Invest in the Future:
Modernize the Transmission Grid

The U.S. and Canadian transmission grid consists of more than 200,000 miles of high-voltage lines. The system was built over the past 100 years, primarily by vertically integrated utilities that generated and transmitted electricity locally for the benefit of their native load customers.¹

Over the past 15 years, successive federal policy initiatives have promoted the development of regional power markets that transmit power longer distances. Reliable electric service and regional markets depend on strong transmission systems.

As a result, the system must be reinforced and modernized to connect new generation to the network, reduce congestion, and carry lower-cost electricity further distances.

Necessary transmission investments include building more high-voltage power lines, upgrading or rewiring existing lines, and replacing transformers.

Since the beginning of 2000, the electric power industry has invested more than $46 billion in the nation’s transmission system. In 2007 both shareholder-owned electric companies and stand-alone transmission companies were projected to invest $8.3 billion in the nation’s transmission grid—or 20 percent more than was invested in 2006. Overall, shareholder-owned electric companies are expected to invest $37 billion in the transmission system between 2007 and 2010.² 

It is becoming more evident that rising construction material costs are an increasingly important driver contributing to the higher actual and planned utility industry infrastructure investments.  According to the latest Handy-Whitman Index of Public Utility Construction Costs, since 2000 construction costs have increased by an average rate of 4.8 percent per year (32 percent since 2000) for transmission.

¹The Brattle Group, Why Are Electricity Prices Increasing? An Industry-Wide Perspective. Prepared for the Edison Foundation, June 2006, page 51. Native load customers are those customers whom the utility is obligated to serve either by statute or by contract.
²Actual transmission and distribution investment data from EEI Annual Property & Plant Capital Investment Surveys. Planned transmission investment data from EEI's Electric Transmission Capital Budget and Forecast Survey.