The Need for New Transmission in the Upper Midwest: Minnesota, South Dakota, and North Dakota
By: LAWRENCE BENDER
October 2008
The demand for power in the Upper Midwest is growing faster than the current transmission capabilities can accommodate. In the past two decades, the utilities’ building rate for new transmission lines has slowed. It is projected that an investment of $56 billion will be necessary to build adequate transmission. New transmission lines will be necessary to support growing consumer demand for electric power. While some proponents believe that new lines should be built primarily for wind, it is likely that new transmission lines will be built to support both wind and coal. As consumers and utilities look to the future of power generation, new lines are also necessary to ensure that there is access to energy sources in the Upper Midwest, such as coal and wind, that are often located in remote geographical areas. The Upper Midwest has great potential to become a leading exporter, but the current transmission system does not have the capacity to move the power.
MINNESOTA
The Minnesota Legislature implemented two initiatives to ensure that Minnesota residents continue to have reliable and renewable energy. First, Minnesota requires utilities that own or operate electric transmission facilities in Minnesota to file biennial reports on the status of transmission systems. This report assists the state in identifying the present and reasonably foreseeable transmission inadequacies, so that it can access and propose solutions to the situation before it becomes too problematic.
In addition to the biennial reports, the Minnesota Legislature passed a Renewable Energy Standard that mandates that 25 percent of the state’s electricity must come from the renewable resources by 2025. Xcel Energy has a higher standard of 30 percent by 2020. Supporters of the bill hope that it will boost the economy by spurring growth in “homegrown” electricity, such as wind.
Minnesota utilities are also contributing to the new transmission growth through a program called CapX2020. The CapX Initiative was implemented to study, develop, permit, and construct transmission projects. The proposed lines will run (1) from Bemidji to Grand Rapids; (2) from Fargo to Alexandria to St. Cloud to Monticello; (3) from the Southeast Twin Cities to Rochester to La Crosse; and (4) from Brookings, South Dakota, to the Southeast Twin Cities.
SOUTH DAKOTA
South Dakota has been ranked as fourth in the nation for wind development potential. It established 11 instrument stations to assess the potential for wind-generated electricity exports. This data is available to the public at http://sdwind.com. In order to export the power generated, it will be necessary to develop an infrastructure to support the transmission of the power to the states to the east. A major issue in South Dakota is the increased cost of building lines that will not necessarily provide a direct benefit to the South Dakota consumers who will bear the cost of new transmission lines.
Like Minnesota, South Dakota requires utilities to report the company’s existing and future planned energy conversion and transmission facilities. South Dakota has also passed a renewable and recycled energy objective that 10 percent of all electricity will be obtained from renewable and recycled resources by 2015. The objective is unlike Minnesota’s, however, in that it is voluntary and there is no penalty for a retail provider who fails to meet the objective.
In addition to developing renewable resources, South Dakota utility companies are also considering the use of coal power to meet the state’s needs. In 2007, Basin Electric proposed to construct and operate a 500 to 700 MW base-load coal-fired facility, together with transmission lines, and other transmission interconnections in central or north-central South Dakota. The proposed 40-mile transmission line would run from 3 miles west of Huron, South Dakota, to approximately 10 miles southwest of Woonsocket, South Dakota.
Five utilities (Otter Tail Power Company, Central Minnesota Municipal Power Agency, Heartland Consumers Power District, Missouri River Energy Services, and Montana-Dakota Utilities) have proposed a second coal-based, power plant near Milbank, South Dakota. Big Stone II will produce approximately 500 to 580 MW of power and is expected to become operational in mid-2013. In order to meet the transmission needs of this project, the companies are proposing a transmission project that encompasses 140 miles of transmission, with approximately 50 miles of new construction with six new or upgraded stations. These lines will run through both South Dakota and Minnesota.
NORTH DAKOTA
North Dakota is consistently ranked as the number one state in the potential to generate wind energy, estimated at 1,210 billions of kWhs in wind power, but it ranks only 13th in the nation in installed wind energy capacity, with 345 MW. According to the American Wind Energy Association, North Dakota alone could theoretically produce enough wind power to meet one-fourth of the U.S. electricity demand. Unfortunately, the transmission capacity is not present. One official stated that North Dakota is “a rural state lacking the population and load growth needed to drive energy development.” In addition to wind, coal is another resource with a significant presence in North Dakota. In 2006, coal production totaled 30.4 million short tons. Without adequate transmission, however, neither resource can be adequately exported.
The North Dakota Legislature created the North Dakota transmission authority to assist the state’s coal and wind resource development by facilitating the development of transmission facilities. The authority has broad power to enter into contracts to construct, maintain, and operate transmission facilities; lease, rent, and dispose of transmission facilities; and investigate, plan, prioritize, and propose transmission corridors. The legislature has also adopted an objective that 10 percent of all electricity sold by 2015 be obtained from renewable and recycled energy resources, like South Dakota. This objective is voluntary, however, and there is no penalty for an electricity provider that does not meet the target.
New transmission projects are already proposed. Basin Electric is planning to construct two transmission lines in North Dakota. One line would run 70 miles from Belfield to Rhame, and the other would run 50 miles from Williston to Tioga. The North Dakota PSC held a public hearing on July 29, 2008, to consider the application of the Belfield project. The Williston to Tioga project is projected to start in 2009.
Minnkota Power Cooperative received approval on June 6, 2008, to build a new 60-mile transmission line from Pillsbury, North Dakota, to Fargo, North Dakota. This line will support new electricity that will be generated from proposed wind projects on the eastern side of the state.
Because the need for energy is continually growing, these new transmission projects that cross state borders in the Upper Midwest will become more common in the effort to meet growing consumer demand.