News 
2005
| Statement: November 17, 2005 |  View Printable PDF Version |
| Docket Number: RM06-4-000 |
Statement of Chairman Joseph T. Kelliher on transmission
pricing proposed rules
"One of the major goals of the Energy Policy Act of 2005
is strengthening our energy infrastructure, especially the transmission
grid. Our nation's transmission system has suffered from underinvestment
for a sustained period. In 2004, the interstate transmission system
expanded by a total of 0.6 percent in circuit miles. Transmission
congestion has been rising steadily since 1998. Transmission underinvestment
is a national problem. We need a national solution. Transmission
pricing reform can be an important part of the solution.
"There are several theories to explain underinvestment in
transmission. One theory is that the Commission's pricing policies
do not adequately encourage investment. Congress directed us to
explore the merits of these theories. Today we issue proposed
rules that would make certain reforms in transmission pricing.
The goal of proposed rules is clear: secure greater investment
in transmission grid.
"A stronger transmission grid will increase electric system
reliability and promote competition. We seek to encourage the
development of a transmission grid that can fully support competitive
markets. Greater grid investment will also make it more difficult
to engage in undue discrimination or preference in transmission
service, since it is more difficult to detect undue discrimination
or preference when the transmission grid is constrained.
"The proposed rules encourage investment in transmission
in all regions, and by both vertically integrated utilities and
transmission companies. Transmission companies are a proven vehicle
for transmission investment. Internal analysis at the Commission
shows that transmission companies are investing five times as
much as prior owners. We want to reinforce that success. The Commission
has been working on transmission pricing reform for nearly three
years. I am pleased that we are taking this step today and I support
the order."
| View Printable PDF Version |
