AMP Transmission, LLC

3 min read

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August 2019

In August 2018, AMP Transmission, LLC (AMPT) was created to achieve economies of scale for the municipal members of AMP subject to the North American Electric Reliability Corporation (NERC) Transmission Owner requirements. It also provides transmission services that benefit AMP members, including the purchase and ownership of transmission facilities and technical and other services to assist members in their transmission planning.

AMPT is a transmission-only, non-profit, Ohio limited liability company of which AMP is currently the only member. Pamala Sullivan was named President of AMPT; Marcy Steckman was named CFO; Lisa McAlister was named General Counsel and Ed Tatum was named Vice President.

AMPT was formed with the same purpose and spirit as AMP – to master the destiny of municipal electric distribution utilities through the ownership and operation of transmission facilities, where such a goal has historically been retained exclusively by incumbent transmission owners in the past.

In the 1950s, before AMP or the Ohio Municipal Electric Association (OMEA) existed, public power in Ohio was at its height with more than 120 community-owned utilities across the state.

At the time, many communities were generating all of their power supply and handling all of their electric needs locally. However, in the decades following World War II, construction of larger, more cost effective coal plants began to crop up across the country, reducing electric prices considerably through economies of scale and scope.

For many municipal utilities, the combination of lower prices and growing populations resulted in the need for power supply options in addition to their local generation. Investor owned utilities (IOUs) often refused to interconnect with public power communities unless they shut down their locally-owned generation and agreed to buy power from them exclusively, often at a higher rate than the IOU charged their own customers. Because of these tactics, many municipal utilities sold their electric distribution systems to the closest incumbent IOU. By 1970, approximately 40 of Ohio’s 120 plus municipal utilities had gone out of business.

Most of the remaining Ohio municipal utilities banded together to form OMEA and AMP. AMP and OMEA were successful in taking advantage of opportunities to benefit municipal systems. For example, in 1974 when American Electric Power (AEP) sought to consolidate several smaller utility systems, AMP intervened in the case before the Public Utilities Commission of Ohio (PUCO) and succeeded in securing an interconnection agreement with AEP.

In a similar scenario in 1978, the northern Ohio IOUs that now make up FirstEnergy were working toward building nuclear generation units on the coast of Lake Erie, which required licensing from the Atomic Energy Commission (AEC) and an anti-trust review. Seizing the opportunity, AMP and its members successfully convinced the Department of Justice (DOJ) and the AEC that the IOUs’ refusal to interconnect, transmit or sell power to municipal utilities amounted to anti-trust activities. The AEC conditioned the grant of nuclear licenses on the requirement that they end these activities.

These accomplishments set up AMP and its members for a period of sustained growth, more balanced relationships with incumbent transmission owners and advantageous power contracts, leading to power prices as much as 40 percent lower than the IOU offerings.

Moving into the 1980s, AMP and its members shifted focus from access to transmission to improvement of transmission reliability. Incumbent transmission owners, who often provided superior service to their customers without comparability for AMP members, thwarted AMP’s efforts.

In 1980, AMP member Cuyahoga Falls was working with Ohio Edison to get a higher capacity interconnection or a second interconnection point, but Ohio Edison refused the requests.

Then, one hot summer day, the Ohio Edison line that connected the Cuyahoga Falls substation to the grid, overheated and shorted out, blacking out the entire city.

Although the blackout was a severe and negative event, it drove AMP and its members to undertake the first joint venture in the form of backup diesel generation, and provided the additional leverage needed to negotiate interconnection agreements and add delivery points.

In 2016, some AMP members were impacted by the change of the NERC definition of Bulk Electric System (BES), resulting in additional burdensome requirements. The incumbent transmission owners were unwilling to provide the transmission operator services required of NERC transmission owners, and many AMP members were unable to do so cost effectively.

The affected members, including Napoleon, requested that AMP help find a solution that did not include the sale of members’ transmission assets to the incumbent transmission owners. After extensive exploration and education, the AMP Board approved the formation of AMPT to address the NERC compliance responsibilities for members through joint action.

AMPT serves as an opportunity to help level the playing field with IOUs through joint action, as AMP has done throughout its nearly 50-year history. AMPT is capable of providing AMP members with engineering support to identify opportunities to improve system reliability and, as a transmission owner, AMPT can build, own and operate transmission facilities, whereas municipal electric systems were obligated to rely on incumbent transmission owners in the past.

If you have questions about AMPT or would like to discuss how it could help your community, I encourage you to reach out to Pam Sullivan at [email protected], Lisa McAlister at [email protected] or Ed Tatum at [email protected].

Want to learn more? Read more about AMP Transmission.