The operator of the Midwest wholesale power market on Thursday endorsed construction of 17 high-voltage power line projects across the region that would cost $5.2 billion in the coming years.
The projects are driven by a push to improve the flow eastward of renewable energy from the windy Plains states as well as to improve the ability of low-cost power to flow across the Midwest, said Clair Moeller, vice president of the Midwest Independent Transmission System Operator.
The price tag for the projects would be divided equally across the Midwest. So Wisconsin ratepayers would be paying to build projects in other states for the first time.
Until now, Wisconsin utility customers have been paying only for in-state projects built by Pewaukee-based American Transmission Co. and Xcel Energy in Eau Claire.
Wisconsin uses about 15% of the electricity in the region, putting its share of the $5.2 billion price tag at almost $800 million.
The list of projects includes three in Wisconsin planned by American Transmission, which means customers in other states will end up paying for the majority of the costs of those power lines. Those include a 6-mile line between Kenosha County and northern Illinois, and two longer lines that would link the Madison area with La Crosse and Dubuque, Iowa.
The funding plan has been challenged in federal court in Washington, D.C., an appeal that Wisconsin manufacturers will join this month, said Todd Stuart, executive director of the Wisconsin Industrial Energy Group.
“We have already invested billions in upgrading our infrastructure over the last decade, and now we will pay more for ‘green’ power lines all over the Midwest,” he said. “Wisconsin’s customers, particularly large manufacturers, will get hit hard.”
American Transmission and wind power supporters, including Minnesota-based Wind on the Wires, which supports transmission investment, praised the decision.
Anne Spaltholz of American Transmission said the utility’s studies show the lines are needed and would provide a good return for Wisconsin customers by enabling them to access less expensive out-of-state power sources.
“The upper Midwest has some of the highest wind power potential in the entire world, but it cannot be utilized without significantly expanding the transmission system,” said Joe DeVito, chairman of Wind on Wires.
Critics question need
The projects selected Thursday still face hurdles before they can be built. State utility commissions including Wisconsin’s must find they are needed and deal with thorny siting issues.
Citizen groups in Wisconsin have raised questions about the need for new power lines given excess power supplies created by the recession.
The Citizens’ Utility Board in Madison questions whether so many projects are needed at this time, said Charlie Higley, executive director.
Moeller said much of the region’s excess power is likely to be retired because of enacted and pending Environmental Protection Agency rules aimed at improving air quality.
This week, Dairyland Power Cooperative of La Crosse said it plans to shut three old coal units at its Alma power plant at the end of this year. We Energies of Milwaukee is considering the shutdown of its Presque Isle coal plant in Michigan’s Upper Peninsula and the conversion of the Valley Power Plant in Milwaukee to burn natural gas instead of coal.
Studies by the Midwest ISO have suggested the region will see savings over the long term from investments in the power lines by improving the ability of the operator of the region’s power grid to move cheap power to places where electricity prices are high.
For the average customer in the Midwest, the organization projects the plan would cost $11 a year but deliver $23 in benefits by late this decade.
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