T&D World Magazine

ITC Midwest Reaffirms Commitment to Invest, Improve Performance of Transmission Grid in Response to IPL Complaint

ITC Midwest LLC, a wholly owned subsidiary of ITC Holdings Corp. reaffirmed its commitment to continuing its efforts to make the necessary investments and improvements to safely and reliably operate the transmission system, consistent with the commitments that were made to regulators a year ago in seeking approval of the sale of the assets from IPL to ITC Midwest, and with its responsibility and duty as a public utility. The company reaffirmed its commitment following the complaint filed by Interstate Power and Light Company (IPL) with the Federal Energy Regulatory Commission (FERC). The complaint, filed under Section 206 of the Federal Power Act, primarily alleges that ITC Midwest’s 2009 forecasted Attachment O rate contains high projected operations and maintenance and administrative and general expenses.

“We are committed today as we always have been, to operating the ITC Midwest system responsibly and prudently and to address the historic lack of investment, known reliability and congestion issues, meet new mandatory reliability standards, and to facilitate the interconnection of renewables,” said Joseph L. Welch, chairman, president and CEO of ITC Holdings Corp. “To that end, we find IPL’s decision to file a 206 Complaint with FERC regarding ITC Midwest’s 2009 forecasted rate disappointing. When we sought regulatory approval of our transaction, our commitments were clear and direct -- to invest, rebuild, and improve the performance of the transmission system through best-in-class operating and maintenance practices. We have an obligation to customers to operate this system in a manner that meets those standards and we are committed to doing that.”

ITC Midwest purchased the electric transmission assets from IPL in December 2007. At that time, both companies indicated the acquisition would benefit customers through improved reliability and system performance, Welch said.

Jon E. Jipping, executive vice president and chief operating officer said that the company believes historic spending on the ITC Midwest system was inadequate to address the condition of the system, and to provide an acceptable level of reliable customer service. ITC Midwest’s commitment to restore the system to industry standard performance requires capital investments and expenditures on operations and maintenance, as well as administrative and general expenditures that support those efforts. Therefore, the proposed annual expenditure of $19 million for maintenance activities included in its 2009 forecasted rate is necessary to address many of the fundamental performance issues with the under-invested transmission system. In comparison, continuation of IPL’s previous annual spend of approximately $6 million simply is not sufficient for us to address the known problems on the system and deliver reliable transmission service, Jipping said.

“While we are disappointed in the action taken by IPL, ITC Midwest and IPL will continue to work very closely to address the energy needs of our customers. We are working together on many levels and are committed to keeping the lines of communications open and ensuring that the activities of ITC Midwest are transparent. We believe that the review prompted by the 206 Complaint will show that our investments are appropriate and needed to meet FERC’s vision of a robust transmission system to address the needs of the system both today and tomorrow.”

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