Title: ITC
1The Energy SuperhighwayThe Key to Wind Energy
IntegrationJoseph L. Welch, Chairman, President
and CEOJune 30, 2009
2Advice 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
3Agenda
- Who is ITC?
- Why Independence is Significant
- Changing Landscape, Industry
- Bringing (Wind) Power to the People
- The Trillion Dollar Question
4Who is ITC?
5Who 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
6ITC System Statistics
7Why Independence is Significant
8How 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
9Underinvestment
10Underinvestment
11Underinvestment
12Underinvestment
13Underinvestment
14Underinvestment
15Underinvestment
16Underinvestment
17Underinvestment
18Underinvestment
19Underinvestment
20Underinvestment
21Underinvestment
22Current 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
23Does 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?
24ITC 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
25Impediments 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
26Balkanization and Parochialism
27Changing Industry, Landscape
28Changing 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
29Dont 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
30Transmission 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
31Mine-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
32Nuclear
- 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
33Tapping 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
34Need Energy Superhighway
- To address these needs, our nation needs a robust
extra high voltage transmission grid - ITC has developed one such solution
35Bringing (Wind) Power to the People
36President 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/.
37U.S. Wind Map
38Population Centers
Population Centers
39Green Power Express
Population Centers Green Power Express
40Green 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
41Benefits Competitive Fuel Prices
Source The Brattle Group
42The Trillion Dollar Question
43The 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?
44Moving 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