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Partners in Power

Complex problems call for collective measures.

Fortnightly Magazine - February 2012

Among all of the investment priorities in the U.S. electric power industry, one stands out as having the greatest momentum: transmission. This is interesting because transmission is perhaps the most difficult type of power infrastructure to develop, and has been for decades. Editor Michael T. Burr talks with executives at Xcel Energy and Great River Energy to learn how the CAPX2020 consortium has managed to succeed where others failed.

An interesting phenomenon is developing as 2012 gets underway. Namely, among all of the investment priorities in the U.S. electric power industry, one stands out as having the greatest momentum: transmission. This is interesting because transmission is perhaps the most difficult type of power infrastructure to develop, and has been for decades.

This issue of Public Utilities Fortnightly looks at transmission from a few different perspectives. In his “ Commission Watch ” column, Publisher Bruce Radford considers recent proceedings at the Federal Energy Regulatory Commission (FERC) regarding how new emissions regulations from the Environmental Protection Agency (EPA) might affect grid reliability. In “ Green Gridworks ” and “ Not-So-Green Superhighway ,” analysts look at models for building transmission to interconnect renewable energy resources, and the unintended consequences—and costs—of building those lines. And in “ Transmission’s True Value ,” authors from the Brattle Group argue that decision makers shouldn’t underestimate the less-obvious benefits of building new infrastructure.

These articles focus on the topic in four different ways, but they all cover a common theme facing transmission development: complexity.

Transmission lines face uniquely complex challenges in siting, permitting, and financing, especially when they stretch across multiple utility territories and state boundaries. Although rational people might differ about the details of those complexities, resolving them seems to require an inclusive, holistic approach.

This fact became clear to me recently, when I had the opportunity to tour a segment of the CapX2020 transmission initiative being built in Minnesota. CapX2020 is a collaborative group of utilities, including investor-owned utilities, distribution cooperatives, generation and transmission (G&T) cooperatives, and municipals. The group is developing an ambitious set of projects that extend from western Wisconsin across Minnesota, into the Dakotas, and potentially into Manitoba. Various segments within the initiative are designed to serve various purposes, from supporting reliability to bringing new generation resources to the Midwest ISO wholesale market—so-called “multi-value projects” (MVP) in the MISO planning process. The first group of projects in the CapX2020 plan is expected to cost nearly $2 billion, with wires extending across more than 700 miles.

One might guess that the diverse group of utilities involved with CapX2020 would encounter irreconcilable differences in fundamental areas—from routing to cost allocation. But as I learned from interviews with two executives involved with CapX2020, development has proceeded quickly and smoothly, with surprisingly few setbacks.

The key—according to Teresa Mogensen, Xcel Energy’s vice president of transmission, and Will Kaul, v.p. of transmission at Great River Energy—is that the project’s participants took a truly collaborative approach, right from the beginning.

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