New study tells us that proactive transmission planning will save us billions of dollars, and it’s about time we listened

As temperatures are heating up for the summer, it is once again a crucial time to heed the call to invest in the country’s electricity grid. Heat waves, extreme weather and other conditions can impact reliability, and a stronger transmission system is essential in helping us manage these challenges.

Grid planners recently received additional, imperative guidance into best transmission planning practices, courtesy of WIRES – the international industry group that promotes investment in electric infrastructure. This study – written by independent economists at The Brattle Group – adds to the increasing evidence pointing to the need for forward-looking transmission planning. Not only will a modernized grid help the country adapt to a rapidly-changing generation mix, but according to the WIRES study, proactive planning will save customers up to $47 billion each year in electric bills.

{mosads}The fact is, our current grid cannot possibly support the long-term needs of the transforming generation mix, increased use of new technologies and heightened focus on grid security. With retiring coal plants, new and renewable sources of energy and the integration of energy storage and other new technologies, our country needs a better system to deliver power. Seventy percent of lines and power transformers are over 25 years old. In fact, the majority of our grid was built more than 30 years ago – for a world that had entirely different energy needs than we have today, not for the unknown needs that tomorrow will bring.

As was done a century ago, most transmission planning is still done state-by-state, or even power plant-by-power plant. This constraining process for planning new lines is the result of an antiquated and localized grid planning process that does not take into account modern needs. It leads to higher costs for customers and less reliability across the grid. Our transmission system is in need of an overhaul, one that will have the capacity to bring renewable energy resources to towns and cities across the country that need power…not only for today’s energy users but for decades in the future.

The notion of proactive planning isn’t new: ITC – along with WIRES – has long been supportive of the work that some regional transmission organizations are doing in planning for the transmission upgrades that will be essential to accommodate the nation’s accelerating shift away from fossil-fuel power generation toward a cleaner mix of energy sources. But many planners are preoccupied with the variety of stresses on the grid right now: decades of historical underinvestment, state and federal policy demands, new technologies coming online, increased security demands, evolving reliability standards, severe weather and consumer desire for lower prices.

We cannot let these challenges get in the way of a more forward-looking approach to the grid. Smart planning isn’t just about ensuring reliability – according to economists at The Brattle Group, “a more proactive and immediate approach to building a strong transmission grid will yield net savings in total generation and transmission investment costs ranging from $30-70 billion through 2030 for compliance with current regulations, up to almost $50 billion in savings annually on consumers’ bills in an even more environmentally constrained future.”

Regardless of what drives the changes in the future generation mix – be it emerging technologies, policies like the Clean Power Plan or the overall economics of energy markets, we can rely on the fact that smart and timely transmission investment will result in long-term cost savings. In order to meet the challenges and opportunities of a changing energy mix, economic environment and new technologies, we have to plan ahead. We urge policymakers and regulators to adopt this anticipatory approach for transmission development. With the evolving energy sources and a stagnant system for transporting this energy, we have no time to waste.

By Nina Plaushin, ITC Holdings Corp. vice president, Regulatory, Federal Affairs, and Marketing and Communications