ICF Consulting Completes Detailed Analysis of Proposed GridFlorida RTO

ICF Consulting recently published its “Cost-Benefit Study of the Proposed GridFlorida RTO.” The comprehensive report was prepared under the guidance of the Florida Public Service Commission and sponsored by Florida Power & Light (FP&L), Progress Energy Florida (PEF), and Tampa Electric Company (TECO). The study examined the benefits and costs to peninsular Florida consumers of a GridFlorida Regional Transmission Organization (RTO) over a 13-year period under two centralized modes of operation—a Day-1 RTO and a Day-2 RTO.

The project included significant involvement from the stakeholders in the Florida region, including transmission and generation owners, industry groups, U.S. Federal Energy Regulatory Commission (FERC) representatives, and state regulators. “ICF Consulting dedicated significant time and resources to incorporate stakeholder input and provide robust analyses that addressed the comments and concerns of all stakeholders,” says Bob Croes of FP&L.

The overall outcome of net benefits or costs to peninsular Florida consumers is dependent upon both quantitative and qualitative aspects of the RTO benefits. The quantitative benefits of a “Greenfield” Day-1 RTO with new systems and physical facilities are not nearly as large as the quantitative costs. Thus, a Day-1 RTO, as designed and studied, is probably not cost-effective even when qualitative benefits, such as the potential for improved investment efficiency and standardization of utility practices, are considered. In the case of a Day-2 RTO, although the quantified benefits were almost $1 billion, the cost of a Greenfield Day-2 RTO was approximately 28 percent higher. Thus, if the qualitative Day-2 RTO benefits are approximately US$285 million, the proposed GridFlorida RTO could break even.

“One milestone this study achieves in the electric power industry is a fundamentals-based approach to estimating and benchmarking RTO costs,” says Kojo Ofori-Atta, an ICF Consulting vice president and transmission expert. “This study itemized all major RTO startup and operational costs for both Day-1 and Day-2 RTO modes of operation.”

Download the full report at http://www.icfconsulting.com/gridflorida. Learn more about ICF Consulting's transmission consulting services at http://www.icfconsulting.com/Markets/Energy/electric-transmission.asp. Make inquiries through energy@icfconsulting.com or 1.703.934.3637.

ICF Consulting (http://www.icfconsulting.com) is a leading management, technology, and policy consulting firm. Drawing upon extensive industry knowledge, distinguished professionals, and innovative analytics, the firm develops solutions to complex defense, homeland security, social program, energy, environment, and transportation issues. ICF Consulting’s approach to these issues is strengthened by its expertise in information technology, organizational improvement, research and evaluation, program management, and communications. Since 1969, ICF Consulting has been serving major corporations, government at all levels, and multinational institutions. More than 1,500 employees serve these clients in the Americas, Asia, and Europe.