ICF Consulting Predicts that just $8 Billion in New Transmission Build Investments will Lower Wholesale Power Prices by More Than US$12 Billion

ICF Consulting, Inc. recently completed a major study of transmission adequacy in the U.S. which forecasts the optimal amount of new electric transmission capacity builds and the investments needed to ensure continued grid reliability. It shows that strategic investments of just over $8 billion (net present value) over the next 26 years could lower the wholesale cost of power by approximately $12.5 billion (net present value). Further, if one assumes lower reserve margins from a more integrated system, the benefit is more than twice the cost, or approximately $18 billion. Finally, if one includes the benefit to the economy from reduced outages that could come from such investments (also called “value of lost load”), the benefit could rise dramatically to more than 8 times the cost of such investment. The average savings per current customer would be at least $30 (net present value)-reaching as high as $450.

Washington, DC (PRWEB) May 19, 2004

ICF Consulting, Inc. recently completed a major study of transmission adequacy in the U.S. which forecasts the optimal amount of new electric transmission capacity builds and the investments needed to ensure continued grid reliability.

This nationwide study was sponsored by Kohlberg Kravis Roberts & Company (KKR). It shows that strategic investments of just over $8 billion (net present value) over the next 26 years could lower the wholesale cost of power by approximately $12.5 billion (net present value). Further, if one assumes lower reserve margins from a more integrated system, the benefit is more than twice the cost, or approximately $18 billion. Finally, if one includes the benefit to the economy from reduced outages that could come from such investments (also called “value of lost load”), the benefit could rise dramatically to more than 8 times the cost of such investment. The average savings per current customer would be at least $30 (net present value)-reaching as high as $450.

“These are substantial savings for consumers in the U.S.”, said Marc Lipschultz of KKR. “We were encouraged to see the high degree of leverage that the right transmission investments have on reducing the wholesale cost of power.”

“It’s very complex and challenging to do the analysis right”, said Judah Rose, Senior Vice President of ICF Consulting. “Tradeoffs between generation and transmission need to be assessed-taking into account future fuel price, plant costs, regional power demand, impending environmental regulations, inter-regional grid transfer capabilities, and other assumptions.”

“The Value of Lost Load (VoLL) analysis is one that legislators and regulators should consider when making decisions about new transmission,” says Elliot Roseman, Principal with ICF Consulting. The Blackout last August proved just how dependent our economy is on electricity and how important enhanced reliability is to consumers.”

For more information on this study call 703.934.3637 or visit http://www.icfconsulting.com/powercosts

About ICF Consulting

ICF Consulting (http://www.icfconsulting.com) is a leading management, technology, and policy consulting firm. Drawing upon extensive industry knowledge, distinguished professionals, and innovative analytics, the firm develops solutions to complex energy, environment, emergency management, homeland security, community development, and transportation issues. ICF Consulting’s approach to these issues is strengthened by its expertise in information technology, organizational improvement, program management, and communications. Since 1969, ICF Consulting has been serving major corporations, government at all levels, and multinational institutions. More than 1,000 employees serve these clients from key business centers in the Americas, Europe, and Asia Pacific.

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