Following are answers to the most frequently asked questions regarding WIRES, its purpose, and goals as well as the history and status of the transmission industry.
Why is there new interest in the "wires" business?
Interest in the "wires" business has resurfaced because of more than 25 years of underinvestment and the significant increases proposed for future electricity demand and the generation capacity needed to meet that demand.
Why the sudden need to focus solely on the transmission business?
Because transmission has only recently been recognized as a separate business or sector by the Federal Energy Regulatory Commission (FERC) and other influential industry entities, there remains significant risks for the success of the transmission business and strong competition for capital.
What is WIRES going to do to help the situation?
The creation of WIRES is a response to a growing need for transmission infrastructure investment and the related need to highlight policies essential to support that investment. Getting the right policies in place depends on viewing transmission as (1) integral to an efficient wholesale power system, (2) critical to effectively functioning markets, (3) a way to bring choice, fuel diversity, and system flexibility to power markets and customers, and (4) an area where investment in new technologies can often expand the capacity or efficiency of the grid without siting new linear facilities.
Aren't there other organizations that represent transmission owners or customers? What is WIRES going to do that's different?
While there are other major contributors to the discussion about transmission infrastructure, pricing, and access: e.g., Edison Electric Institute (EEI), Transmission Action Policy Study Group (TAPS), Electric Power Supply Association (EPSA) and others, their resources and attention are more heavily invested elsewhere. Transmission remains the only sector of the electric business not represented by a broad-based national trade group, and yet transmission is critical to the reliable operation of the system and the success of energy markets across the nation.
What challenges face the power system today, especially in the area of transmission?
Why isn't transmission getting the financial backing it needs? And how will WIRES help improve capital attraction for transmission?
Transmission is becoming a more attractive investment but there are regulatory and execution risks that are slowing the infusion of capital needed to keep pace with the foreseeable increases in electrical demand and the competition for customers. Transmission investors need a more certain risk/reward equation when it comes to cost allocation, rates, and the siting of facilities; they too often conclude that they should invest elsewhere when faced with tying up resources for years in a process with an uncertain financial outcome. This is simply not acceptable; the stability and reliability of the electric grid is critical to the quality of electric service and the success of regional economies.
What can be done about policies and regulations in the transmission business?
Economic, environmental, and regulatory policy for electric high voltage (EHV) transmission should recognize that transmission is a shared network industry. But transmission is subject to diverse and often inconsistent regulation in several areas. If not coordinated, these policies will hinder investment in much-needed infrastructure. A multiplicity of rules could therefore lead to reliability problems in the future. Because a utility's regulatory environment is a critical factor in determining its investment attractiveness, WIRES will keep regulators and lawmakers sufficiently informed of the issues and available solutions.
How will WIRES seek to influence policymakers?
WIRES will ensure that transmission not only "shows up" in energy policy decision making, but is recognized as a priority. That does not mean that it will be easy to expand the system or that the industryor customers will always decide that more transmission is the best option. But, where there is effective planning that takes into account both reliability and economics and the environmental effects, the benefits of transmission for customers can be demonstrated.
Developing new transmission will be a collaborative process among the relevant regulators, industry interests, and customers. WIRES' job is to make this sector more visible and to highlight its benefits and challenges.
How will WIRES' members benefit from its legislative actions?
Transmission is a distinct business line and the WIRES members all place a high priority on enhancing and expanding the transmission system to serve their customers and their regional markets. WIRES' vision for the grid includes well-planned facilities and a flexible system that provides reliability first, captures the economics of enhanced transmission, and identifies the best technology for aparticular application. But WIRES would not exist if everyone who has a stake in the electric industry – providers and customers alike – believed that the system was already optimal or that it would not be cost-effective to build out the transmission system or operate it better. Our members believe the public stands to benefit from WIRES successfully meeting its short- and long-term goals.
Some major transmission interests aren't involved. Why not?
We are still early in the process of educating companies and industry groups about WIRES, and we are focusing our efforts on those entities in which the message of transmission investment will resonate. WIRES is designed to include a wide variety of transmission operators (TOs), customers, technology companies, policymakers, regional grid managers, and investors. And it is converging on a constructive discussion about the future of transmission investment, whether there is consensus or debate.
Aren't WIRES members making transmission investments? What do they have to complain about?
Yes, new transmission is on the drawing board and regional plans are beginning to emerge. Yet, in each instance, WIRES members are facing regulatory and financial obstacles. Current and future WIRES members represent a variety of perspectives on the business:
The question common to all these groups is "how can we and our customers obtain the benefits of more transmission capacity?" WIRES is dedicated to finding an answer to that question through a reality-based solution.
Is WIRES just about transmission independence?
Since 1996 (and Order Nos. 888 and 2000), most transmission policy has been about independence and non-discriminatory access to the network in one form or another. But WIRES is not just a group of independent transmission companies. While some members own or develop only transmission and provide only transmission services, others are focused on this specific sector from within integrated utility structures or from the standpoint of investors or purchasers of transmission services. Consequently, WIRES does support transmission independence in the sense that its focus is distinct from, or independent of, other segments of the business, and that the electric transmission network is the critical link among all elements in the power market.
Will WIRES oppose or argue against distributed generation projects, or against demand-side or efficiency measures that might prevent the need for more facilities?
No. We believe the grid is the future --- the North American electric system will have to operate over the long term as an integrated network capable of serving a wide variety of needs at different times and places. Transmission is the underlying infrastructure which, like the highways, the Internet, or other network industries, supports a constant and highly liquid commerce in a critical commodity and service --- electric power. The grid is what WIRES is dedicated to strengthening but the electric system will draw on a diverse portfolio of resources.
Isn't it an exaggeration to claim that transmission has environmental benefits?
No. An adequate transmission grid can bring renewable energy products to market. Customers increasingly want to buy from those resources and we want to help make that possible. As it minimizes congestion,cost-effective transmission investment can also help the whole power system function more efficiently and make generation close to load less necessary, which is an environmental benefit.