Energy Biz - March/April 2008 - (Page 29) has been successful in spurring transmission expansion. The committee recently approved a policy for a cost allocation method for economic upgrades. New transmission, whether it is built for reliability or economic reasons, will not become a reality without some assurance of cost recovery. Efficient and effective seams agreements, which determine how neighboring transmission providers interact at their borders, will be a critical step in the implementation of any major extra-high voltage developments for interregional projects. While existing seams agreements address cost recovery for transmission projects that clearly provide mutual benefits, a methodology must be developed to address larger projects that could provide major economic benefits today and in the future. Transmission interests must find ways to work together whenever possible, while preserving the uniqueness that is important for specific needs. Another major challenge with long-range planning is uncertainty about what the future holds. The list of uncertainties is long, including the impacts of demand response, energy efficiency, and environmental standards; technological developments; the aging of the industry workforce; turnover among our regulatory colleagues and future market developments. a naTiOnaL aPPrOach not only the benefits of competition in generation but also to facilitate increased use of renewable resources, I am convinced that we will need not just to upgrade our electric grid but also to reconfigure it.” She continued, “We need a true nationwide transmission version of our interstate highway system; a grid of extra-high voltage backbone transmission lines reaching out to remote resources and overlaying, reinforcing, and tying together the existing grid in each interconnection to an extent never before seen. To get to that end state, we must have cost allocation provisions in place that can accommodate such wide ranging benefits.” FERC’s emphasis on increased transparency in interregional transmission planning, for both reliability and economics, is a major step in the right direction. The industry would benefit from standards for seams agreements between transmission providers, which could include fair and simple cost allocation methodologies. The prospect of negotiating numerous interconnections, with endless debates and analysis of project beneficiaries, is daunting. The United States bulk power system is the most complicated and extensive machine in existence. The talented people who operate it must now find a way to make fair and efficient cost allocations and seams agreements a reality to ensure the reliable supply of electricity to meet the evergrowing needs of electricity consumers. Les Dillahunty is Southwest Power Pool vice president of regulatory policy. FERC Commissioner Suedeen Kelly believes that the United States needs a national approach to transmission planning. In a July order, she stated, “In order to truly capture www.energycentral.com E n E rgyB i z 29 http://www.etapro.com http://www.etapro.com http://www.energycentral.com
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