April 2005

TransÉnergie: Playing Two Power Games

Laying a new transmission line under Long Island Sound was easy. Navigating the political waters wasn't.

By Peter Fairley

On a Thursday afternoon last June, state troopers from Connecticut and New York fanned out on a manhunt. Their quarry: several of the dozen Connecticut legis-lators and commissioners with the power to make or break Massachusetts-based TransÉnergie U.S., a pioneer in advanced high-voltage power transmission owned by Mont-réal power utility Hydro-Québec. For two years, political squabbling had idled an innovative 40-kilometer underwater power line installed by Trans-Énergie to strengthen the link between the Connecticut and Long Island power grids. On the Thursday in question, Trans-Énergie, Long Island's power utility, and Connecticut regulators had finally found a way to end the impasse. All they needed to seal the deal were signatures from all 12 of those Connecticut politicians.

The manhunt marked the dramatic close to a saga that made TransÉnergie a poster child for the confusion that reigns in the U.S. power market. In the early 1990s, the U.S. Congress threw wholesale power markets open to competition, enabling state utilities to buy bulk power from generators located hundreds or thousands of kilometers away (much of New England and New York's power, for example, comes from Québec). But regional coördination of power grids to accommodate long-distance power delivery has stalled. All too often, coördination has fallen victim to interests that stand to lose from increased competition; and federal law gives states the upper hand in regu-lating electrical transmission, thwarting the best efforts of power regulators in Washington. "It's really a mess," says Sally Hunt, a power-industry expert affiliated with National Economic Research Associates, a consultancy in New York.

TransÉnergie's project got caught in a tussle between Connecticut and New York. "We were stuck in the middle of a much larger policy debate," says Trans-Énergie U.S. president Jeff Donahue.

What makes the gridlock tragic is that it's stifling the application of advanced transmission technologies that promise to not only facilitate power sharing across the continent's aging power grids but also make them more reliable. TransÉnergie's Cross Sound Cable is one of the first in a string of power lines that exploit digital switching, a technique that allows unprecedented control over electrical flows in the network while simultaneously filtering out dangerous spikes and sags (more on that later).

The benefits of the Cross Sound Cable were initially lost on Connecticut politicians, who believed that the cable would serve only to feed Long Island's seemingly insatiable appetite for energy at the expense of Connecticut's consumers and natural environment. Technical missteps by TransÉnergie deepened its problems in Connecticut, giving state officials license to use the company as a political whipping boy. But a very lucky break, in which Trans-Énergie and its supporters shrewdly exploited the -cable's advanced technology, turned the tables. When the August 14, 2003, blackout threw Long Island into darkness (along with much of the northern United States and Ontario), the Cross Sound -Cable was pressed into service to help stabilize the grids. Ed Grilli, chief of staff for the Long Island Power Authority, says that August 14 set the stage for a po-litical breakthrough: "Quite frankly, what saved us in the end was the blackout."