Frequently Asked Questions
Q: Who can join The Western Transmission Consortium (TWTC)?
A: TWTC is open to any Investor-Owned Utility (IOU), Tribe, federal Power Marketing Administration (PMA), public power entity, electric co-operative (Co-Op), Independent Transmission Companies (ITC), or infrastructure investor interested in developing interregional or interjurisdictional transmission infrastructure in the West.
Q: Who came up with the idea for TWTC?
A: TWTC has multiple antecedents beginning with multi-jurisdictional collaboratives Ray Gifford, Bob Rowe and Tony Clark were involved in while implementing the Telecommunications Act of 1996 as state regulators. Inspired by Colorado state Senator Chris Hansen’s Western Power Players’ gatherings led Wilkinson Barker Knauer (WBK) to reach out to colleagues and contacts to focus on a West-wide institution devoted to building inter-jurisdictional, inter-regional transmission inspired by the for-profit “TransCo” model. Since initial discussions of the TWTC concept at CREPC and other venues, TWTC Development Company has reached out to former regulators, power executives and non-governmental organizations to make the concept a functioning entity solving business, operational and policy challenges across the West.
Q: What is The Western Transmission Consortium?
A: TWTC is a member-owned entity structured to facilitate development of interregional or interjurisdictional transmission infrastructure in the eleven western states. TWTC is currently in its development company (DevCo) phase, which will soon transition into The Western Transmission Consortium (TransCo) as governance, budgetary and initial project curation phases are completed.
Q: What is the corporate structure and governance of TWTC?
A: At the “DevCo” stage, the board and leadership are comprised of business and regulatory thought leaders across the region who advise on the internal governance issues and externally advocate for the DevCo. After an opening cycle of curated projects, TWTC will have a member-representative board and executive team, and “class voting” for load-serving entities and independent transmission companies. TWTC is an LLC, and project companies will likely also be LLCs.
Q: What is the mission of TWTC?
A: The mission of TWTC is to develop interregional or interjurisdictional transmission infrastructure in the West through a collaborative process involving infrastructure owners and investors, while remaining accountable to state and federal regulators.
Q: Will TWTC own the infrastructure?
A: No, as specific project opportunities coalesce out of TWTC’s work, TWTC will create individual project companies, and will retain a nominal interest in each project company until commercial operation of the project.
Q: What will the structure of the individual project companies look like?
A: The individual project companies will have flexible structures to meet the needs of the participants in the project, the financial structuring, and the cost allocation among the participants. There also may be pro rata investment opportunities for members in individual project companies.
Q: What is the difference between TWTC and an RTO/ISO?
A: RTO/ISOs cover the full suite of resource adequacy: building, owning and operating transmission infrastructure; along with the market functions. TWTC is focused on developing interregional or interjurisdictional transmission infrastructure in the West to the point of commercial operation. It is a for-profit transmission building entity that would complement any eventual market-making entity in the West and would augment and lend overarching support to the efforts of load-serving entities and independent transmission companies.
Q: Is TWTC a planning entity?
A: No. TWTC is not a planning entity. The Western Transmission Expansion Coalition (WestTEC) is Western Power Pool’s (WPP) West-wide regional planning effort. TWTC will work closely with WestTEC and any other planning entities active in the region. TWTC DevCo and WestTec share board members and remain aware of each other’s institutional goals.
Q: Are members allowed to develop projects outside of TWTC processes?
A: Yes. Members are not obligated to run each of their transmission projects through TWTC.
Q: What is the timeline for creating the TWTC?
A: TWTC Development Company, LLC, or “DevCo” was formed in late 2023. The DevCo entity is focused on gathering input from members and beginning workstreams needed to launch the full-fledged TWTC. The target launch of TWTC is early 2025.
Q: Is TWTC limited to certain states?
A: Yes. TWTC has focused project formation efforts in eleven western states: Arizona, California, Colorado, Idaho, Montana, New Mexico, Nevada, Oregon, Utah, Washington, and Wyoming.
Q: How are the interests of TWTC members aligned?
A: TWTC presents a business proposition to solve a west-wide problem by bringing together different business models under a collaborative umbrella to solve for different state policy preferences, while retaining accountability to regulators and respecting different values and priorities. TWTC is first a business proposition with incentives to build interregional, interjurisdictional transmission.
Q: What is the purpose of TWTC DevCo?
A: During the DevCo phase, TWTC will do four things: (1) conduct the Call for Projects and curation process, including supporting continued development and path to approval for the curated projects; (2) specify the workings of a fully-fledged TWTC, including corporate, business and administrative elements; (3) support LSE member filings seeking favorable regulatory treatment to sustain multi-year membership; and (4) conduct regulatory and stakeholder advocacy across the West and at FERC.
Q: What benefits does TWTC membership provide?
A: TWTC membership provides access to a vehicle designed to address the collective action problem preventing interregional and interjurisdictional transmission development in the West. TWTC puts the key western players in the same room to formulate projects and address the different state policy preferences while retaining accountability and respecting different values and priorities. At root, it provides west-wide facilitation, regulatory advocacy and stakeholder campaign roles that are crucial to the success of interregional / interjurisdictional projects but are hard for any one player in the industry to provide.
Q: What controls are in place to ensure the DevCo funds are spent wisely?
A: TWTC is implementing the following controls at the DevCo stage: a budget reflecting the workstreams to run the project curation process and launch the full TransCo, quarterly reports to members on the budget and workstreams, engaging a fractional CFO, an outside accountant and an independent auditor. In addition, the Board will provide monthly direct oversight.
Q: How do TWTC participants recoup their membership investment?
A: Participants in TWTC make money in two ways. Primarily, TWTC’s work will open specific opportunities to develop interregional and interjurisdictional transmission infrastructure via investment at the individual project company level. Secondarily, project companies will pay fees to TWTC as projects are developed. Those fees are designed both to incentivize TWTC to focus sharply on getting transmission built and to offset or return member capital contributions.
Q: Will TWTC support LSE efforts to obtain state regulatory approval for the capital investments?
A: Yes. TWTC will support regulatory filings as they are a critical factor in LSEs’ ability to sustain multi-year support and funding to develop interjurisdictional transmission projects. TWTC recognizes getting regulatory asset or accounting treatment will be a bespoke process for each utility unique to circumstances in a given state. Still further, TWTC understands public power and cooperative entities have another lens through which they will secure support for these long-term investments.
Q: What external advocacy efforts have taken place; have you spoken to regulators?
A: Through discussions with state regulators in the West, commissioners began expressing interest in the Consortium's progress. In addition, dozens of communications have taken place with non-profit entities interested in supporting opportunities to develop interregional and interjurisdictional transmission infrastructure. TWTC is open to discussions and has a communications plan to share the organization’s progress with interested parties.
Q: How does the budget work for DevCo and TWTC?
We have been formulating a DevCo budget, which largely corresponds to the workstreams. Those workstream are evolving as members share feedback, and members will have visibility through regular progress and financial reports. Once projects are solidified, DevCo or TransCo work for a specific project will be charged to that project company or participants. Budgeting for TransCo will have (1) more clarity after the DevCo stage, (2) some additional complexities related to growth in the organization and (3) more direct member (and member-appointed board) oversight.
Q: Are the membership dues to be paid on Day 1?
TWTC will have a staged process for membership dues for the DevCo phase. Payments will be due based on the member’s interest in continuing to the next stage gate in the DevCo process. Notably, TWTC recognizes some LSEs will need to obtain favorable regulatory treatment for their membership costs. TWTC also understands cooperative public power entities possess different incentives and imperatives when investing capital. After launch of the full TransCo, the need for ongoing membership dues will be determined by TWTC’s Board based on the revenue and funding model and anticipated expenses. Any remaining funding from DevCo at the time of the full TransCo launch will be retained for use in Transco.
Q: How does TWTC interact with efforts of the Western Power Pool (WestTEC) and Gridworks (Western States Transmission Initiative (WSTI))?
A: The entities are complementary. WestTEC and WSTI focus on transmission planning and project identification. TWTC focuses on project investment. Working together, these efforts can advance transmission development across the West.
Q: How is this different from the other efforts such as the SPP Markets+/CAISO EDAM/Pathways Initiative/WestTEC/WSTI?
A: TWTC is complementary to these efforts and entities. WestTEC and WSTI focus on transmission planning and project identification. TWTC focuses on project curation and investment. TWTC’s efforts do not deal with institutional responses such as EIM, EDAM or WEIS and Markets+. All these efforts, working together, can advance transmission development across the West.
Q: What if an RTO/ISO expands into or is created in the West?
A: TWTC is accretive to and enables any eventual RTO/ISO emerging across the West. Transacting for energy takes transmission; therefore, we believe TWTC makes market institutions more feasible. The singular focus on transmission building is meant to solve one of the impediments to a more interconnected system while solving the multiple coordination problems that make cooperation and collaboration across the region difficult.
Q: Does TWTC trigger any potential anti-trust implications?
A: TWTC has engaged one of the nation’s foremost experts, Howard Shelanski of Davis Polk, LLP, to help ensure the organization conforms to all applicable antitrust and competition policy laws.
Q: What regulatory approvals will the TWTC require?
A: The initial research finds TWTC does not require federal or state regulatory approval. Individual project companies are the entities that will need regulatory approval, and TWTC will support those filings. TWTC may seek FERC regulatory approval of its structure, if appropriate.
Q: How will the TWTC work with regional planning requirements (Order 1000) and integrated resource planning?
A: TWTC focuses on project investment and will need to make its projects compatible with Order 1000 requirements. LSE investment will also comply with state integrated resource planning requirements.
Q: What regulatory issues do you anticipate for multistate projects?
A: One of TWTC’s primary roles will be to coordinate and integrate regulatory filings and advocacy between states. As a unitary voice for transmission in the West, TWTC will be able to illustrate the economic, operational and policy benefits to any given project and provide support on the thorny issue of approval of cost allocation.
Q: Does TWTC/TransCo have projects in mind?
A: TWTC will collaborate with participants to curate a set of projects. In addition, the TWTC project formation process also encourages participants to bring projects individually, if they wish. TWTC has had high-level discussions about collaborating with WPP’s WestTEC regional planning efforts to identify projects.
Q: How does TWTC anticipate structuring the individual operating companies?
A: The individual operating companies arising under TWTC will be structured to the unique needs of the participants in that given operating company. While common structures and forms may emerge across the anticipated operating companies, TWTC will not predetermine issues like cost allocation or governance.
Q: Will TWTC employ strict cost allocation rules?
A: TWTC will not employ a top-down structured set of cost allocation mandates, such as those found in Order 1000, though similar concepts will apply. Cost allocation determinations will begin with conversations between transmission owners, transmission developers, and load serving entities. Transmission cost allocation is a zero-sum game that will benefit from repeated projects being formed, with cooperation emerging from repeated interactions between entities with long-run relationships. All TWTC cost allocation agreements will be voluntary. TWTC members may ultimately agree on arbitration methods to arrive at ultimate cost allocation in each Project Company. Nevertheless, at the outset, TWTC will not prescribe cost allocation formulas.
Q: Who is advising TWTC on developing a more productive approach to cost allocation?
A: TWTC has engaged Maury Galbraith, who is currently the Executive Director of the Colorado Transmission Authority and has many decades of experience navigating cost allocation issues. Maury was present at the March 2024 meeting in Phoenix and will be continuing to advise TWTC and project companies.
Q: Will there be a cap on participants for the individual project companies?
A: Members will set the policies; however, a founding principle is that TWTC does not choose winners and losers. It is anticipated that if desired by members, the TWTC may develop processes that blend auctions and mediation (e.g., “mediated bidding”) to resolve issues in project participation.