To Build Transmission, Meditate on Cooperation, Cash and Caveats

By Kathleen Davis, Senior Editor

Building a power line and related infrastructure isn’t easy. It sounds simple enough: The consumers spread out and need more power, so the utility broadens its range and builds more lines—basic cause and effect.

In actuality, the power expansion formula is more akin to: cause leads to discussion leads to planning leads to more discussion leads to more planning. And the effect may take months or even years.

But lines and infrastructure do get built. Power does flow, and the effect does happen.

There are many details between cause and effect to consider, however.

Transmission and RTOs

Beyond the mere utility, building power lines on the transmission side of the equation will often involve a regional transmission organization (RTO) such as the Midwest Independent System Operator (MISO). Approved as the first U.S. regional transmission organization in 2001, MISO ensures reliable operation of, and equal access to, high-voltage power lines in 12 U.S. states and the Canadian province of Manitoba. MISO also manages one of the world’s largest energy markets, clearing more than $27 billion in energy transactions in 2010.

MISO still juggles reliability and markets, but, recently, the organization has been working to tout cooperation and planning among all the entities involved with transmission lines. In Sept. 2011, MISO President and CEO John Bear met the Midwestern Governors Association to discuss the benefits of regional transmission planning, including delivering “the lowest-cost energy to ratepayers.”

Noting that the time of localized power line construction is long gone, Bear and MISO are looking at regional planning with concepts such as MISO’s “Multi-Value Projects (MVPs).” (See Figure 1, next page, and sidebar on Page 29.) There are 17 MVPs on the MISO list in the Dakotas, Minnesota, Iowa, Wisconsin, Missouri, Illinois, Indiana and Michigan that require the cooperation of various transmission owners, including: Otter Tail Power, Xcel Energy, Great River Energy, MidAmerican Energy, American Transmission Co., Ameren, ITC Midwest, Duke Energy, Montana-Dakota Utilities and NIPSCO.

During the governors meeting, Bear labeled cooperation between MISO, owners and regulators “critical in enabling the Midwest to move ahead into a new energy future,” he said.

MISO estimates that the MVP method will help the organization deliver 1.8 times to three times more benefits than cost. To the average residential customer, MISO figures the cost at $11 annually and the benefit at $23 annually.

POWERGRID International asked Jennifer Curran, executive director of transmission infrastructure strategies for MISO, to break down those costs and benefits further.

The $11 annual customer cost is for line construction and maintenance costs. The $23 of benefits is a bit akin to the “negawatts” idea—savings through greater efficiency. (It’s a “when things work better, we spend less on them” philosophy.) That greater efficiency vat includes: more efficient generation dispatch, fuel cost reduction and new transmission capital reduction.

“This avoided transmission investment is enabled by combining a regional approach to transmission planning with analysis of local needs, creating a cohesive set of cost-effective solutions that can replace many local projects,” Curran said.

The MVPs are part of MISO’s $6.5 billion Transmission Expansion Plan (MTEP11) which Curran said will shore up the system and help with reliability issues, including a loss of load from thermal line overload. Additionally, MTEP11 helps with stability issues and lessening transmission-related power outages.

And getting to that stable and reliable transmission spot takes help from regional transmission organizations (RTOs) like MISO. Curran noted that RTOs’ independence can help with evaluation and collaboration, with RTOs helping smooth the transition to one final answer for a bevy of transmission problems.

“Due to years of experience evaluating the value of transmission projects for public policy and economic and reliability drivers, MISO can combine multiple needs into a single solution, increasing the flexibility of the transmission system and reducing the risk of stranded investment,” Curran added.

Transmission and Renewables

Building transmission infrastructure takes a lot of planning and cooperation, according to MISO. According to the Wyoming Infrastructure Authority (WIA), it also takes the right incentives and the right partnerships. At the top of the partnership list for the WIA is the Bureau of Land Management (BLM).

In Dec. 2011, the BLM issued a list of priority renewable infrastructure projects and three wind projects in Wyoming made the cut: the Sierra Madre Wind Energy Project, the Sand Hills Wind Farm Project and the White Mountain Wind Energy Project.

Those three projects will bring in 3,410 MW of capacity, and, along with the BLM helping accelerate the projects themselves, it is also helping push the transmission needed to make those wind farms viable, including the 725-mile TransWest Express Transmission Project and an additional 1,100 miles of new 230 kV and 500kV lines to connect substations under the Energy Gateway Projects. (Permitting and citing of seven transmission projects are being accelerated through the new Rapid Response Team for Transmission co-led by the U.S. Department of the Interior, the U.S. Department of Energy, the U.S. Department of Agriculture and the White House Council on Environmental Quality.)

So partnerships can accelerate regulatory issues related to the line construction process, as Loyd Drain, WIA’s executive director noted.

“We are hopeful that this new federal team will enable Wyoming transmission and generation projects to be constructed and placed in service even earlier than planned,” he said about the partnerships with BLM and the Rapid Response Team. Overall, Wyoming has six transmission projects currently in various development stages. Three are well along in the process of obtaining environmental impact statements. Two are utility-based and necessary to meet demand. The sixth is that TranWest Express project. (See Figure 2.)

Drain believes that transmission development “should be driven by the cost to the rate payer and, thus, the economy,” and he feels the Wyoming projects will benefit both California (with the cost of renewables) and Wyoming (with jobs). While new transmission is essential to harnessing wind development in remote areas, Drain noted that the process isn’t easy or simple, whether inside or outside Wyoming.

“Transmission development is costly and takes a significant amount of time,” he said, pointing out that permitting and siting may cost over $50 million and take a minimum of five years for projects that run through multiple states.

“This process requires coordination between a plethora of federal and state entities,” he added.

Transmission and the Law

Navigating that plethora of federal and state entities is one of the stickiest parts of the transmission building wicket. Former FERC Commissioner Marc Spitzer has a few suggestions for those planning transmission projects and attempting to navigate that sticky wicket. (Spitzer is now a partner in the Steptoe & Johnson law firm.)

“For many reasons, electric transmission is far more difficult to site than natural gas infrastructure,” Spitzer told POWERGRID International. He pointed to FERC Order 1000 as “an opportunity for electric transmission stakeholders.”

FERC Order 1000 reforms the Commission’s electric transmission planning and cost allocation requirements. It establishes three requirements for transmission planning, including consideration of needs driven by public policy, coordination on mutual needs and that each public utility transmission provider participate in a regional transmission planning process.

Spitzer noted that Order 1000 builds on Order 888 (about open access transmission tariffs) and Order 890 (transmission planning requirements) and that Order 1000 was created specifically to address issues that building out a large transmission system across state lines may create.

“Order 1000 is not a silver bullet,” Spitzer added. However, he sees the cost-allocation plan requirements of Order 1000 and the required inter-regional planning to be a big help for the future, driving “collaboration, consensus and ultimate success in transmission development.”

As MISO’s Curran noted, “Transmission forms the backbone of the electric grid; so a strong transmission network is essential to a modern, responsive transmission system.”

WIA’s Drain added, “New transmission infrastructure will not only lend to a faster, smarter grid but will provide low cost renewable energy to the marketplace.”

For all the players in the transmission game, that faster, smarter grid development takes careful policy and legal planning. The right planning can create that robust transmission network Curran envisions which “enables the reliable transmission of power, allowing the lights to stay on.” And, in the end, the effect everyone wants from all this investment and construction is for those lights to stay on.


POWERGRID International asked Curran at MISO: What are the top construction projects within the MISO expansion portfolio? Which one must be accomplished?

Curran: All the projects shown in Appendix A of the 2011 MISO Transmission Expansion Plan (MTEP11) are necessary projects which bring multiple benefits to the system. These projects enable the system reliability, increase the value of the MISO market, and satisfy public policy regulations and requirements.

In 2011, the first portfolio of Multi Value Projects (MVPs) were included in Appendix A and approved by the MISO Board of Directors. This transmission represents the culmination of years of MISO planning, creating a regional transmission portfolio that, when integrated into the existing system, provides benefits in excess of its costs under a variety of future policy and economic conditions.

More on MTEP11 and the MVPs at: http://misoenergy.org/

MORE INSIGHT AT HTTP://POWER-GRID.COM

Gather more DA information online by going to the website and typing “transmission” into the search engine. You’ll find:

  • Information on the BPA, PGE transmission collaboration (a 500 kV line),
  • Details about the CPUC purchase agreement approval for the Pattern Energy wind project using the 500 kV Sunrise Powerlink transmission line, and
  • Dissection of a the $2 trillion smart grid market investment to be made by 2030 (including in the area of transmission).

Visit http://power-grid.com for all the details.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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