Wisconsin utility predicts $4B in transmission investments

Dive Brief:

American Transmission Co.’s (ATC) annual assessment calls for up to $4.4 billion in in spending on transmission construction and maintenance projects over the next 10 years. ATC, formed in 2000, is co-owned by traditional Wisconsin utilities, including We Energies, Wisconsin Public Service, Alliant Energy, Madison Gas & Electric and Superior Water, Light and Power.
The costs include $1.3 billion on network projects that address specific reliability needs, $0.5 billion on multi-value project identified by the Midcontinent ISO (MISO), $1.4 billion in maintenance and up to $1.2 billion in other capital improvements.
The midpoint in ACT’s assessment this year, $4 billion, is slightly lower than the $4.1 billion midpoint of last year’s assessment, which called for $3.7 billion to $4.5 billion in spending.

Dive Insight:

The boom in renewable resources is putting pressure on transmission lines and prompting many utilities to expand and strengthen their grids. But regulators are also under pressure to keep prices down, especially as consumers see natural gas and wholesale electricity prices falling.

The Federal Energy Regulatory Commission (FERC) recently trimmed the return on equity (ROE) for transmission owners in the MISO by about two percentage points, bringing it down to 10.3%.

ATC’s latest assessment puts transmission spending over the next 10 years at $3.6 billion to $4.4 billion, down just slightly from last year’s assessment.

“We see a continuing, albeit slower, need to expand the regional electric grid, as well as to efficiently maintain and upgrade older assets,” Ron Snead, ATC vice president of system planning, said in a statement. “We also anticipate continued challenges in the next 10 years as generation sources change due to the Clean Power Plan,” Snead said.

But some consumer groups see it differently. "At one point, one would reasonably expect that capital expenditures for ATC’s construction projects would start to wind down,” Todd Stuart, executive director of the Wisconsin Industrial Energy Group, told the Journal Sentinel. "There is obviously a significant incentive for our state’s utilities to keep developing new projects," Stuart said.