HispanicBusiness

The highway to abundant supplies of green energy runs past rolling hills of turbine generators spinning in the wind and rack after rack of solar panels collecting the power of the sun. As new as the highway is, traffic increases every day.

One would think the supply of alternative energy is powering rapidly. But the challenges can be great, not the least being transmission lines to carry energy generated by alternative means from the place it was produced to urban markets.

"Transmission is the highway for moving electricity," José Delgado told HispanicBusiness magazine.

Mr. Delgado has firsthand knowledge of the importance of transmission lines. The Cuban-born retired executive helped form and became the CEO of the one of the first multistate, transmission-only utilities in the United States—American Transmission Co. (ATC).

Other utilities across the nation generate and distribute electricity, which means they own and maintain transmission lines. Independent electricity generators can get access to the transmission lines, but there are costs associated with that, and the utility generally limits the amount of megawatts an independent generator can transmit.

Pooling of Resources

ATC was formed in 2000 with the intent of pooling together the resources of smaller municipal, regional and state units to make transmission of electricity easier and more affordable.

Before that, Mr. Delgado spent 30 years at the Wisconsin Electric Power Co., starting as an electrical engineer and ending up as vice president of Electric Systems Operations.

"Without transmission, you do not have markets for electricity," Mr. Delgado explains. "Without markets, you don't have the whole economy that comes from being able to bid and buy electricity for a lower price."

Five Wisconsin-based electric companies—Alliant Energy, Madison Gas & Electric, Wisconsin Electric, Wisconsin Public Power Inc. and Wisconsin Public Service—participated in the formation of ACT. Startup funds came from various investment sources, including municipal-owned and coop-owned enterprises and Wall Street. In addition, electric companies traded assets for equity in the company.

ATC went live Jan. 1, 2001. By then a sixth company, Edison Sault Electric, had joined. The transfer of assets included land rights covering more than 6,000 miles of transmission lines and more than 500 substations. Poles, wires, substations and other transmission facilities had a book value in excess of $500 million.

Today, ATC's assets total $2.75 billion. It provides electric transmission service in Michigan, Minnesota, Wisconsin and Illinois. It maintains more than 9,400 miles of high-voltage transmission lines and 510 substations. In 2009, ATC had earnings of $213.3 million.

In a world that's going green, it is up to transmission companies to provide the means for transporting alternative or renewable energy—wind, solar and geothermal—to consumers across the nation.

Obstacles Remain

More utility companies across the nation are facing pressure to generate electricity from renewable sources. Jim Owen, director of media relations at the Edison Electric Institute in Washington, D.C., confirms that about 30 states are under mandates to deliver a certain percentage of renewable energy to customers, according to the Los Angeles Times. But at least two factors create hurdles toward accomplishing this—opposition to the placement of transmission lines and the ability to carry all the renewable electricity being generated.

In February, a three-judge panel from the U.S. 9th Circuit Court of Appeals in San Francisco ruled 2 to 1 to stop the U.S. Department of Energy's efforts to establish new high-voltage electric transmission lines that would cover 100 million acres in 10 states, reported the Los Angeles Times. The area included state and national parks in the Mojave Desert in California.

Mr. Delgado said ATC has never been denied a line or a right of way.

"My experience with ATC is that if you explain to the people the needs and you adjust to mitigate any difficulties," they begin to understand, he said. While opposition to transmission-line placement might be mitigated, such efforts take time and can severely delay adding more transmission lines to the electric grid.

Another hurdle to getting renewable energy to consumers are limits placed on how much electricity can be transmitted over lines owned by utility companies that produce and distribute their own electricity.

In 2010, Kern County, Calif., had a thriving wind- and solar-power industry. The Kern County Board of Supervisors had approved major wind and solar projects that were capable of generating 8,600 megawatts of electricity, from both developed and proposed projects. But Southern California Edison Co. only offered these projects 4,500 megawatts of transmission capacity, according to the Bakersfield Californian.

Not having the capacity to deliver all the electricity a renewable-energy company generates hampers not just the ability to replace energy created by nonrenewable sources, but stifles the entrepreneurial spirit, fails to let an industry grow and lessens the ability to create jobs.

"What you have is people generating their own (electricity), and then not being able to sell it or not being able to buy," Mr. Delgado says.

This is where a company such as ATC becomes invaluable. Its mission is to plan, operate, site and maintain the transmission lines to all of the customers in the area. In short, it can provide a cheaper means of getting renewable energy from its source to the users.

"It does work," Mr. Delgado says. "A tremendous amount of money has been made in this business."

One thing is certain: The need for renewable energy is great and the willingness of entrepreneurs to provide it is great. But the obstacles in getting the renewable energy from point of creation to point of use need to be overcome.

Consumers look to renewable energy as helping cut down dependence on fossil fuels and as the wave of the future, but it is here now. In fact, in terms of making inroads into lessening dependence on the use of oil, the future arrived yesterday and the nation is off to a late start.