1. Transmission As Enabler
Delivering Benefits to Customers
Janet Gail Besser, Vice President
Transmission Regulation and Commercial Services
Massachusetts Electricity Restructuring Roundtable
Boston, MA
February 9, 2007

2. Transmission’s Role
Transmission is the critical link for enabling competitive electricity markets
Transmission is a market facilitator, not a market product
Increased transmission investment is required to deliver customer benefits both in market and non market regions
Policies that recognize role of transmission as market enabler must be implemented to ensure reliable and economic system for customers

3. Roadblocks to Adequate Transmission…
Planning and pricing policies that view transmission as a market product vs. market enabling infrastructure
Ignore the “Commons” nature of transmission
Inappropriately distinguish reliability v. economic upgrades
Accompanied by cost allocation/recovery policies that
Rely on voluntary participant funding
Attempt to identify specific beneficiaries
Fail to recognize network benefits

4. …Become Roadblocks to Public Policies
Promoting fuel diversity, renewable energy, distributed generation
Misunderstanding transmission (and distribution’s) role in connecting customers to resources
Historical origin of transmission
Economic interconnection of remote groups of customers, and customers to generation
Evolving role today
Economic interconnection of remote resources

5. E.g., Transmission and Wind Energy
National Grid’s objective with the recent wind paper
To recognize the increasing public and regulatory attention on new cleaner sources of energy, such as wind energy, and to explain how transmission system changes will be required to accommodate these new technologies
Regulatory and policy desire for cleaner, diversified sources of energy
Reliability and economic consequences of over-reliance on certain fuel types
State Renewable Portfolio Standards (RPS) and renewable energy funding mechanisms

6. Need for Effective Regional Planning
Critical components of effective planning
Sufficient geographic scope
Open and transparent process
Independent entity
Comprehensive planning criteria, addressing both reliability and economic needs
Including consideration of energy efficiency, distributed resources, location-specific remote resources
Authorization for construction
Cost allocation and recovery methods that recognize broad benefits of transmission
Coordinated with other market rules and processes

7. Benefits for Customers
Fully value the benefits of transmission
Enhanced reliability
Reduced market power
Lower overall electricity prices
Access to lower cost remote resources
Support for distributed resources
Environmental improvements
Access to cleaner, more efficient resources
Facilitating energy policy
Renewable portfolio standards
Fuel diversity

8. Upfront Cost Allocation
Should be clear, well-defined, repeatable
Avoid case-by-case allocation that invites endless debate and litigation
Costs should be allocated broadly to reflect:
Transmission’s widespread benefits
That transmission’s beneficiaries change over time

9. Conclusion Transmission is market enabler, not market product
Inadequate transmission investment is key obstacle to delivery of benefits to customers in both market and non-market regions
Policies must recognize role and importance of robust transmission infrastructure
To ensure reliability and long-term resource adequacy
To reduce customer costs
To advance public policy
To support and facilitate diverse resource mix

10. Questions? Find Transmission: The Critical Link at:
Find Transmission and Wind Energy: Capturing the Prevailing Winds for the Benefit of Customers at: