Investing in expansion: the many issues that cloud transmission planning

The recent blackouts in the Western and Eastern regions of the US provide growing evidence that certain actions are urgently need to ensure that the electricity sector will continue to meet the nationʹs needs for reliable and affordable energy. Much of the concern in this respect is due to the fact that the electricity infrastructure has made minute provisions to meet the changing needs of the economy. It is widely believed that the current transmission and distribution systems were designed primarily for the industrial era of the 1950ʹs and 1960ʹs, when mechanical switching and radial network design were adequate. Furthermore, annual investment in the transmission system has been cut in half since 1975, and capital expenditure plans announced by utility companies suggest that the underfunding trend is not going to be reversed soon. There is concern that the gap is getting larger between the economy and the electricity infrastructure that is supposed to support the economy. Expanding the transmission system will benefit consumers by reducing the possibility of outages, promoting affordable and stable power prices, and encouraging the construction of cleaner, more efficient power plants. Although the electric transmission cost on average represent a small portion of the total cost of delivering the electricity, any transmission investment has the potential of yielding benefits far outweighing costs.