New Multi-State Transmission Line Promises to Deliver

The Governors of California, Nevada, Utah and Wyoming – Arnold Schwarzenegger (R-CA), Kenny Guinn (R-NV), Jon Huntsman, Jr. (R-UT) and Dave Freudenthal (D-WY), – recently announced a partnership to spearhead the development of a new interstate high-voltage electric transmission line across the Western United States. The line, which will be constructed through each state over the next five years, will originate in Wyoming with terminal connections in Utah, Nevada and California. The proposed project, called the Frontier Line, grew out of extensive work performed by a wide range of stakeholders and technical experts as part of the Rocky Mountain Area Transmission Study (RMATS). The Frontier line will be able to deliver electricity generated through renewable and conventional energy resources.

The governors created the partnership through a memorandum of understanding (MOU), recognizing that there is growing consumer electric power demand in the West that is best handled through regional cooperation. The project will also tightly coordinate the fours states’ development of renewable and conventional energy supply.

The RMATS cited several major reasons for constructing the new line, including:

· Demand for electricity in high-population states in the West is projected to grow significantly in the coming decades. However, siting generation near load is increasingly difficult and costly. Tapping into abundant and relatively low-cost fossil and renewable resources in the Intermountain West will help keep the West’s economy growing and will reduce price pressures on consumers.
· California faces a significant need for new generation. Using a historic growth rate of 2 percent per year, California must add 1,000 MW of new capacity each year, net of retirements, into the foreseeable future. The Frontier Line transmission project will help meet that need.
· As a region, the West has seen load growth of more than 60 percent in the last 20 years, but high-voltage transmission capacity has expanded less than 20 percent. This project will increase reliability and ease transmission bottlenecks throughout the region.
· This transmission line also will help arbitrage hydro conditions and fuel price volatility, mitigate potential market power abuse, better ensure against catastrophic events like blackouts, and enable new markets for clean energy resources.

The Frontier Line is expected to serve major load centers such as Salt Lake City, Reno, Las Vegas, Southern and Northern California. The line is expected to leverage the development of up to 6,000 MW of wind power and 6,000 MW of clean coal power � a combination that will help diversify the energy generation base of the West and provide greater protection against prices spikes in any one energy resource.

According to a detailed analysis conducted by the RMATS, the estimated annual benefit to mountain states in the West of such a line is between $926 million to $1.7 billion. The estimated annual benefits to California alone range from $325 million to $400 million. The RMATS study estimated that the total cost of a project like this is approximately $3.3 billion. Therefore, consumers in the West are expected to reap greater benefits from this line over its costs in only a few years. The total investment value of the Frontier line is expected to range from $3.5 billion to $5 billion in transmission assets and $10 billion to $15 billion in generation assets.

“I am very encouraged by what the Frontier Line represents,” said Nevada Gov. Guinn. “We all clearly remember the energy crisis that hit the West in 2000 and 2001. This is a very important step forward for Nevada and the West. Thanks to the MOU that is being signed among the four participating states, the region is moving with great speed and unparalleled cooperation to ensure that we will continue to meet a growing energy demand – and provide vital economic and environmental benefits to all the participating states. A sense of teamwork and shared vision is a big part of what this agreement represents for the needs of the West to be met, it is essential that this teamwork and shared vision are carried forward in a workable framework like the Frontier Line.”

The agreement creates a transmission project coordinating committee, the Frontier Line Task Force, which will include a member from each state. Work has already been done to identify potential routes for the project, most of which will be along proposed or existing corridors. The coordinating committee will serve as a surrogate manager until the project can be made available for further engineering analysis and development.

“The Frontier Line proposal reflects real progress in creating a regional solution to existing transmission bottlenecks, and real opportunity to provide benefits by way of lower-cost electricity to consumers across the region,” said Wyoming Gov. Freudenthal. “Detailed feasibility and financial planning remains to be done, but this project is the result of nearly two years of dedicated planning by stakeholders in the West. I appreciate those efforts, because this proposal could be a huge opportunity for the West to remove obstacles that prevent low-cost, diverse electricity sources from satisfying a growing customer demand.”

Given the Frontier Line’s ability to leverage the development of significant amounts of new generation, it will likely become a critical focus of “Clean and Diversified Energy Initiative for the West,” which was launched by the Western governors last year under the auspices of the Western Governors’ Association. By bringing more of these next-generation energy technologies online, the Frontier Line can further diversify the West’s energy resource base and insulate the region, and the nation, from recurrences of energy supply crises such as that which occurred in 2000-2001.