Fixing the Rules
For TransÉnergie, the victory had come at a high cost—about $20 million in legal bills, lobbying efforts, and extra engineering costs on top of the cable’s original $125 million price tag, not to mention lost momentum in its bid to lead the emerging merchant-transmission market. Trans-Énergie lost out to a competitor in a bid to build a second merchant DC power line to Long Island last fall (but it remains in the running to build a link from northern New Jersey to Queens that would connect the New Jersey and New York grids). Similar politi-cal dramas* could keep the merchant-transmission market hobbled for years.
Participants in the Cross Sound Cable saga say that TransÉnergie could have surmounted its political obstacles sooner. Donahue wishes his firm had surveyed the bedrock along the cable route more intensively. He also wishes it had “educated” Connecticut politicians on the -cable’s bene-fits early on. (TransÉnergie had brought in United Illuminating partly to help it master the local political landscape, but insiders say the partner did little to help sell the project.) Grilli, a veteran of New York politics, says Trans-Énergie also should have responded more aggres-sively to Blumenthal’s high-profile attacks. “TransÉnergie just let him go out there and define the issue. It was extremely difficult to wheel that back.”
The larger problem, of course, is the mishmash of state and federal rules that govern power transmission, which leaves entrepreneurs like Donahue vulnerable to political attack. Power-transmission experts like Sally Hunt say the merchant–transmission market won’t be stable or profitable until the companies, power authorities, and politicians involved hash out a reasonable process for coördinating regional investments in power transmission. A good place to start, according to Hunt, is with the rules about how transmission services are bought and sold, which must be redesigned to reward the improved reliability that the most sophisticated devices deliver.
These issues are highly technical and not at all sexy. But the alternative to sorting them out—and opening the door for future Cross Sound Cables—could be regular blackouts of historic proportions. Power politics “doesn’t make big headlines, but it’s really the important issue,” says Hunt. “It could really prevent the development of good technology.”