A new report from the Edison Electric Institute (EEI) finds that its investor-owned utilities spent $20.1bn on transmission projects during 2015, which is a 3.1% increase over 2014.
EEI, the association that represents U.S. investor-owned electric companies, released the report on Dec. 22.
“These figures represent only those projects EEI members wish to highlight,” EEI noted in the report. “Due to large project completions, changing projections of system needs and member decisions regarding which projects to report, these figures may not be wholly-comparable to figures in prior reports and are not indicative of overall transmission investment trends,” EEI said.
The 10th annual publication of EEI’s “Transmission Projects: At A Glance” report highlights a cross-section of more than 150 major transmission projects that EEI member companies completed in 2015 or have planned over the next four years. The 150 projects represent approximately $41bn in transmission investments through 2019.
A bar chart indicates that transmission project has increased steadily from $10.2bn in 2010. EEI currently expects the 2016 figure will be $21.5bn and then peak at $22.5bn in 2017.
These featured projects, which represent only a portion of the total transmission investment that EEI’s member companies anticipate through 2019, total approximately $41bn.
"The high level of investment in our nation’s transmission infrastructure improves reliability and benefits customers by enabling electric companies to deploy new technologies, such as advanced monitoring systems, that help to make the energy grid more flexible and more resilient," said EEI Vice President of Energy Delivery Phil Moeller.
"These investments in smarter energy infrastructure also relieve transmission congestion, facilitate wholesale market competition, and support a diverse and changing generation portfolio that includes more wind and solar power," said Moeller, who served on the Federal Energy Regulatory Commission (FERC) from 2006 through 2015.
"The electric power industry is making substantial investments to modernize the energy grid and to build the transmission needed to connect new clean sources of generation and reduce system congestion," said David Owens, EEI executive vice president, business operations group and regulatory affairs.
Because transmission assets are built to be in use for several decades, a large portion of the electric transmission system built in the mid-twentieth century is approaching the end of its useful life and needs to be upgraded or replaced.
In addition, new generation sources continue to need access to the grid in order to meet customer demands for cleaner, cost-effective energy. In order to maintain reliability and enhance the flexibility of the grid to meet these demands, EEI members are continuing to invest in new and upgraded facilities, the association said.
For example, Pepco Holdings – which is now part of Exelon (NYSE:EXC) is developing the new 138-kV Wattsville – Piney Grove transmission line to eliminate potential reliability risks and voltage issues as well as address the age of existing infrastructure in the Delmarva Peninsula area of Maryland and Virginia.
Although energy load growth is relatively flat nation-wide, there is continued load growth in specific regions which require new transmission facilities to meet demand and relieve congestion while ensuring access to economical energy, EEI noted.
Xcel Energy (NYSE:XEL) is addressing such load growth in southeast New Mexico through its new 48-mile, 345 kV Hobbs-Kiowa transmission line while Entergy’s (NYSE:ETR) $62m Louisiana Economic Transmission Project is designed to alleviate congestion in southeast Louisiana and provide access to lower cost energy for its consumers, EEI said.
The electric grid is also being modernized to better incorporate expanded use of renewables and intermittent generation.
California adopted a Renewable Portfolio Standard (RPS) requiring all retail electricity providers to procure 33% of its energy from renewable resources by 2030 and recently enacted legislation that accelerated procurement requirements to 50% by 2030.
Edison International (NYSE:EIX) utility Southern California Edison (SCE) is developing new transmission facilities, including the Tehachapi Renewable Transmission Project and the Path 42 project, to interconnect more wind, solar and alternate energy.
In the Northeast, the Northern Pass Transmission Project developed by Eversource, will bring large quantities of hydro-electric power to customers helping New Hampshire achieve its goals in the New Hampshire Climate Action Plan, and assisting New England in meeting its targets under the Regional Greenhouse Gas Initiative (RGGI), EEI said in the report.
There are also a number of projects devoted to development of a “smarter” grid. For example, NextEra Energy (NYSE:NEE) utility Florida Power & Light (FPL) has invested more than $2bn since 2006 “to build a stronger, smarter and more storm-resilient energy grid allowing faster restoration than ever before,” EEI said.
In the aftermath of Hurricane Matthew in October 2016, FPL was able to quickly restore power to 1.2 million of its affected customers, EEI said in the report.
The Energy Policy Act of 2005 set forth several statutory requirements intended to support transmission investment, and FERC has advanced some pro-transmission efforts since then. Nevertheless, “the risks associated with planning, siting and constructing needed transmission have not diminished,” EEI said in the report.