A Word with Transmission-Only Utility: American Transmission Company
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- Mar 22, 2019 7:00 pm GMTMar 22, 2019 4:03 am GMT
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Last month, four Alaska utilities submitted an application with the Regulatory Commission to form a transmission-only utility in Alaska’s Railbelt region. What are the benefits to becoming a transmission-only utility or transco? Should more utilities consider this business model as an opportunity to expand, upgrade and compete?
Consolidating resources and expertise are the obvious benefits. A transmission-only business model allows utilities to focus all of their efforts into transporting power from where it’s generated to where it’s needed. In line with rules established by FERC to bolster transmission investments, a transmission-only utility can promote reliability and lower costs while upgrading infrastructure and reducing transmission congestion. Transmission investment continues to be driven by the need to upgrade aging infrastructure and to expand delivery of new sources of power to population centers.
There are several transmission-only utilities in the United States, American Transmission Company (ATC), ITC Holdings Corp., Cross Texas Transmission, and Vermont Electric Power Company. ATC and ITC took a moment to voice their viewpoints and share the secrets to their success with Energy Central.
A Word with Anne Spaltholz, Director of Corporate Communications at American Transmission Company
Anne on ATC's inception and objectives.
"We were formed in 2001 to bring together the transmission assets of several utilities to enhance the reliability of the transmission system and address the investment needs of the network in a more efficient manner."
What has led to the growth and success of the company?
“Early on, we measured our success by demonstrating that this new business model could work. Over the years, our success has been marked by operating the system efficiently, ensuring reliability for our customers, and establishing a strong safety ethic among our employees and contractors.”
Anne explained how ATC has become an industry leader and the benefits of the business model.
"Our core business is operating the system. It’s what we do 24/7, and our reliability metrics indicate we are a top industry performer.
We have had to invest in the system by building new infrastructure to ease congestion, address reliability issues and help bring renewables to market. We have invested more than $4 billion over the past 17 years. We have had success in permitting and constructing long and short lines, in urban and rural areas and crossing state lines. Our consistency in cost controls, purchasing and benchmarking strategies result in construction cost estimate accuracy that consistently beats the industry standard."
On ATC’s specific achievements, Anne continued…
"Under this business model ATC has increased assets from $550 million in 2001 to $4.7 billion in 2017. They have upgraded more than 2,130 of transmission lines, built more that 670 miles of new line, improved more than 190 substations and connected 6,100 megawatts of new generation at 28 sites. By building business relationships with vendors they have kept costs down. ATC’s expertise made them an excellent candidate to aid Alaska in their planning to form a transmission-only utility."
Anne shared more about aiding Alaska’s utilities to form a transco.
"We believe that proven experience makes us a good potential partner for other utilities, including public power and traditional utilities outside of our footprint who may want assistance with transmission. Every partnership is unique, and we welcome the opportunity to share our experience with other utilities, such as we have with our partners in Alaska."
Regarding industry concerns about the rapid speed of disruptive innovation and new technologies, forming a transco may be the answer. Should more utilities seize the opportunity to become a transmission-only utility? ATC has paved the way. On behalf of Energy Central, I would like to thank Anne Spaltholz, Director of Corporate Communications at American Transmission Company for taking the time to share the utilities' insight and expertise with the community.