By Nancy Thornton- Acantha reporter
As a Canadian company jumps the many regulatory hurdles to build the first direct transmission line between Alberta and Montana, the wind parks that would pay MATL to use the line have remained in the background.
The Acantha explored issues surrounding the right-of-way for the 230-kilovolt, 300-megawatt transmission line through eastern Teton County in past articles. Recently, landowners on both sides of the border sought a closer look at the purported benefits associated with the proposed line to be built between Lethbridge, Alta., and Great Falls.
Calgary-based Montana Alberta Tie Ltd’s $85-million transmission line ($100 million Canadian) would generate the addition of 400 wind turbines and $1 billion in investments in southern Alberta, according to the Alberta press.
In a recent interview with the Acantha, MATL Regulatory Vice President Bob Williams said the wind parks that would tap the MATL line would all be built on the American side of the border.
Originally, nearly half the MATL line’s capacity was sold to two wind-power generators for 15-year terms, GE Wind in Canada and Great Plains Wind & Energy, based in Somers.
GE Wind, which has wind parks in southern Alberta has now bowed out of the MATL project. In a recent interview, Williams said GE Wind “chose not to exercise the next level of commitment.” MATL then held a second “open season” on June 30 and three companies stepped in to buy the remaining long-term transmission capacity on the MATL line.
All four shippers intend to develop wind farms in the Cut Bank area, making the power sources at the midpoint of MATL’s line, Williams said.
“When a shipper wants to purchase capacity, they need to indicate direction and they have to obligate the whole line between the end points even though their wind farm is at the mid-point,” he said.
“We can move 300 megawatts from one end to the other, but if all are at the midpoint, we can move a total of 600 mw north and south. This is an unexpected benefit,” Williams said, adding, “We never try to second guess the people and the power of the market to discover applications we did not think of.”
Dennis Murphy, from GE Energy public relations, said he was not familiar with the MATL project and would not comment on it other than to say that GE would have carefully analyzed the project before making a decision to bow out. The company supplies wind turbines around the world and has sold out of its wind turbines through 2007, Murphy said.
Earlier this year, Great Plains Wind & Energy Inc., requested 120 mw from south to north through 2022 on the MATL line. On June 30, Wind Hunter L.C.C., requested six 20-mw allocations north to south through 2031 starting in April 2007.
At the same time, Energy Logics Inc., requested 180 mw through 2031 from south to north starting in April 2008 and Invenergy Wind Montana L.L.C., requested six allocations totaling 180 mw north to south through 2031.
According to the Great Plains Web site, the 120-mw McCormick Ranch Wind Park on 12,000 acres in Glacier and Toole counties would have from 45 to 60 wind turbines connected to the MATL line. Great Plains interim President David Dumon said he has not chosen the turbine manufacturer yet. He said the $200-million project is in the permitting stage, one that does not need a certificate of compliance from the Montana Department of Environmental Quality, a process DEQ requires of MATL.
Dumon said he would lease land from five to eight landowners who would receive royalties based on gross sales.
According to its Web site, Great Plains is also proposing a 200-mw Rim Rock Wind Park in northwest Toole County that would be built in phases starting in mid-2007 through 2008. The Web site states that this project would use MATL, NorthWestern Energy or Western Area Power Administration transmission lines.
According to MATL, Great Plains has been granted its request for the 120-mw long-term transmission service and nothing more.
Dumon said he wants the McCormick Ranch Wind Park to be online by second quarter 2007. He added that the company has several interconnection options, and any problems with the MATL line would not affect the Great Plains project.
Since its inception as a limited partnership, Great Plains reorganized as a close corporation. Its former president and chief executive officer, Bill Alexander, is now working as the chief development officer for Seattle-based Energy Logics, a wind-energy company with 14 projects in various stages of development including seven in southwest Alberta and several in northern Montana, according to its Web site.
The company obtained 180 mw of capacity from MATL on June 30 but has not stated where in northern Montana it proposes to build a wind park. Energy Logics is not yet registered with the Secretary of State to do business in Montana.
Chicago-based Invenergy has already built the largest wind park in the state, a 90-turbine, 135-mw project in the Judith Gap area. According to the Invenergy Web site, the company is developing projects in more than 20 states and in Europe, but it does not say where the northern Montana development would be located.
According to DEQ Major Facility Site Coordinator Tom Ring, Grapevine, Texas-based Wind Hunter L.L.C has proposed a wind development of up to 500 mw in Valley County near Glasgow. The environmental assessment comment period has closed and the federal and state agencies are preparing responses. What the company plans to do in the Cut Bank area is not known at this time.
Wind Hunter, Energy Logics and Invenergy did not return the Acantha’s telephone calls requesting interviews.
Only the four companies that purchase MATL’s service would use the transmission line at costs ranging from $3.48 to $4.67 per kilowatt per month.
Montana law requires that the MATL project be consistent with regional plans for expansion of the appropriate grid of the utility systems serving the state and interconnected utility systems. The project must also serve the interests of utility-system economy and reliability.
Ring said the MATL application is still not yet deemed complete because MATL has to provide an interconnection study of the line’s affect on the state’s electrical grid.
Tetratech, a consulting firm based in Helena, is proceeding with the necessary environmental-impact statement. Ring said the tax benefits would be spelled out in the socio-economic section of the assessment.
Williams said he expects DEQ approval in mid-September. He said Montana is the first state to develop an environmental-impact statement that the Department of Energy would use for its review.
The Federal Energy Regulatory Commission gave MATL conditional approval on July 20 and Williams said he expects the Presidential Permit for the cross-border line to be approved by September.
The company needs approval from the Alberta Energy and Utilities Board and other Canadian federal regulatory authorities. On June 14, MATL submitted revisions to its preferred route as part of its application to the National Energy Board in Canada. Williams said he expects all approvals by October with construction to start in November.
Wind generation is expected to double in Alberta in the next 18 months, according to one report, but the Alberta Electric System Operator, the agency that controls the electrical interconnection in the province, has set a limit of 10 percent wind power penetration into the system for now. Therefore, Montana wind parks that want to sell power to Alberta have an uncertain future.
In addition, several environmental groups in Canada have objected to the MATL line because transmission lines “cause disruption of the rural landscape,” among other things.
MATL is providing the means to transport power, not the power itself, but all power transfers must be coordinated through “control areas” that balance the supply with demand. Alberta is concerned about that balance and so is NorthWestern Energy, the company that controls transmission capacity where the four wind parks would be located.
Wind is free, the fuel source is not imported, it does not use water, has no air emission or solid waste disposal issues and its generation is not affected by increased natural gas prices, but it has two weaknesses. It is uncontrollable and uncertain as an energy source.
That variability affects its integration into the region’s electrical grid. The power in the wind is proportional to the cube of its speed and doubling the wind speed increases the available power by eight times. In addition, calm days mean zero voltage.
Williams said wind variability is a challenge, but the industry is working on it. The wind developers and MATL met with NorthWestern Energy and the Alberta Electric System Operator on Aug. 1 to discuss it.
Williams said MATL is facilitating “wind-firming” options to help the developers’ portfolios. That might include hydro, natural-gas turbines, spilling wind and feathering blades to provide a more constant supply of power. One solution is a set of batteries to store power.
Ted Williams, the director of transmission operations at NorthWestern Energy, confirmed that the company is working with MATL on their proposed transmission line because it would connect the Alberta control area with the NorthWestern control area.
He said NorthWestern is not against wind generation, but an upper limit exists to its integration.
He said MATL and the wind generators are engaged in a new study to determine what is the appropriate wind generation.
“Our concern is the variability across an hour,” the director said. Generators are hooked up to automatic computers that check load every 10 seconds. The company has purchase contracts for regulating reserves from Evista Utilities and Idaho Power to balance the load.
“When we have wind generators on line we have a need for more regulating reserves,” he said. When NorthWestern elected to purchase Invenergy’s Judith Gap wind power, NorthWestern knew the total cost of integrating the wind was more than the contract price. The director said it was appropriate for NorthWestern’s customers to pay for the regulating reserves associated with the Judith Gap energy, but the power coming from the MATL line presents a different set of facts.
He asked whether NorthWestern customers should pay the cost of the additional regulating reserves if the new wind parks around Cut Bank do not sell the power to NorthWestern.
“Our rates are set, but if they generate power in our control area, we have the increased variability to manage,” he said.
The director also warned that two fossil-fuel power plants are contemplated for the Great Falls area and NorthWestern has to treat them on a first-come, first-serve basis. If they come on line, there is no capacity to move [wind] power out of this area. “Somebody is going to have to build more transmission lines,” he said. “Should consumers have to pay for it, if the supply is going to customers that are someplace else?” he asked.
He said he has not received a formal application for any wind generators on the Hi-Line to interconnect.
“We are looking at any and all solutions to the wind “firming” problem, Dumon of Great Plains said. “It is our hope to sell the power to Alberta. We haven’t spoken to NorthWestern.”
NorthWestern is a member of the Western Electricity Coordinating Council that develops standards and requirements for 36 power-transmission entities in the western United States and Canada and parts of northern Mexico. Kwin Peterson, the council’s communication specialist in Salt Lake City said the members have agreed to abide by the standards, or be fined as part of the reliability management system.
He said wind integration is a “hot” topic these days as is the amount of regulating reserves that should be set aside for wind power.
A 93-page Wind Task Force Report done last September for the Clean and Diversified Energy Advisory Committee of the Western Governors Association is available on the Internet. The Alberta Electric Systems Operator also has wind impact studies on its Web site.
Meanwhile, researchers are studying ways to store wind energy, be it with batteries, water pumped into reservoirs or compressed air. Other researchers are developing technology for day-ahead wind forecasting to reduce the uncertainty.
DEQ has set up a Web page for the MATL project. It will announce the start of the public comment period when the environmental assessment is completed.
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