GridLiance: Helping Out the Little Guy
By Jim Vess
Most public power utilities – such as municipal utilities and cooperatives – have not been able to invest in and financially benefit from transmission projects because they lack the scale, planning infrastructure and regulatory influence to effectively participate in the Regional Transmission Organization (RTO) planning process. This inequality with larger investor-owned utilities (IOUs) in the planning of new transmission construction projects has left them unable to earn margins from regionally-funded projects that would offset rising transmission rates. In many cases, these smaller public power utilities do not have the interconnected transmission networks enjoyed by large utilities because the regional transmission planning process does not always reflect the needs of public power.
This is where GridLiance enters into the picture.
GridLiance, formed in 2014 and backed by Blackstone Energy Partners, is the country’s first competitive transmission company focused on providing public power municipal utilities and cooperatives a chance to participate within the RTO structure and have their transmission development needs addressed. Through subsidiary transmission companies formed to operate in each RTO, GridLiance will jointly plan, develop, own and operate transmission assets with public power utilities. This will provide their public power partners with opportunities to invest in regulated transmission development projects.
GridLiance has 30-year joint development agreements with the Missouri Joint Municipal Electric Utility Commission (MJMEUC) and the Oklahoma Municipal Power Authority (OMPA), operating within MISO and SPP through its subsidiaries, South Central MCN, LLC and Midcontinent MCN, LLC, respectively. These partnerships with public power will allow GridLiance to compete with investor-owned utilities that are currently building most of the transmission in MISO and SPP.
GridLiance is also actively seeking opportunities to acquire and operate existing electric transmission lines and related facilities owned by municipal, cooperative and joint action agency utilities that would prefer to focus on their core load-serving business.
On September 1st, the company announced its first acquisitions, which include more than 400 miles of transmission line in Missouri and Oklahoma as well as the associated infrastructure and substations. GridLiance is acquiring a 10-mile, 69-kV transmission line from the city of Nixa, Missouri, which runs between Springfield and the Southwest Power Administration. The company will also acquire 410 miles of 69-kV and 115-kV line from Tri-County Electric Cooperative (TCEC) in Missouri. Both transactions are expected to close by the end of the year. Upon closing, GridLiance will assume full operational control of the transmission systems.
“We are excited to join forces with TCEC and believe that our partnership will bring important benefits, including never before available opportunities for TCEC to invest in Southwest Power Pool transmission projects that will reduce congestion and provide more reliable transmission service,” said Ed Rahill, GridLiance President and CEO, in a statement.
Also, GridLiance plans to bid to construct SPP’s North Liberal-Walkemeyer 115-kV project, which would be the grid operator’s first competitively-bid transmission project.
“Public Power is core to the nation’s energy system, with its obligation to deliver safe and reliable electric service to millions of residential customers and thousands of businesses,” said Rahill, in a press release. “Despite the important role Public Power plays, these entities have been largely excluded from participating in the planning of and investment in new transmission infrastructure as well as the financial and service reliability benefits they provide to customers.”
“Through our innovative, low-cost operating model, we are bringing together Public Power utilities to create a strong, unified regional entity that can better represent Public Power’s interests in the RTO planning and project award process,” he continued. “Working together, we will have the necessary scale and resources to more effectively invest in, develop and construct new transmission infrastructure and ensure that Public Power is a viable competitive alternative to incumbent IOUs now building most of the projects.”