Governors Proactively Encouraging Increased Transmission Capacity Throughout the Upper Midwest
By: DANIEL A. YARANO & ZACHARY D. OLSON
October 2008
The demand for power in the Upper Midwest is growing faster than current transmission capabilities can accommodate. New transmission lines are necessary to support growing customer demand for electric power. As consumers and utilities look to the future of power generation, new transmission lines will ensure that there is access to energy sources in the Upper Midwest, many of which are located in remote geographical areas. The Upper Midwest has great potential to become a leading energy exporter, but the current transmission system does not have the capacity to move power to the load sources.
On September 18, 2008, the governors of five Midwest states formed the Upper Midwest Transmission Development Initiative (Initiative) to much fanfare around the region. Governors Tim Pawlenty of Minnesota, Chet Culver of Iowa, John Hoeven of North Dakota, Michael Rounds of South Dakota, and Jim Doyle of Wisconsin created the Initiative to emphasize the growing need not only for transmission lines but also for the utilization of the region’s many renewable energy resources. Many individuals within the energy industry acknowledged the excitement and the expansive possibilities the Initiative creates for the Upper Midwest. By creating the Initiative, the five governors took serious steps toward making the Upper Midwest a major contributor to the nation’s renewable energy solution.
The Upper Midwest Transmission Development Initiative
The Upper Midwest Transmission Development Initiative is a cooperative effort between the states of Minnesota, Iowa, North Dakota, South Dakota, and Wisconsin to make increased transmission capacity within the Upper Midwest a reality. The goal of the Initiative is to identify ways that the states can cooperate to build transmission lines, grow renewable power infrastructure, and allocate expansion costs fairly within the region. The states in the Initiative will not only work together, but also with state regulatory agencies, transmission companies, utilities, independent generation owners, and other key stakeholders throughout the region. The states will coordinate with the Midwest Independent Transmission System Operator (Midwest ISO), which has recently reformed its interconnection queuing process and is an integral partner for the expansion of transmission lines.
The aggressive buildout of transmission lines will greatly benefit those in the renewable energy fields, especially in the field of wind energy. Given the United States’ current dependence on foreign oil, renewable energy resources have become an important topic to many people. Leaders such as Presidential candidates John McCain and Barack Obama, as well as T. Boone Pickens and others, have brought mainstream media attention to the importance of developing sustainable renewable energy sources. In Minnesota and other states around the country, the legislature has mandated the utilization of more renewable energy. By the year 2025, 25 percent of the state of Minnesota’s electricity will come from renewable sources.
The Upper Midwest region has an abundant supply of wind, but the current transmission system capacity simply cannot support the potential wind energy that can be produced in the area. By expanding transmission throughout the region, the five states engaged in the Initiative will become major contributors to the sustainability of and reliance upon renewable energy throughout America. The expansion is positive in terms of environmental gain and economic gain. By producing more energy through renewable sources and having the transmission capacity capable of moving the energy around the region, the Upper Midwest will gain economically from exporting wind and other renewable energy to the rest of the country. The first steps toward this economic gain, however, are the steps the Initiative is discussing and encouraging.
The Initiative will make recommendations on a number of topics. It will examine the current transmission system and identify possibilities of expansion by using engineering models for transmission and generation plans to effectively and efficiently move wind energy located around the region. Based on those studies, the Initiative will decide which regional projects to pursue. Once these projects are identified on a regional basis, the individual states would be responsible for implementing, building, and maintaining the specific projects located in that state. Along with identifying appropriate regional projects, the Initiative plans to compare different transmission cost-sharing options around the region. Creating a reasonable cost-sharing allocation method is important for the success of the Initiative; allowing the region to realize the many benefits of a cooperative effort. Finally, the Initiative will identify approaches that will lower costs to the home consumer.
Timeline for the Initiative
The Initiative was created September 18, 2008, with a 12-month horizon to adopt the recommendations formulated by the Initiative. The kickoff meeting, scheduled for October 2008 in Minnesota, will be the beginning of the next 10 months of discussions on how to expand the current transmission and how to properly and fairly allocate the costs of the massive transmission system expansion. During those months, the Initiative will engage state energy commissioners, public utility companies, key energy industry stakeholders, and Midwest ISO to create proper recommendations for the expansion project. The Initiative will work with and incorporate Midwest ISO’s Regional Generation Outlet Study, which is expected to be completed in 2009. The recommendations created through the Initiative over the next 10 months are expected to be adopted in August of 2009.
Takeaway
The governors of five Midwest states recently formed the Upper Midwest Transmission Development Initiative to increase the region’s transmission capacity. The goal of the Initiative is to identify ways that the states can cooperate to build transmission lines, grow renewable power infrastructure, and allocate expansion costs fairly within the region.