Delgado Touts ATC Model for Transmission Investment; Stand-Alone Transmission Companies Focus on Planning, Building Multi-Need Projects

WAUKESHA, Wis.--March 7, 2005--The stand-alone transmission company model is in a better position to make the necessary system investments because it focuses solely on providing reliable transmission service on a non-discriminatory basis to all users, according to American Transmission Co. President and CEO Jose M. Delgado in remarks today at the 7th Annual Transmission Summit in Washington, D.C.

ATC has invested more than $500 million in strengthening its transmission system since Jan. 1, 2001, when it began operations as a stand-alone transmission company. The investment doubled the company's assets, making it a $1 billion company last year. An additional $300 million investment is planned for this year.

"We have significant congestion in the upper Midwest, created in part by a lack of investment," said Delgado. "The stand-alone model has worked very well in Wisconsin and Michigan, and it's a model that may be transferable to other regions.

"There is considerable debate as to why companies are not investing in the system. While there are real impediments to getting new transmission facilities built, that does not mean it can't be done. Policymakers should look at companies like ATC, who are making real investment, to figure out what is working and why."

Delgado said ATC's structure properly aligns the incentive to build with the needs of all customers in its service area, which is not the case for either integrated companies or merchant transmission. Integrated utilities face difficult decisions in the allocation of their capital, and building transmission for others is not as profitable as other choices available to them.

On the other hand, merchant transmission is built based on specific market opportunities which seldom present themselves in a stable way, and that is not the way to meet the "obligation to serve" that the public expects from an electric utility.

"In the long run, merchant transmission and reliance on market-based approaches will not work to stimulate significant investment," said Delgado. "The majority of investment will come from regulated companies where there is an incentive to build. Our ability and willingness to expand our system is driven by our focus as a stand-alone transmission company, which is fundamentally different from other business models."

Delgado added that a company providing only transmission service attracts and builds the expertise necessary to successfully invest in the system. "At any given time, we have hundreds of projects - from small maintenance projects to the largest transmission line project in the state's history - in the works. We learn how to do it better by doing it every day," he said.

ATC plans, constructs, operates, maintains and will expand its transmission facilities to provide adequate and reliable transmission of power. ATC provides nondiscriminatory service to all customers, supporting effective competition in energy markets without favoring any market participant. A member of the Midwest ISO, ATC owns more than 8,900 miles of transmission lines with a total investment of approximately $1 billion in facilities in portions of Wisconsin, Michigan and Illinois. For more information, visit our Web site at www.atcllc.com.