Utilities Offer Plan To Create Unified Grid Transmission Systems Would Be Run By A Newly Formed Company

Avista Corp. is among six Western electric utilities that plan to consolidate their high-voltage transmission holdings into a single company to comply with federal deregulation requirements.

TransConnect, the new company, will then participate in another venture intended to bring most of the transmission wires in the Pacific Northwest and four other states under the control of a single operator able to increase the efficiency and reliability of the entire grid.

TransConnect and RTO West, the system operator, filed notice of their proposals Monday with the Federal Energy Regulatory Commission.

FERC last year ordered all owners of transmission systems to plan to form nonprofit regional transmission operators - RTOs - by Monday.

Systems are supposed to be in place by Dec. 16, 2001.

TransConnect would consist of Avista, Portland General Electric, Montana Power Co., Puget Sound Energy, Nevada Power Co. and Sierra Pacific Power Co.

Other entities participating in RTO West are the Bonneville Power Administration, owner of by far the biggest share of transmission lines in the Northwest, as well as Idaho Power Co. and PacifiCorp.

Utilities will remain independent.

TransConnect would be a for-profit company that would own or lease the utilities’ transmission facilities, a network that spreads through Oregon, Washington, Nevada, Montana, along with parts of Idaho and California, and carries a book value of about $1 billion.

“Individually, we’re all very small,” said Jim Piro, vice president of business development for Portland General Electric. “But together, we become a very large transmission system.”

PacifiCorp pegs the value of its 15,000-mile system at $1.5 billion.

Avista spokeswoman Catherine Parochetti stressed that the TransConnect proposal is just that, a proposal. Members are not sure how much of their transmission system will be sold or leased to TransConnect, she said.

Don Furman, PacifiCorp vice president for transmission, noted an effort three years ago to authorize a single grid operator broke down over disagreements on how to price use of the grid.

The tentative pact filed with FERC freezes the costs of transmitting power over the existing system as they are today, he said.

Users will continue to pay what they do now, he said, and participating utilities will collect the same revenue.

Meanwhile, Furman said, utilities will develop incentives to encourage building of additional transmission capacity only when and where needed.

The Associated Press contributed to this report.