North American transmission investment to top $14 billion in 2013

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By Rosy Lum and Kent Knutson

Transmission project investment in the U.S. and Canada in 2013 will more than double that of 2012, with $14.22 billion in projects expected to come online this year, compared to $5.59 billion that entered service last year, according to TransmissionHub data.

The 2013 outlook includes 120 projects (totaling 5,426 line miles) that are expected to come online. Of those, 45 projects are estimated to be more than $100 million each. In 2012, 52 projects were completed, totaling 2,462 line miles. Of those, 14 were over $100 million each.

Though the greatest number of line miles that entered service in 2012 belonged to the 345-kV voltage category — 934 miles representing $1.26 billion of investment — the greatest investment last year was in three 500-kV projects, representing $2.80 billion in 309 line miles.

The three 500-kV projects that entered service were San Diego Gas & Electric's (SDG&E) Sunrise Powerlink, a $1.9 billion, 117-mile project that links San Diego to the Imperial Valley in California; Hydro One's $695 million, 112-mile Bruce to Milton line in Ontario; and the Bonneville Power Administration's (BPA) $200 million, 79-mile West of McNary Reinforcement project in Oregon.

Sunrise Powerlink and Bruce to Milton were also the top two most expensive projects of 2012.

The largest 345-kV projects that entered service last year, by cost, were ITC Holdings' (NYSE:ITC) Great Plains (KETA) project, a 227-mile, $205 million line that was energized in December; Oklahoma Gas & Electric's Hugo to Sunnyside project, a 130-mile, $200 million project; and Oncor Electric Delivery's Brown to Newton line, a 99-mile, $157 million project.


For 2013, the majority of the 5,426 line miles scheduled to enter service are 345-kV projects totaling 3,064 line miles, which also represents the greatest investment, or $7 billion.

Northeast Utilities' (NYSE:NU) $718 million, 39-mile Greater Springfield Reliability Project represents the greatest 345-kV investment. The project is one of four that makes up the New England East-West Solution. Lone Star Transmission's and NextEra Energy's (NYSE:NEE) $370 million, 192-mile West Shackelford to Navarro-Sam Switch line is the second most costly 345-kV line, and Lower Colorado River Authority's $311 million, 139-mile Big Hill to Kendall project is the third.

After the $7 billion investment in 345-kV projects, the second greatest investment is $3.2 billion in thirty-two 240-kV or 230-kV projects, representing a total of 1,059 line miles.

ATCO Electric's 149-mile, 240-kV Hanna Regional transmission project, at $764 million, is the largest by cost, followed by Enbridge's (NYSE:ENB) Montana Alberta Transmission Line, a 214-mile, 230-kV project estimated to cost $400 million.

Seven 500-kV projects, representing a total of 577 line miles and $2.99 billion of investment, are expected to come online this year. The largest of these, by cost, is Southern California Edison's Devers to Colorado River project, a $697 million, 115-mile line from the Devers substation near Palm Springs to the new 500/230-kV Colorado substation near Blythe, California.

Nevada Hydro's $684 million, 29-mile Talega to Escondido/Valley to Serrano (TE/VS) (LEAPS) project is the second most costly, and AltaLink's Heartland transmission line is the third, at 41 miles and $610 million.

No 765-kV projects were energized in 2012, nor are any expected to enter service in 2013.

Investment by company

Projects sponsored by Canadian companies ATCO Electric and AltaLink together comprise about $2.11 billion of investment in 2013. Investment in projects to come online this year by companies based in Canada totals about $2.82 billion.

In 2013, ATCO Electric, based in Alberta, is estimated to bring online about $1.28 billion of transmission projects, and AltaLink to bring online about $832 million.

Southern California Edison's investment in projects to come online this year represents the second highest investment, after ATCO Electric, of $1.15 billion.

ATCO Electric has five projects scheduled to enter service this year, including the Hanna Region transmission development project and the Northwest Fort McMurray transmission development project, a C$237 million, 240-kV, 82-mile project for which ATCO has partnered with AltaLink.

AltaLink, also based in Alberta, will energize $842 million in three projects in 2013, the majority of which comprises the Heartland transmission project, a C$610 million, 500-kV, 41-mile project in Alberta.

Southern California Edison's four projects to enter service this year comprise $1.15 billion of investment. The projects are the 500-kV Devers to Colorado River and the Devers to Valley projects, the 230-kV Path 42 upgrade, and the 220-kV Eldorado to Ivanpah project.

Electric Transmission Texas will energize seven transmission projects, all of which are 345-kV, worth $911 million of investment, including the $178 million, 90-mile Clear Crossing to Dermott, the $169 million, 84-mile Edith Clarke to Clear Crossing and the $164 million, 89-mile Edith Clarke to Cottonwood projects.

Investment by RTO

In 2013, the Electric Reliability Council of Texas (ERCOT), in which the competitive renewable energy zone (CREZ) projects are being constructed, will see the most investment, $4.4 billion of the $14.22 billion total investment coming online in 2013, comprising 2,480 line miles of the total 5,426 line miles.

The Alberta Electric System Operator (AESO) follows with 468 line miles, representing $2.3 billion of investment; the Western Electricity Coordinating Council (WECC) comes in third, with $2.2 billion of investment in 1,143 line miles; and the California ISO (Cal-ISO) follows, with $1.8 billion of investment in 236 line miles.

ISO-New England (ISO-NE) is expected to construct 184 lines miles, representing $1.3 billion of investment; the PJM Interconnection to construct 92 line miles representing $700 million of investment; the Midwest ISO (MISO) and the New York ISO (NYISO) to construct 325 line miles and 198 line miles, respectively, representing $600 million of investment each; the Southwest Power Pool (SPP) to construct 263 line miles representing $400 million of investment; and the Ontario Independent Electricity System Operator (IESO) to construct 30 line miles representing $100 million of investment.

In ERCOT, Lone Star Transmission and NextEra's 345-kV West Shackelford to Navarro-Sam Switch line is the largest, by cost and mileage, to be constructed.

In WECC, NV Energy's (NYSE:NVE) 235-mile, $552 million ON Line project is the largest, by cost and mileage, to be constructed. In AESO, ATCO Electric's 149-mile, 240-kV Hanna Region transmission development is the largest, by cost and mileage, to be constructed.

In Cal-ISO SCE's $697 million Devers to Colorado River projects is the largest by cost and mileage, to be constructed. In SPP, OG&E's $175 million, 125-mile Seminole to Muskogee projects it the largest, by cost and line mile.

In NYISO, Anbaric Holdings' $188 million, seven-mile, 345-kV underground Hudson transmission project is the largest by cost, while the New York Power Authority's $88 million, 40-mile, 345-kV Dysinger Tap to BPS Station is the largest by line mile.

In ISO-NE, Northeast Utilities' Greater Springfield Reliability project is the largest by cost, $718 million, while Bangor Hydro Electric's $61 million, 48-mile, 115-kV Downeast Reliability project is the largest by line mile

In PJM, Duquesne Light & Power's $291 million, 8-mile 345-kV Carson to Brunot Island is the largest by cost, while PPL Electric Utilities $23 million, 15-mile, 230-kV Manor to Graceton project is the largest by line miles.

The only project planned for completion in the Ontario IESO is Dufferin Wind Power's 30-mile, 230-kV transmission line, which is estimated to cost $51 million.

In 2012, Cal-ISO saw the largest amount of investment, $1.9 billion in 117 line miles, followed by SPP, with $997 million in 840 line miles; the Ontario IESO, with $838 million in 196 line miles; ERCOT, with $636 million in 514 line miles; WECC non-Cal-ISO, with $435 million in 293 line miles; MISO with $372 million in 251 line miles; PJM with $168 million in 57 line miles; AESO with $134 million in 107 line miles; NYISO with $75 million in 56 line miles; and ISO-NE with $33 million in 39 line miles.

Investment by NERC region

In 2013, the greatest amount of investment by NERC region will take place in WECC, which will see $6.20 billion and 1,742 line miles. The Texas Reliability Entity (TRE), which shares with ERCOT the CREZ projects, is estimated to see $4.4 billion of investment through 2,480 line miles in 2013; the Northeast Power Coordinating Council (NPCC) is estimated to see $1.95 billion of investment in 412 line miles; the Reliability First Corporation (RFC) is estimated to see $694 million of investment in 143.5 line miles; the Midwest Reliability Organization (MRO) is estimated to see $499 million of investment in 344 line miles; SPP is estimated to see $363 million of investment in 263 line miles; and the SERC Reliability Corporation is estimated to see $149 million of investment in 34 line miles.

In 2012, the greatest amount of investment was in WECC, with $2.4 billion in 485 line miles; followed by SPP, with $997 million in 840 line miles; NPCC, with $946 million in 291 line miles; TRE, with $636 million in 514 line miles; MRO, with $282 million in 179 line miles; RFC, with $158 million in 107 line miles; and SERC, with $152 million in 54 line miles.

Suspended projects

Twenty-two transmission projects have been suspended or cancelled recently, totaling $16.82 billion, with the Potomac Appalachian Transmission Highline (PATH) and Mid-Atlantic Power Pathway (MAPP) projects making the biggest headlines in 2012.

PJM's board of directors in August removed the two projects from the RTO's regional transmission expansion plan, citing reduced growth in customer demand and added generation.

PATH, a $2.1 billion, 275-mile, 765-kV line, was a joint venture between Allegheny Energy, which later merged with FirstEnergy (NYSE:FE) and American Electric Power (NYSE:AEP). MAPP, proposed by Pepco Holdings (NYSE:POM), was a $1 billion, 152-mile 500-kV line project that included a 39-mile HVDC undersea cable across the Chesapeake Bay.

Most recently, MidAmerican decided not to pursue the Midwest Power Transmission (MPT) project, which was originally proposed by Electric Transmission America, a joint venture between MidAmerican Energy Holdings and AEP. In December 2012, MidAmerican and AEP told TransmissionHub they did not plan to pursue new projects through Electric Transmission America. The joint venture was then restructured, with MidAmerican securing full ownership of the MPT project. MidAmerican on Jan. 28, 2013 confirmed it was not pursuing the project.

Authors:

Rosy Lum, Chief Analyst for TransmissionHub, has been covering the U.S. utility industry for over five years. She began her career as an energy journalist at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs.

Lum can be reached at rosyl@pennwell.com

Kent Knutson, Director of Data & Content Strategy for PennWell MapSearch, has more than 25 years of energy information industry experience. Prior to joining PennWell, Kent held a number of leadership positions with leading information companies including EnergyCentral, McGraw-Hill Platts, Global Energy Decisions (Ventyx), FT Energy (Pearson PLC) and Resource Data International.

Knutson can be reached at kentk@pennwell.com

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