Transmission company

Transmission companies, or transcos, are independent owners of transmission facilities. They are commonly investor-owned, and like IOUs operate to make a profit for their shareholders. In the U.S., they are regulated by FERC as essential facilities. They acquire their transmission lines either by buying them from formerly vertically integrated utilities that have divested of transmission or by building new transmission facilities.

When transcos build new facilities with financing based on transmission contracts with users (as opposed to financing based on inclusion of facilities in a regulated rate base), the facilities are called merchant transmission. In Europe many transcos have evolved to become a combination of transmission owner and system operator called a Transmission System Operator (TSO).