WisBusiness: ATC’s Cost Increase Surprises Watchdogs

By Brian E. Clark

MADISON – Representatives of business and consumer groups say they are alarmed by increased costs forecast by American Transmission Co. to improve the state’s power grid.

The 10-year, $3.4 billion plan rose $600 million from last year. That 21 percent increase shocked Nino Amato, president of the Wisconsin Industrial Energy Group; and Charlie Higley, executive director of the Citizens Utility Board, which represents consumers.

The ATC document details proposals for 1,000 miles of upgraded lines and 500 miles of new lines in the state. Company executives say the price tag for grid improvements is going up because of increased steel, labor and energy costs.

They say Wisconsin is underserved and will continue to be underserved, even after the $420 million Wausau-to-Duluth power line is finished next year.

“We will be monitoring these projects very closely,” said Amato. “We need to improve the grid, but we don’t want them to gold-plate the system. And they have an incentive to do that because they are guaranteed a good return for everything they build.”

Higley said his group is also concerned that ATC will build unneeded projects.

“We will be watching what they propose very closely,” he said, noting that the costs of power have been rising steadily in recent months. “And we will encourage the state’s regulators to do the same.”

Amato said a recently approved transmission line had a guaranteed return of 13 percent. Fortunately, he said the company had shown flexibility and even dropped projects when it was convinced they were unnecessary.

Amato said his group would monitor projections and cost analyses and push the state Public Service Commission to look closely at ATC building plans.

In a joint statement from Amato’s group, Wisconsin Manufacturers and Commerce and the Wisconsin Paper Council, the group said transmission, generation and energy programs must be integrated.

The business groups said they would only support PSC approval of “necessary initiatives that are built upon systematic planning and which clearly show strong potential to lower customers’ energy costs.

“If increased reliability is purchased at the cost of companies being forced to shutter their facilities or shift production and employment elsewhere, Wisconsin’s significant economic challenges will only be exacerbated.”