PJM Interconnection, Midwest ISO (MISO) and Southwest Power Pool (SPP) regions, and it initially targeted two SPP projects for development – Iatan-to-Nashua and Sibley-to-Nebraska City.

SPP approved Iatan-Nashua as a balanced portfolio upgrade in 2009 and Sibley-Nebraska City as a priority project in 2010. SPP subsequently assigned Kansas City Power & Light (KCP&L) as the designated transmission owner responsible for building the projects, and KCP&L plans to designate Transource Energy subsidiary Transource Missouri as the alternate transmission owner of the projects.

KCP&L is a subsidiary of Great Plains.

SPP submitted its Order 1000 compliance filing Nov. 14 with a proposed competitive solicitation model that would promote open competition for transmission projects at 300-kV and above. PJM and MISO submitted their compliance filings in October.

“Compliance with Order 1000 is different from region to region,” Smyth said, “and developers will have to be prepared to work with the unique challenges of various regions to effectuate the development of the grid.”

Ultimately, Smyth believes that interregional coordination and project development will rely heavily on the ability of planning authorities to work cohesively.

“Order 1000 addresses basic reforms, system planning, cost allocation, and removes the federal right of first refusal, and this is really causing the industry to re-examine strategies for necessary grid expansion at a time when there are high levels of investment required,” Smyth said.

Smyth will join representatives of ITC Holdings, Trans-Elect, and Clean Line Energy at TransForum East for a panel discussion on “The Future Transmission Company and the Eastern Grid Year 2030” on Dec. 5 in Arlington, Va.

To learn more about participating in TransForum East, please visit the event website.