A billion-dollar ‘gold rush’ could send grid rates through the roof.
Bruce W. Radford is publisher of Public Utilities Fortnightly.
Money may be difficult to come by for Wall Street financiers in these dark days, but apparently not for electric transmission construction—at least so far. A rash of recent orders from the Federal Energy Regulatory Commission shows that generous financial incentives remain available to companies seeking to expand the nation’s grid capacity.
Congress virtually mandated such incentives in the 2005 Energy Policy Act (EPAct), for grid build-outs that promise to ensure reliability or reduce the delivered price of electricity by relieving transmission congestion. The most recent award came only two weeks ago, when FERC granted an incentive adder to return on equity (ROE) worth a whopping 275 basis points for a 1,200-MW, high-voltage DC line proposed by New York Regional Interconnect, to bring upstate generation resources to market (Dkt. EL08-39, 124 FERC ¶61,259, Sept. 18, 2008).