As new high-voltage transmission increasingly becomes a stand-alone business, the structures for ownership and financing of that business continue to evolve. Drivers for new high-voltage transmission include the need for reliability and for delivery from energy sources under renewable portfolio standards, the availability of federal stimulus funds or loan guaranties, the support of the Federal Energy Regulatory Commission with rate incentives, and other mechanisms including the adoption of the anchor-customer structure for merchant transmission.
Utilities and merchant transmission companies are currently exploring a whole host of creative structures and financing options for the development and construction of new transmission. While a number of difficult issues — including thorny issues associated with siting and cost allocation — remain to be addressed before these transmission projects are built, it is clear that the need for new transmission coupled with FERC’s incentives and ARRA funding are providing the impetus for new transmission proposals. Read more…