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ITC

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http://www.msnbc.msn.com/id/27464980/. 37. U.S. Wind Map. 38. Population Centers ... to seven to nine 600 MW coal plants, or nine to eleven million autos(1) ... – PowerPoint PPT presentation

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Title: ITC


1
The Energy SuperhighwayThe Key to Wind Energy
IntegrationJoseph L. Welch, Chairman, President
and CEOJune 30, 2009
2
Advice on Advice
  • Three Questions to Ask
  • Is this person smart?
  • Is this person biased?
  • Does this person have my best interests at heart?
  • ITCs independence gives us a unique and unbiased
    perspective on the current and future needs of
    the energy industry

3
Agenda
  • Who is ITC?
  • Why Independence is Significant
  • Changing Landscape, Industry
  • Bringing (Wind) Power to the People
  • The Trillion Dollar Question

4
Who is ITC?
5
Who is ITC?
  • ITC is the first and only fully independent
    transmission company in the U.S.
  • ITC is the eighth largest transmission-owning
    company in the U.S.
  • Transmission systems in Michigans lower
    peninsula and portions of Iowa, Minnesota,
    Illinois and Missouri
  • Serves combined peak load in excess of 25,000
    megawatts (MW)
  • Approximately 15,000 transmission line miles
  • Also actively seeking opportunities to build,
    own, operate and maintain transmission in Kansas,
    Oklahoma and Texas

6
ITC System Statistics
7
Why Independence is Significant
8
How Did We Get Here? Pre-Independence
  • Before we understand what it means to be
    independent, let us first look at where a lack of
    independence in transmission led us as an
    industry

9
Underinvestment
10
Underinvestment
11
Underinvestment
12
Underinvestment
13
Underinvestment
14
Underinvestment
15
Underinvestment
16
Underinvestment
17
Underinvestment
18
Underinvestment
19
Underinvestment
20
Underinvestment
21
Underinvestment
22
Current Situation For the Grid
  • Aging infrastructure Most of the grid was built
    more than 30 years ago and not designed to reach
    regions of the country that have the most
    potential for renewable energy generation
  • Mounting Reliability Concerns Blackouts and
    brownouts cost our economy every year
  • Inefficiencies A lack of investment has led to
    increased congestion, inefficiency, and higher
    electricity prices
  • Interconnection Problems A lack of capacity has
    created a huge queue length for energy projects
  • High Demand Electricity demand continues to
    grow expected to increase 25 by 2030

23
Does Independence Really Matter?
  • Lets imagine that United Airlines was
    responsible for the control tower operations here
    at OHare Airport
  • What do you think would happen?
  • Whose flights would be the first to land?
  • Whose flights would be the first to take off?
  • There is a clear reason why independence in this
    case is important
  • How does this example apply to the energy
    industry?

24
ITC Independent
  • ITC focuses on ownership, operation, maintenance,
    and construction of transmission facilities as a
    single line of business
  • There is no internal competition for capital it
    is dedicated for prudent transmission investment
  • ITC is singularly focused on transmission and
    aims to bring significant benefits to customers
  • Our Goals
  • Improve reliability
  • Reduce congestion, improve efficiency
  • Increase access to generation, including
    renewable resources
  • Lower cost of delivered energy

25
Impediments to Regional Transmission
  • 1 Parochialism caused by vertically integrated
    utilities and state regulation
  • Lack of collective industry vision / stated
    energy policy energy policy inertia
  • Influence of market participants
  • Fallacy of generation vs. transmission debate
  • Sandbox mentality
  • Siting challenges
  • Lack of regional cost recovery mechanism for
    regional projects
  • Voluntary nature of RTO membership

26
Balkanization and Parochialism
27
Changing Industry, Landscape
28
Changing Landscape
  • Blackout of 2003
  • Changing use of grid
  • No longer local use
  • Increased attention to global warming and energy
    policy
  • U.S. is no longer only significant influence in
    energy consumption
  • Policymakers are calling for the industry to look
    at new technologies
  • However, many of these new technologies are not
    possible without a robust transmission grid

29
Dont Take My Word For It
  • Our national electric grid is critical
    infrastructure, as vital to the health and
    security of our economy as our highways and
    telecommunication networks. Former Vice
    President Al Gore
  • We have an elephant-sized problem and Ill try
    to describe that to you We operate todays
    system closer to the edge than ever before
    Demand for electricity is growing Were already
    heavily dependent on natural gas in some regions
    of the country with respect to reliability... We
    need a transmission network to support the amount
    of renewable energy options that are available to
    us
  • Richard P. Sergel, president and CEO of NERC
  • In order for renewables to replace a meaningful
    amount of our imported oil, we need a national
    electricity transmission system to carry this
    electricity, be it wind, solar, biomass or other
    alternatives.
  • T. Boone Pickens

30
Transmission in National Energy Vision
Wind Energy
Energy Efficiency
Solar Power
Demand Response Programs
Transmission
Bio-fuels
National Security
Clean Coal, Mine-Mouth Coal
Electric Cars
  • Transmission is at the center of the energy
    debate it is the critical link to many of the
    energy policy visions

31
Mine-Mouth Coal, Clean Coal Technologies
  • Public sentiment shift against coal, but
    eliminating all usage of coal is not the answer
  • Grid can make coal more efficient
  • Mine-mouth coal
  • Requires grid
  • Less wasted in transport
  • Environmental mitigation
  • New technological advances hold promise of clean
    coal
  • Public pushback on concept, feasibility

32
Nuclear
  • Nuclear requires transmission grid
  • Must be located near water
  • France and Japan have developed model for
    grouped, modular facilities
  • However, not many utilities have capital
    resources to build nuclear facilities

33
Tapping Renewable Energy Potential
We need transmission to connect the places where
the wind blows the hardest and the sun shines the
most to our towns and cities that need the
electricity
34
Need Energy Superhighway
  • To address these needs, our nation needs a robust
    extra high voltage transmission grid
  • ITC has developed one such solution

35
Bringing (Wind) Power to the People
36
President Obamas Vision
  • One of the most important infrastructure
    projects that we need is a whole new electricity
    grid if were going to be serious about
    renewable energy, I want to be able to get wind
    power from North Dakota to population centers,
    like Chicago.

Source Transcript from appearance on Rachael
Maddow Show of October 28, 2008
http//www.msnbc.msn.com/id/27464980/.
37
U.S. Wind Map
38
Population Centers
Population Centers
39
Green Power Express
Population Centers Green Power Express
40
Green Power Express Benefits
  • Increases electric reliability and system
    efficiency
  • Facilitates the movement of approximately 12,000
    MW of power from the high efficiency wind
    abundant areas
  • More efficient use of land
  • Creates jobs in the U.S.
  • Avoidance of system congestion
  • Reduces carbon emissions by up to 34 million
    metric tons, equivalent to seven to nine 600 MW
    coal plants, or nine to eleven million autos(1)
  • Largely resolves Midwest ISO generation
    interconnection queue issues for region
  • Can be staged to optimize the realization of
    benefits

VS
(1) According to an independent study by CRA
International
41
Benefits Competitive Fuel Prices
Source The Brattle Group
42
The Trillion Dollar Question
43
The Trillion Dollar Question
  • According to some estimates, the U.S. will
    require 1 trillion dollars to rebuild the energy
    infrastructure (generation, transmission and
    distribution)
  • If you had 1 trillion, what would you do?
  • Would you perpetuate an inefficient and
    imbalanced system?
  • Or, would you take a fresh look at how to make
    the best use of resources?

44
Moving Forward
  • Once you have answered the 1 trillion question,
    there are still some remaining questions
  • Remember my advice on advice
  • Here are the answers
  • Independent regional planning Interconnection-wid
    e regional planning using existing infrastructure
  • Cost allocation Method that harmonizes costs of
    regional transmission with benefits
  • Federal siting authority Allows states to
    continue to site transmission but after one year,
    FERC would have backstop authority
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