Over the past several months, everyone from media personalities to politicians has expounded on a long list of economic problems that have arguably created a one-state depression in Michigan. Most of us have heard the gloomy statistics so many times, we could recite them in our sleep. To jog your memory, here are just a few:
>> According to the Citizens Research Council of Michigan, the state lost 21 percent of its jobs over the past decade, which amounts to 820,000 positions statewide. Some sources peg the number of lost jobs at more than 1 million.
>> Michigan continues to have one of the highest unemployment rates in the nation, hovering around 14 percent.
>> Over the past 10 years, Michigan dropped from the nation’s 20th wealthiest state to the 40th wealthiest state, based on per-capita income.
The list could go on, but you get the idea. Identifying problems is easy; fixing them takes true leadership. Clearly, the status quo is no longer an option.
After 39 years in the utility business, I’m convinced that energy is the key to Michigan’s — and the nation’s — future. When a group of fellow employee investors and I started ITC in 2003, we envisioned becoming a leader in the build-out of a more reliable and robust transmission system capable of meeting the needs of a 21st century, energy-intensive economy. Today, ITC is the nation’s only fully independent high-voltage transmission company. We own and operate transmission systems in Michigan, Iowa, Minnesota, Illinois, and Missouri, including approximately 15,000 line miles.
The electrification of our country at the turn of the century was one of the greatest feats in American history. When the United States was first electrified, it was done city-by-city and then interconnected in an electrical patchwork quilt. This resulted in a parochial system where individual utilities and states focused solely on their own needs, rather than on the needs of the whole.
Worse, underinvestment in the nation’s electric transmission grid over the past three decades has left it unreliable, inefficient, and unable to meet growing demand. Seventy percent of the nation’s high-voltage transmission lines and large power transformers are at least 30 years old. According to the U.S. Department of Energy, major power outages and power quality disturbances cost our economy between $25 billion and $180 billion annually.
In an effort to cover our future energy needs, more than half of all states have adopted renewable portfolio standards, which typically require electricity providers to obtain a minimum percentage of their power from renewable energy resources by a specific date. As America transitions from its reliance on fossil fuels to renewable generation sources such as wind and solar energy, the nation’s antiquated transmission system has become our Achilles’ heel. According to interconnection queue databases, there are almost 300,000 megawatts of wind projects (more than 20 percent of the nation’s electricity needs) waiting to connect to the grid. They haven’t been able to make the connection because there’s inadequate capacity to carry the electricity these sources would produce.
While renewable energy sources are abundant, many are located in sparsely populated areas, including the upper Great Plains states. Moving electricity from wind-producing regions to population centers farther east would require extra-high-voltage transmission lines carrying 765 kilovolts that extend for thousands of miles. That modern transmission network simply does not exist in the United States.
Blackouts can be inconvenient, but the more reliant consumers become on technology, the more energy-dependent we become. Imagine the future inconvenience when millions of people can’t charge their plug-in electric cars or other essential devices because of an unreliable energy grid.
How does this impact our economy? Current laws make it almost impossible to create the high-voltage backbone America needs. A regionally planned, nationally coordinated transmission superhighway would not only improve reliability, it would stimulate the economy and create jobs.
New energy technologies are already making this happen.
At ITC, one of our greatest challenges is finding workers who have the necessary training to fill skilled-labor jobs. Approximately half of the nation’s utility workers will reach retirement age in the next five years. To prepare for this eventuality, ITC has developed strong relationships with several community colleges in Michigan to support electric utility training programs that prepare students for high-quality careers in the electric transmission industry. According to the Milken Institute, proposed investments in the energy sector could create more than 1.4 million construction and R&D-related jobs in the U.S. by 2012. Now, imagine the job creation numbers if America establishes a national energy policy!
If our nation is to reduce its dependence on foreign oil, meet renewable energy standards, and address climate change and other environmental challenges, it must first modernize the rules that govern the grid. To achieve these goals, we need visionary leaders who will set the wheels in motion for a high-voltage transmission backbone that extends beyond the parochial paradigm standing in the way of America’s energy future.
Without a doubt, the energy industry can make a dramatic, positive impact on the economy — both here in Michigan and throughout the nation.
Welch is chairman, president, and CEO of ITC Holdings Corp. in Novi.