Aging Infrastructure, Congestion, Cost-Recovery Impediments, Siting Difficulties and National Security Concerns were all issues President Dwight D. Eisenhower faced more than 50 years ago. In 1956, without economic analyses or outcome assurances, Eisenhower took a leap of faith with extraordinary vision to create the national interstate highway system. This system has enabled the United States to become the economic behemoth it is today.

Fast-forward 50 years and aging infrastructure, congestion, cost-recovery impediments, siting difficulties and national security concerns (that is, reliability-compliance concerns) plague the U.S. electric transmission grid. The National Energy Policy Act of 2005 made a step toward an Eisenhower-like vision, but it is not enough. A national interstate transmission grid overlay is required to enable:

• A more sustainable national electricity supply portfolio, including tapping extraordinary renewable energy and generation technology potential

• Market efficiencies, including reduced congestion and lower line losses

• Broader impact of demand-side options and load leveling, lowering the need for new generation

• National security, by enhancing reliability beyond today's minimalist standards and removing supply option barriers

• Reduced reliance on aging infrastructure.

To effectively address cost-recovery and siting issues, interstate transmission assets — defined as existing and new transmission at voltages above 300 kV — should be entirely under the purview of the Federal Energy Regulatory Commission (FERC). This includes setting rates with pass-throughs at state retail levels and the siting of new interstate transmission lines. The authority over assets below 300 kV should remain as it is.

On July 23, 2007, FERC Commissioner Suedeen Kelly said, “We need a true nationwide transmission version of our interstate highway system — a grid of extra-high-voltage backbone transmission lines reaching out to remote resources and overlaying, reinforcing and tying together the existing grid in each interconnection to an extent never before seen.”

American Electric Power (AEP) has taken to heart this visionary message from the visionary leaders at FERC.

What would the national interstate electric transmission grid look like? AEP has collaborated with the American Wind Energy Association to create a conceptual framework for 19,000 miles (30,578 km) of new state-of-the-art 765-kV transmission to enable up to 400,000 MW of wind resources (“Toward a 20% Wind Electricity Supply in the United States,” 2007, U.S. Department of Energy and National Renewable Energy Laboratory). The cost would be US$60 billion, but consumer costs would be offset by avoided congestion costs of a robust interstate grid. Transmission is a significant value proposition with typical costs of about 8% of the total electric bill (www.eia.doe.gov/cneaf/electricity/epa/epat8p1.html).

We announced the I-765 interstate concept on Jan. 31, 2006, with a proposed 765-kV line from West Virginia to New Jersey, and our intention to work with others to carry out that plan. Since early 2006, AEP has:

• Formed two joint ventures with MidAmerican Energy Holdings Co. — Electric Transmission Texas, LLC (ETT) and Electric Transmission America, LLC (ETA) — to build extra-high-voltage assets in Texas, in the Southwest Power Pool (SPP) and throughout the United States

• Formed a joint venture with Allegheny Energy — Potomac-Appalachian Transmission Highline, LLC (PATH) — to build specific extra-high-voltage assets in PJM

• Entered into discussions with ITC Holdings Corp. to build 765 kV in Michigan and Ohio.

These joint ventures marry the more than 2100-mile (3380-km) 765-kV transmission system and expertise at AEP with the expertise of our partners.

As we move toward this interstate, however, we should not dust off old line and station designs. Our current 765-kV design, for example, has 40% lower line losses than the original 1960s design. With average transmission losses in the 3% range, we have lowered 765-kV line losses to less than 0.75% with our newer design.

AEP has an alliance with ABB to further 765-kV development, including the consideration of creative off-ramps to accommodate wind access, urban areas and limitations of existing local networks.

AEP applauds our leaders at FERC, and we feel our strategies and initiatives are the most effective means to achieve FERC's far-reaching objectives of transmission investment. We must begin to reform interstate transmission regulation by placing all assets above 300 kV within the purview of FERC. One company cannot achieve these goals. They can be achieved only when we all forge the interstate together.

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Michael Heyeck is senior vice president of transmission for American Electric Power. mheyeck@aep.com