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Wind energy producers face wall in moving power east  

Credit:  By Dan Piller, The Des Moines Register, www.desmoinesregister.com 31 October 2010 ~~

Iowa energy policymakers know that building the nation’s second-largest wind generating capacity was relatively easy compared with the next step of figuring how to transport surplus electricity to Eastern cities.

One thing appears certain: If plans don’t gel relatively soon on ways to move wind energy across state lines, the slowdown in building wind farms in Iowa will turn into a complete halt.

“Absolutely, Iowa will see wind energy development stopped if transmission issues aren’t solved,” said Roya Stanley, director of the Iowa Power Fund. She’s Gov. Chet Culver’s representative on multistate task forces trying to untangle the wires, literally, to build an interstate electric system.

Robert Loyd, manager of the Clipper Windpower plant in Cedar Rapids, said: “Everybody’s waiting for something to happen. If we don’t get the transmission issue solved fairly soon, we’ll hit a wall on new wind power development.”

Loyd laid off workers last year. So did TPI Composites in Newton, a company heralded as part of that city’s attempts to come back from the Maytag closing five years ago.

Wind already faces a stiff challenge from natural gas, which burns cleaner than coal and now is believed to be in much larger supply in the nation than previously believed five years ago thanks to huge discoveries.

Gas has a built-in advantage – a national network of pipelines. Wind-generated electricity doesn’t have a multistate transport system, and such a network will be needed if Iowa and the Upper Midwest expect to succeed.

Regional controversies about wind have stayed mainly below public earshot.

In an era when even the production of hogs and corn has been politicized in Iowa and elsewhere, wind has had near-universal support.

Such support now threatens to be fragmented amid regional competition.

“The easy stuff has been done already on wind,” said lawyer John Moore of the Environmental Law and Policy Center of Washington, D.C. “Now comes more difficult details.”

The first difficult detail will be the cost of big transmission lines.

In mid-October, MidAmerican Energy of Des Moines and American Electric Power of Columbus, Ohio, its partner in a proposed 11-state transmission line from the Dakotas to Ohio, said their “Smartransmission” line would cost at least $20 billion, to be finished in 2020 or later.

The companies’ proposal would move up to 58,000 megawatts of electricity. In a typical day Iowa uses between 5,000 and 8,000 megawatts of electricity.

A rival plan by ITC Holdings, which owns the Alliant Energy transmission system in Iowa, wants to build a similar transmission line into Illinois. Its cost is estimated in the $12 billion to $15 billion range and would move up to 12,000 megawatts of electricity.

The idea is to get the wind-generated electricity from the sparsely populated Dakotas, Iowa, Minnesota and Wisconsin across the Mississippi River to big consumers in Chicago and points east.

Under the state-regulated grid system developed in the last century, utilities built their own generating and transmission systems and recovered all costs from customers.

That cost-recovery model is less applicable when a generator’s customers are four or five states removed and whose leaders want the same job creation and wind development that Iowa has achieved in the last decade.

“The problem is that other states see Iowa’s success in developing wind and want to get in the business and create their own jobs,” said Harold Prior, president of the Iowa Wind Energy Association.

Prior’s reference is to what has been the big news in wind this year: the aggressiveness of East Coast interests to develop their own wind resources, potentially to the detriment of Midwest wind.

This month, Google and a Wall Street investment company announced plans for an offshore wind farm in the Atlantic Ocean that would extend perhaps as far as from New York to Virginia.

That follows the approval of the long-delayed Cape Wind project off the coast of Massachusetts.

That has created friction from Eastern interests who have fought proposals from Iowa and the Midwest for transmission line proposals.

“Resistance from some Eastern states, Massachusetts in particular, has become stronger and stronger,” said Stanley, part of a working group of 39 state energy and utility regulators.

Easterners have made it clear that Iowa and the Midwest can build all the transmission it wants, so long as it pays all the costs. Midwesterners beg to differ.

“We’re working hard on cost allocation so that Iowans won’t have to pay all the costs for the transmission systems,” said Doug Collins, president of ITC Holdings.

A newly organized “Fair Transmission Coalition” of Eastern utilities, utility regulators and public officials fight what they call the “nationalization” of the electric transmission system.

Such “nationalization” is what Iowans want. U.S. Sen. Tom Harkin, D-Ia., told a wind energy conference in Des Moines this month that the new transmission system “can be likened to the interstate highway system.”

The nationalized grid interests took a setback last summer when the climate change bill failed to pass Congress. One provision would give the Federal Energy Regulatory Commission authority over state interests in deciding sites for transmission lines.

The battle has shifted to the Midwest Independent System Operator, the consortium of utilities, generators and transmission operators from the Dakotas to Ohio that essentially acts as a guide for the interstate grid.

The entity could create a framework for a transmission proposal. It is the first entity to wrestle with the cost allocation issue. In July, the entity came out with its first proposal, which recommended that transmission costs be shared by all that use the electricity.

MidAmerican, which has a strong interest in distributing transmission cost over the entire load rather than focused on the generator, is guarded in its response to the early proposal, which was drawn up by a committee after 19 months of study and will now go to the energy commission for review.

“We are very concerned about some of these new rules and how they would affect customers,” Crist said. “But we do think that an overall transmission plan needed in this country.”

The only unity so far has come from the governors of Iowa, Minnesota, North Dakota, South Dakota and Wisconsin, who have agreed on principles – although not a final plan – for cost allocation among themselves for a 15,000-megawatt line that would originate in the five states.

Source:  By Dan Piller, The Des Moines Register, www.desmoinesregister.com 31 October 2010

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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