could be generated in the Southwest region, which would require additional long-distance transmission. Construction of such lines will depend on the regulatory environment and government policy; the transmission technology is available, although further improvements would be beneficial.

T&D expenditures are unlikely to be linear over the next 20 years. Representatives of EPRI and the Edison Electric Institute (EEI), which funded the Brattle study, have suggested that the split would be approximately one-third during the first 10 years and the remaining two-thirds over the second 10 years.41 The AEF Committee has assumed that 40 percent of the expenditures should be made before 2020, with the remaining 60 percent between 2020 and 2030. Thus investments averaging $9 billion per year would be needed in the transmission system from 2010 to 2020, with approximately $2 billion per year of this total dedicated to modernization.42 From 2020 to 2030, an average of approximately $14 billion per year will be needed, including $3 billion per year for modernization.

As discussed in the section “Barriers to Deploying a Modern T&D System,” utilities and transmission operators may find it more difficult to raise the relatively small amount needed for modernization than to raise the more substantial amount needed for expansion. If modernization were not included, however, utilities would have to continue using existing technologies for control, sensing, and monitoring equipment, and the nation would be deprived of the many benefits discussed here.

For distribution systems, an investment of $26 billion per year would be needed from 2010 to 2020 ($19 billion for expansion, $7 billion for the modernization increment). From 2020 to 2030, approximately $38 billion per year would be needed (including $10 billion for modernization).

POTENTIAL BENEFITS OF A MODERN T&D SYSTEM

A modern T&D system would offer significant benefits. Costs to consumers could be reduced through more efficient electricity markets; national security could be

41

This estimate was confirmed by personal communications with experts at EPRI and EEI.

42

Transmission investments were $7.8 billion in 2007, according to EEI. Very little of this amount was for modernization, so the total would have to be increased slightly from the committee’s target annual expenditures of $9 billion to include the modernization portion of $2 billion.



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