# Presentation: 287399

## Ted HumannSenior Vice PresidentTransmission

- 1

## From March 13, 2001 EEI Power Conference 

- By
- David R. Nevius
- Vice President
- NERC

- U.S. Transmission Capacity & Reliability

- 2

## Transmission Assessment

- Loadings increasing
- More curtailments required
- Not designed for current levels and directions of transfers
- Most planning is short term
- Margins are thin

- Transmission Assessment

- 3

## Few Transmission Additions

- Only 7,500 miles planned
- Most additions driven by need to connect to new generators
- No significant improvement to long-distance transfers

- Few Transmission Additions

- 4

## Transmission Growth vs. Generation & Demand Growth

- Transmission Growth vs. Generation & Demand Growth

- 5

## New Generation

**New Generation**

**Source: RDI NEWGen Database**
**Updated: April 5, 2001**

**Coal 2%**

**Natural Gas 95%**

**Wind 1%**

**Waste Coal 1%**

**Other 1%**

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## System Congestion

- 7

## Impediments to New Transmission

- Opposition and litigation
- Uncertain cost recovery
- Impacts vs. benefits?
- Who has responsibility to build?
- Siting across multiple jurisdictions
- Risky Business – Who will invest?

- 8

## License Plate Rate 

**RTO-1**

**Trans**
**$3.00**

**Trans**
**$1.37**

**LOAD**

**Load Zone **
**Transmission**
**Costs = $0.77 kW/Mo.**

**Trans**
**$0.77**

**RTO-2**

**License Plate Rate **

**GEN**

- 9

## $2.08

**$2.08**

**$8.10**

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## Utility   A

- Utility   B

- 11

## License Plate Rates vs. Postage Stamp Rates

**Postage Stamp Rate : $1.25**

**License Plate Rates vs. Postage Stamp Rates**

**License Plate Rates**

- 12

## Rate Comparison

**Postage Stamp****	****$1.25/kW-Mo.**
**License Plate Rate****	**_**$0.77/kW-Mo.**_
**Increase ****	****$ .48/kW-Mo.**
**Consumer**** ****Increase:****	****2.7 kW ******** $0.48 ******** 30 = $0.04/day**

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## Cost Analysis

**Gas Generation at $4/MCF****	****$ 0.04/kWh**
**Coal Generation****	**_**$ 0.01/kWh**_
- 	**$ 0.03/kWh**
**	****(2.7 kW) ******** ($0.03) ******** (350 hrs) = $ 28.00 / Month**
**	****$ 28.00 ******** 30 days = $0.93 / day**

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## Consumer Impact

**Under Postage Stamp pricing the Load Zone’s consumer could see:**
**4 cents per day increase in transmission.**
**93 cents per day savings in power cost.**
**Coal vs. Natural Gas**

- 15

## Western Governors Association Cost Comparison

| Expansion Scenario | Transmission Costs | Savings |
| --- | --- | --- |
| Gas | None |  |
| Other than Gas | $8 to $12 Billion $1 per MWh | $7 per MWh |

- 16

## Transmission Costs

**5 to 7 percent of a typical consumers bill**
**Postage Stamp transmission does not cause significant cost shift**
**Cost shift is a Red Herring**
**Tremendous profit is being made from transmission congestion**
**Congestion limits a customer’s options**

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## National Energy Policy

**Explore dependable, affordable, environmentally sound energy**
**Reduce U.S. dependence on foreign energy**
**Comprehensive electricity Legislation**
**Promotes Competition**
**Protects Consumers**
**Enhances Reliability**
**Promotes Renewable Energy**
**Develop Interstate Transmission System**

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## Postage Stamp Rates

**Postage Stamp Rates**
**Combined With RTO’s Can Lead To A Reliable Transmission Grid**

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## Conclusion

**Need to Reduce Energy Dependence**
**Need to Develop a National Grid**
**Reduce Volatility of Energy Costs**
**RTOs Will Not Fix Transmission**
**No Incentive to Build**

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## Postage Stamp Pricing

**Assures Cost Recovery**
**Encourages New Transmission**
**Creates a Level Playing Field**
**All Customers have Equal Access**
**Renewable and Non-Renewable Gen.**

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## Ted HumannSenior Vice PresidentTransmission