October 24, 2011
U.S., Wisconsin

Feds want utility project costs to be shared

By Thomas Content of the Journal Sentinel, www.jsonline.com 23 October 2011

A vote last week by federal energy regulators clears a path for utility customers throughout the Midwest to pick up the $5 billion cost for 17 major power line projects across the region.

That means Wisconsin ratepayers won’t be paying as much for three new high-voltage power lines that American Transmission Co. has on the drawing board. But they will be asked to pay for 14 other big power lines proposed from North Dakota to Indiana.

Wisconsin accounts for about 15% of the electricity used among the 12 states that make up the Midwest Independent Transmission System Operator, a regional electricity transmission organization.

As a result, Wisconsin electricity customers will be on the hook for nearly $800 million for projects that would be built between 2014 and 2020 across the region. Roughly $260 million would be paid for by customers of We Energies.

The move is supported by wind power advocates and supporters of plans to boost the region’s power grid to improve the flow of power from west to east.

The cost-sharing plan is sought for projects that provide regional benefits – in reliability, access to more economical power or public-policy goals such as green power.

It is being challenged by groups representing big manufacturers as well as utilities in Michigan that don’t see the plan benefiting their state.

An analysis by the Midwest ISO found that the benefits to the region – and to Wisconsin – over the next 20 to 40 years would make the investment in upgraded transmission lines cost-effective.

Improving the flow of power across the region will result in a variety of benefits including less need for power plant construction and lower rates for purchased power because of fewer surcharges linked to congestion on the interstate power grid, the Midwest ISO found.

The Wisconsin Industrial Energy Group is raising concerns, saying the plan could result in too many power lines being built. It could also force Wisconsin customers to pay for wind projects that aren’t needed to satisfy the state’s renewable energy standard, the group says.

On Thursday, the Federal Energy Regulatory Commission approved the cost-sharing plan for major regional power lines, and rejected concerns raised by manufacturers and a consortium of Michigan power companies and businesses. The ruling allows the Midwest ISO to move ahead, although court challenges are possible.

The federal action was praised by Nina Plaushin, vice president of ITC Holdings, a transmission utility based in Michigan.

“Each state within MISO . . . is expected to receive benefits of up to three times their cost,” she said.

The Wisconsin Public Service Commission will have to decide this year whether to challenge the federal ruling, said Kristin Ruesch, commission spokeswoman.

The Public Service Commission had objected to the cost formula, saying wind power generators should be required to pay more for projects that would benefit the flow of wind energy to the east from Plains states that are aggressively pursuing wind power development, Ruesch said.
3 ATC projects

Pewaukee-based American Transmission Co. has three projects among the 17 that are being considered by the Midwest ISO as “multi-value projects.” This includes $714 million that would be spent on two power lines that would start in Dane County – with one headed to La Crosse and the other headed toward Dubuque, Iowa.

The other ATC project is the roughly $30 million 345,000-volt line that would relieve congestion on the power grid linking southeast Wisconsin and northeast Illinois. That project, the Pleasant Prairie-Zion Energy Center line, is planned to be built by 2014.

ATC is pleased with the cost-sharing plan approved last week and expects a decision by year-end from the Midwest ISO on whether its three projects will qualify for regional cost-sharing, spokeswoman Anne Spaltholz said.

George Nygaard, a member of the steering committee of the Citizens Energy Task Force, said he feels as if the federal government is lining up behind utilities, increasing the challenge for groups such as his that are questioning the need for power line projects.

The federal government recently announced it would speed up the federal permitting process for a line that Nygaard’s group is opposing – one linking La Crosse with Rochester, Minn. That line is proposed by Xcel Energy and a consortium of utilities including Dairyland Power Cooperative and WPPI Energy.

“This is all about parceling and transferring bulk wholesale energy. You’re asking local people to carry the freight” for power lines that would essentially be used to send wind power from the Plains to eastern states with renewable energy targets, he said.