For-profit transmission system gains ground


Madison Gas & Electric Co., Madison, Wis., reported Friday it will join the American Transmission Co., which hopes to become the nation's first for-profit independent electric transmission system by Jan. 1, 2001.

A proponent of an independent transmission system, Madison Gas & Electric (MGE) favored landmark Wisconsin legislation that allows utility companies to spin off their transmission assets into an independent company.

"We are looking forward to joining the ATC, which will create more certainty in the marketplace and give all companies fair access to power," said Mark Williamson, MGE executive vice-president.

Under the ATC agreement, MGE will spin off its transmission assets, valued at $35-40 million. The company owns about 8% of the state's transmission system.

On Friday, ATC filed documents with the state establishing a limited liability company to acquire and hold transmission assets and a management company to operate the transmission system. ATC will be able to make regulatory filings, pursue financing options, and take other necessary steps to assure safe and reliable operation of the electric transmission system beginning Jan. 1, 2001, explains Jose Delgado, CEO of the newly formed ATC Management Inc.

Formation of the company still requires federal and state regulatory approvals. It will be regulated by the US Federal Energy Regulatory Commission for all rate terms and conditions of service. The company ultimately will be a transmission-owning member of the Midwest Independent System Operator.

As a result of joining the ATC, MGE's rates for electric transmission are expected to improve over the next 5 years, compared to other Wisconsin utilities. The company does not anticipate any impact on its earnings as a result of joining the ATC.

In May, MGE joined the Midwest ISO, an organization of Midwest utilities that oversees the regional transmission market. The ATC creates another layer of independence, the company said.

Other ATC members include Wisconsin Energy Corp., Alliant Energy Corp., and Wisconsin Public Power Inc. MGE generates, transmits, and distributes electricity to 125,000 customers and transports and distributes natural gas to 112,000 customers in south-central and western Wisconsin.

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