A public power agency representing dozens of small Missouri cities has signed on as the initial customer for a planned wind farm in Kansas that would supply energy through the proposed Grain Belt Express Clean Line transmission project.
The 20-year power purchase agreement is for 100 to 300 megawatts of wind energy to be supplied by Infinity Wind Power’s Iron Star wind project in southwest Kansas to cities that belong to the Missouri Joint Municipal Electric Utility Commission (MJMEUC) beginning in 2021.
The PPA follows a transmission service agreement between MJMEUC and Houston-based Clean Line Energy Partners LLC, the Grain Belt Express developer. Both contracts will be looming large in the monthslong case pending before the Missouri Public Service Commission.
The PPA, in particular, will be a key piece of evidence as Clean Line and its supporters seek to demonstrate the need for the Grain Belt Express project in Missouri, the only state yet to give regulatory approval for the 780-mile high-voltage transmission line.
The Missouri PSC voted 3-2 to deny a certificate for the Grain Belt Express project in July 2015 (Energywire, July 2, 2015). The commission order said Clean Line didn’t demonstrate a need for the project – one of five criteria used to reach its decision – because Grain Belt Express wasn’t needed for reliability and wasn’t necessarily the cheapest way for Missouri utilities to access wind energy.
“Since areas of MISO have some of the best wind energy resources in the United States, it is more likely that the large amount of available MISO wind can satisfy the needs of Missouri utilities for wind energy compared to the smaller amount of Kansas wind that GBE proposes to inject into MISO at the Missouri converter station,” the PSC order said.
Mark Lawlor, director of development for the Grain Belt Express project, said the PPA between MJMEUC and Infinity Wind and the related transmission agreement prove otherwise.
“The most effective rebuttal of that comes from the rebuttal testimony of MJMEUC,” Lawlor said.
In a filing last week, MJMEUC President Duncan Kincheloe said the agreements would allow a group of 35 Missouri cities that get all of their energy and capacity through MJMEUC to replace an expiring contract for 100 MW of coal-fired energy with cleaner wind power from Kansas.
Other larger Missouri cities have also expressed interest in purchasing wind energy via the Grain Belt Express line, said Kincheloe, a former Missouri utility regulator.
“The current opportunity with Grain Belt provides a rare opportunity to provide renewable energy to our members at an extremely competitive rate,” he said.
Landowners challenging the Grain Belt Express application said the PSC should give little if any weight to the transmission agreement because MJMEUC may elect not to take capacity over the new line even if it’s built.
Opponents also on Friday followed up by asking the commission to strike last week’s testimony detailing the PPA or grant an additional four months to respond to it because the agreement was signed just a day before opponents’ initial testimony was due.
“The timing is very convenient to an effort to hide the ball” from information requests, said a filing from Show Me Concerned Landowners, one of two landowner groups. “The delay, well within MJMEUC’s and Grain Belts’ control, circumvented the procedural schedule designed to provide adequate time to review all facts and circumstances.”
Matt Langley, Infinity Wind’s vice president of finance and origination, said the Grain Belt Express project represents a “missing link” in the nation’s electric grid by connecting some of the country’s best wind resources in southwestern Kansas with more populous areas in the East.
Infinity Wind and MJMEUC said the PPA agreement is contingent on the Grain Belt Express line being completed because the HVDC line is the only way to transmit energy to the Missouri cities.
Cost advantages seen
Langley said in an interview that one of the cost advantages of the Grain Belt Express line is the efficiency of direct-current technology, which helps avoid line losses associated with AC transmission.
“More of the megawatt-hours you’re generating is getting where it needs to go,” he said.
With all-in costs of about $20 per megawatt-hour for Kansas wind energy, MJMEUC said the agreement with Clean Line would save $10 million annually just in transmission charges compared to what it would cost to export 200 MW from the Southwest Power Pool.
The agreement is also seen as cheaper than other wind energy alternatives, including contracts with wind farms in MISO, according to MJMEUC executive John Grotzinger’s testimony.
Savings from the Grain Belt project against renewable energy from MISO would be $9 million to $24 million a year based on 135-MW contact, he said. Annual savings compared to other wind-based resources in SPP would be $8 million.
While customers like MJMEUC can also find cheap wind power elsewhere in MISO, the price of moving wind energy to Missouri from states like Iowa via a high-voltage alternating current line can’t compare with the cost of moving power on the direct current Grain Belt Express line, Lawlor said.
“The difference is congestion,” he said.
The PPA with MJMEUC represents the first contract to sell output from the Iron Star wind farm near Dodge City, Kan., which is ultimately planned for up to 4,000 MW.
Santa Barbara, Calif.-based Infinity Wind now has 1,200 MW of wind projects in operation throughout southwest Kansas, New Mexico, Nebraska and Oklahoma.
Langley said he expects Iron Star to be a “major component” of the wind energy transmitted on the Grain Belt Express project as additional offtake agreements are signed with other utilities.
The PSC concluded a series of public hearings on the Grain Belt Express project last month. The commission has scheduled a weeklong evidentiary hearing to begin in late March with a decision coming later this spring.
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