Dive Brief:
- Investor-owned utilities will have put a record $17.5 billion into transmission projects in 2013 when figures are all tallied, nearly $3 billion more than in 2012. Investment will continue at high levels in coming years but probably will not exceed last year’s figure, according to the Edison Electric Institute’s (EEI) annual transmission projects report.
- Counting only the 170 major projects EEI covered in the report, its members have $60.6 billion of work on the drawing boards through 2024, up from the $51 billion in last year’s 10-year list.
- Projects to support integrating renewable energy resources represent 76% of the total investment. Projects where EEI members are collaborating with others are about 49%, interstate projects about 43% and high-voltage projects of 345-kV and above about 75%.
- As big as the dollar figures are, EEI points out, transmission represents only a small portion of customers’ utility bills – an average of 11%, according to an Energy Information Administration calculation.
Dive Insight:
As utilities deal with unsettling challenges from environmental rules, distributed energy and more energy efficiency, transmission remains a safe place for them to put big dollars. That’s especially true since Congress in 2005 encouraged high rates of return for investments in it. The high returns are no longer a sure thing, however. Wholesale customers, industrials and others have had some success fighting the incentive adders the Federal Energy Regulatory Commission (FERC) has awarded projects, and about a dozen cases are pending at FERC. Instead of the 10-12% or higher rate of return, customers are arguing for more like 9%.