September 18, 2010
Idaho, Montana, Nevada, Wyoming

TransCanada drops $3 billion transmission project

By Karl Puckett, Tribune Staff Writer, Great Falls Tribune, www.greatfallstribune.com 17 September 2010

The $3 billion Chinook transmission project, proposed to ship thousands of megawatts of wind energy from wind-rich Montana to big energy markets, is no longer being pursued by Calgary-based TransCanada because of a lack of interest from wind farm developers.

In January 2009, TransCanada officials told Gov. Brian Schweitzer that plans for the project were moving forward, and that they anticipated announcing a partnership with a large wind-power generator.

“We don’t have sufficient commercial interest to proceed with the project at this time,” John Dunn, TransCanada’s project manager, said Thursday.

The high-voltage Chinook power line, which company officials hoped would be completed by 2011, would have carried up to 3,000 megawatts of electricity, originating in southcentral Montana and terminating in the Eldorado Valley south of Las Vegas. That’s almost eight times as much as the state’s current wind-farm output of about 385 megawatts.

Dunn said the company has turned its focus exclusively to a similar-sized transmission line the company is developing, called Zephyr. That line will run from southeastern Wyoming and end south of Las Vegas.

“We are not actively seeking bids and wind developers in Montana are not actively seeking us out and asking us to move forward at this time,” Dunn said. “We’re focusing on the Zephyr project because that’s the project we have commercial support (for).”

With the Chinook project out of the picture, a direct competitor has been removed for Butte-based NorthWestern Energy, which is developing the Mountain States Transmission Intertie, or MSTI, said Jim Bellessa, an investment analyst for D.A. Davidson & Co. in Great Falls.

The $1 billion MSTI project, which also would ship wind power, is proposed from southwestern Montana to southeastern Idaho.

“If TransCanada is hitting some issues with customer reception, it’s conceivable maybe MSTI is too,” Bellessa said. “Nonetheless, it removes a competitive threat to MSTI.”

Bellessa said marketplace uncertainties are causing developers of big transmission lines to pause. He noted that a federal renewable energy standard has not been passed and Proposition 23 in California, if OK’d in November, would reduce the renewable energy requirement in that state until the unemployment rate drops.

“We’re still moving forward on our project, and we still have quite a bit of interest in interconnecting to our system,” NorthWestern spokeswoman Claudia Rapkoch said.

NorthWestern has extended its deadline for accepting bids on reserving space on MSTI to this fall. Rapkoch said the deadline extension resulted, in part, from delays in the draft environmental impact statement for the project.

Both the Chinook and Zephyr projects were planned to transport significant amounts of wind-generated electricity from Montana and Wyoming to markets in California, Nevada and Arizona.

TransCanada has successfully solicited bids from wind developers to ship 3,000 megawatts on the Zephyr line, Dunn said. He noted that open bidding seasons are a way to test the market demand for the transportation prior to building the line.

“We didn’t see that same group of wind developers – large, well-capitalized wind developers – in Montana,” Dunn said.