ALL SO. DAKOTA NEEDS IS WIRE FOR ITS WIND

Transmission for wind power eyed in South Dakota
Scott Waltman, May 9, 2009 (Aberdeen American News via Chicago Tribune)

SUMMARY
South Dakota is rapidly developing its enormous wind energy potential. The state’s installed capacity is now 285 megawatts, up from 187 megawatts earlier this year. With a relatively small population, the state needs a wider ranging transmission system to sell the power its wind generates.

The ITC Holdings Green Power Express represents just such a transmission system.

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The Green Power Express would have a 12,000 megawatt carrying capacity, run 3,000 miles, cost $10-to-12 billion, transverse multiple Midwestern states (including North and South Dakota, Minnesota, Iowa, Wisconsin, Illinois and Indiana) in service to multiple major cities in the region including Chicago and go online in 2020. They would be high-voltage, high capacity 765-kilovolt (kV) lines.

Most likely siting of the Green Power express would be along interstate or railroad rights of way, though the interstate highways would bring the lines near buildings and towns. The 765-kV lines would therefore probably follow railroad rights of way to South Dakota’s several 345-kV substations.

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ITC Holding could encounter regulatory impediments in Wisconsin and Minnesota, putting more emphasis on the interconnection between South Dakota and Iowa through the Sioux City region.

The Green Power Express would also service North Dakota (wind energy capacity of 700+ megawatts) and Minnesota (wind energy capacity of 1,750+ megawatts).

Whether the Green Power Express gets built may hinge on how new transmission costs are allocated. The present, somewhat complicated plan allots 80% of the cost via a tariff to people who use the line. Many believe the way to get the lines built is to spread more than the designated 20% of the cost among people away from the line because the line benefits more than those who use it directly.

New transmission will ease loads on utility companies throughout the Midwest and allow for the development of New Energy resources that will bring new opportunities and revenues to the region. ITC Holding and the S.D. PUC are working with the federal regulators to establish a more fair cost allocation.

Opponents have filed letters objecting to the Green Power Express on the grounds that it is unneeded locally, will facilitate the use of more coal-generated electricity and will raise electric rates.

The Federal Energy Regulatory Commission approved a 12.38% return on investment for the Green Power Express, higher than the more common 8-to-10% rate of return. The stated justification is that the Green Power Express has a higher than average risk, justifying more reward. It nevertheless looks very suspicious when a big utility is granted federal authority to profit above the normal level on a project many believe is not necessary.

CapX2020 is an alternative to the Green Power Express proposed by 11 utility companies in the region. It would build 4 high-voltage lines, primarily in Minnesota but also in Brookings County, South Dakota, a wind-rich area.

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COMMENTARY
The South Dakota PUC recently approved a new 306-megawatt wind installation, 3 times bigger than the state’s current biggest. It will be in Brookings and Deuel counties. It will bring the state's installed capacity to ~600 megawatts. Without new transmission, the state cannot utilize further capacity.

1 765-kV line has the capacity of 6 345-kV lines. At present, 3 345-kV lines handle South Dakota's power demand. The ITC Holding transmission system will carry the state’s abundant wind power to more than 3.5 million homes in other states.

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The good news: Because electricity follows the path of least resistance, the enormous carrying capacity of the Green Power Express can be expected to ease the load on other transmission lines

The bad news: Because transmission wires cannot distinguish between electrons generated by wind and electrons generated by coal, the Green Power Express could facilitate the consumption of coal rather than wind.

Example of how new transmission serves more than the local area: At present, South Dakota’s Tatanka wind facility sends its generation from the Long Lake/Leola area to a substation at Ellendale, N.D. The Green Power Express would not serve the Long Lake/Leola area but carry excess, unconsumed wind-generated electricity from Tatanka and many other South Dakota wind installations.

Without a project like the CapX2020 or the Green Power Express, wind energy industry growth will be impeded by the absence of access to electricity distribution and markets.

Local resistance to projects like CapX2020 and the Green Power Express makes more urgent a national New Energy transmission superhighway. Such a system could find easier regulatory approval, facilitated by Congressional legislation mandating resolution of siting disputes by federal authorities.

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QUOTES
- Cited from Dusty Johnson, South Dakota Public Utilities Commission: “ITC is already in contact with people developing wind farms that have not been built, so those projects are would-be sources for the Green Power Express. But it's too early to know many of the details…”
- Cited from Steve Wegman, South Dakota Wind Energy Association: “Some logical deductions can be made about the Green Power Express route…The best places to run the lines would be along interstate or railroad rights of way. Interstates, though, would be problematic because there are many buildings along them and they often cut through towns. So…railroad rights of way make more sense…”

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- Cited from Wegman: “…it would be best to have more than one entry point [for the transmission system into South Dakota] so there's a way to provide power to customers if one set of lines were damaged or down…”
- Cited from Johnson: “…playing the political game is the project's next big step -- even more important than worrying about regulatory or economic details. The upside is that the Obama administration wants to increase wind power production, so there should be support for the transmission system. The downside is that Congress moves very slowly…”
- Wegman, on a national New Enerrgy transmission superhighway: "If you're going to be in the energy business…you're going to get hooked into the transcontinental power line."