Legalectric

By standing up for offshore transmission for wind, Delaware’s Gov. Jack Markell stands up to Midwest coal!

The Mid-Atlantic states have been standing up and opposing transmission from the Midwest.  They’ve gone on record in a number of venues, and in their opposition are citing Midwest transmission promoters’ disregard for eastern renewable efforts, that xmsn may well not be an economical way to get power to the east, and that THEY KNOW THAT MIDWEST TRANSMISSION PLANS INHERENTLY ARE ABOUT COAL. The plan they’re referring to is a massive transmission buildout known as JCSP, and it also applies to the big PJM buildout that includes the PA-NJ Susquehanna-Roseland transmission line that was the subject of a hearing last month.

Here’s JCSP (Joint Coordinated System Plan) note their site now talks about wind — but look where the transmission starts, DUH! The coal fields of the Dakotas:

Gotta give them, Delaware, Maryland and Virginia, a lot of credit for recognizing and stating what Midwest states have been unwilling to admit.

That said, here’s what Mid-Atlantic states are doing — they’re banding together to propose offshore transmission.  If it’s underwater offshore transmission, that’s an idea that’s hard not to like.  But I’ll bet it throws PJM for a loop, what with all their “backbone” transmission schemes, a la Project Mountaineer, that are in the works:

The FERC birth of Project Mountaineer:

Exhibit STL D-6a (PSEG Discovery Response)

Exhibit STL D-6B (PSEG Discovery Response)

And you can see that those lines in play now, PJM’s “backbone” transmission projects like Susquehanna-Roseland (NE part of Project Mountaineer Line 1) and MAPP (NE part of Project Mountaineer Line 4) are part of the plan… the big transmission plan that does not work for the east coast.

Here’s the Memorandum of Understanding between Delaware, Maryland and Virginia:

DE, MD & VA Wind Infrastructure MOU

And recently, Gov. Jack Markell addressed these issues before American Wind Energy Association’s offshore windfest — but given the PJM big-transmission-projects-from-hell are referred to as “backbone” projects, I wish they’d find another term:

Delaware energy: ‘Backbone’ power line pushed for wind farms

By AARON NATHANS
The News Journal

BOSTON — If the Eastern Seaboard is to one day be dotted with thousands of wind turbines, they may as well work in harmony.

That’s the message 10 eastern governors are sending to the federal government as they advocate for a major underwater power line parallel to the East Coast.

U.S. offshore wind farm projects, all still on the drawing board, are being planned to include cables from the turbines to a substation on land to bring the power to the existing transmission grid.

The “backbone” power line the governors envision would connect the wind farms to each other, making it easier to spread wind power from areas where the wind is blowing robustly at that moment to states where electricity demand exceeds supply.

They see the backbone as preferable to a national investment in a transmission line that brings wind power from the Midwest to the East.

Gov. Jack Markell broached the subject this week in his address to the American Wind Energy Association’s offshore wind workshop, the industry event of the year on this side of the Atlantic. Markell signed onto letters the governors sent to members of Congress this summer, and the Federal Energy Regulatory Commission last month.

Governors of Vermont, New Hampshire, New York, Virginia, Maryland, New Jersey, Massachusetts, Rhode Island and Maine also signed the letters.

In an interview, Markell’s natural resources secretary, Collin O’Mara, said he wants to find out if there’s a way to spread out the costs of such a project. Building a backbone would help states satisfy their renewable electricity purchase requirements, and relieve the “spaghetti” structure of the current power grid, he said.

“Let’s have the conversation,” O’Mara said. “It’s extremely worthy of further study.”

Transmission is vitally important to getting offshore wind energy to population centers, said Denise Bode, the wind association’s president. And Gov. Donald Carcieri, R-R.I., called it “the elephant in the room.”

The power grid is “organized like a patchwork to meet local needs” rather than as a planned national system — almost an assemblage of local roads compared with an interstate, Carcieri said. The developers and government officials in attendance were very much aware of the role transmission will play in whether the offshore wind industry lives up to its potential.

The discussion comes as various offshore wind projects are maturing from concept to permitting, construction and design. At the moment, NRG-Bluewater Wind holds the only contract for offshore wind power, with Delmarva Power.

It’s starting the permitting process, getting ready to build weather towers off Delaware and New Jersey next summer, and preparing to bid for the right to develop an offshore wind project in New York City.

Jim Gordon, president of the Cape Wind venture that hopes to build in Nantucket Sound, told the convention he has all of the permits he needs from the state and federal government, but is working to overcome a tribal challenge that the waters in Nantucket Sound are protected.

The developer is working with the local utility — National Grid — to develop a contract to purchase power from the wind farm.

National Grid is also negotiating with Deepwater Wind for a contract to provide power to Rhode Island’s Block Island from a small, five-to-eight turbine facility in near-to-shore state waters. The company is also planning a larger wind farm in federal waters off the Rhode Island coast, which will take longer to build.

Deepwater, Bluewater and Fishermen’s Energy are planning wind farms off the New Jersey coast and the state government has provided incentives.

Deepwater CEO Bill Moore said, in principle, the backbone transmission line is “a terrific idea. It makes a lot of sense.”

But he said it’s a “daunting task” to complete an infrastructure project that crosses state boundaries, impacts different developers, and brings together different regional power grids.

“It obviously won’t happen in the absence of federal leadership,” he said.

Fishermen’s Energy President Daniel Cohen said it’s a good idea, but “it’s another moving part.”

“What comes first? Do you build the project or the backbone? People need to make decisions soon,” Cohen said, noting that the answer affects financing arrangements.

Gordon van Welie, president of ISO New England, the regional power grid manager, said there has been some investment in transmission upgrades, but a national plan is needed before new elements are selected.

“The rhinoceros in the room is the transmission cost allocation” — who benefits from a transmission line, and who pays for it, he said.

He noted that the New England governors adopted their own long-term vision of renewable energy, which included $6 billion in lines to transmit power from inland and offshore turbines to population centers.

The benefits of building lines transmitting wind power from the Midwest are less certain, he said.

“It will be difficult to get progress in this area until there are clear national goals,” he said.

Steven Bruckner, conservation chairman of the Virginia chapter of the Sierra Club, looked kindly upon the backbone idea. He said he didn’t have environmental concerns, although he wondered whether such a project would be economical.

“You’re talking hundreds, thousands of wind turbines off the coast, eventually displacing those coal burning power plants,” he said. “It’s the scale. It’s the beginning.”

Note that “cost allocation” is raised.  Since the 7th Circuit decision tossing out FERC approval of PJM’s transmission cost allocation dream/nightmare, all transmission projects 500kV and over based on that cost allocation scheme are in limbo.

Illinois Commerce Commission v. FERC – August 6, 2009

So as noted, who pays, and submarine transmission is EXPENSIVE, is THE big issue now.  It’s the big issue for land transmission, it’s the big issue for offshore transmission, and, given the uncertainty since the 7th Circuit decision, maybe some of the sturm and drang could be circumvented if it’s designed at 345kV or below, and uses the “benefactor pays” theory.  We shall see…

“Wind on the Wires” and AWEA are whining and crying in the press about unfair treatment to wind generators.   They do a deal with the devil to promote transmission and now are getting screwed — sorry, I won’t be hosting a pity party here!

AWEA PRESS RELEASE HERE.

AWEA and WOW’s FERC filing to protest MISO cost allocation proposal

To look at the full FERC docket, GO HERE TO FERC SEARCH PAGE, and search for docket ER09-1431.

“Wind on the Wires” is a subset of the Izaak Walton League – Midwest, not a separate organization.  Some background here:

Years ago, the Midwest Izaak Walton League, together with MCEA, ME3 (Fresh Energy) and North American Water Office, did a deal with Xcel, and a massive “Wind on the Wires” grant was announced a couple of days later.  The deal was to support a massive transmission buildout, specifically, to work to change state and federal law; to support transmission projects; to usher them through the legislature, state and federal administrative venues, to support at industry transmission planning groups; to support changes in rate recovery; to support changes in transmission need and siting criteria; and to allow transmission-only companies, all the things that Xcel wanted to roll out CapX 2020, JCSP, and whatever else is in their dreams.

Really… it’s all here:

Settlement Agreement – ME3, Waltons, MCEA, NAWO

$8.1 Million Wind on Wires grant from McKnight/Energy Foundation

Waltons 2007 Form 990, shows Beth Soholt, WOW Director & Matt Schuerger, Energy Systems Consulting, p. 19

This 2003 Settlement Agreement was in the Minnesota PUC’s TRANSLink docket, where Xcel wanted a transmission only company, not yet allowed in Minnesota.  For the docket, go to www.puc.state.mn.us and then click on “eDockets” and search for docket 02-2152.  F”or the resulting legislation, some of it, see 2005 Transmission Omnibus Bill from Hell.

So they jump through all those hoops and where are they?  What happens?

Back to Cost Allocation of Transmission.

Let’s see… there was one cost allocation scheme,  50-50 split between owner utilities and generators connecting.  Otter Tail Power objected and so the utilities changed it to a 90-10 split, and now “Wind on the Wires” and AWEA are screaming, whining and crying saying it has to go back.  This has to do with how the utilities characterize the purpose of the line, be it for “Reliability” or “Generation Interconnection” and how costs are apportioned are different.  In the CapX proceeding, the “Brookings line” was not declared, and the Fargo and LaCrosse lines were deemed “Reliability” but that’s absurd…

CapX’s Grover – Direct Testimony

CapX Application- Appendix D-5 – Cost Allocation

For “Baseline Reliability” projects here’s the cost allocation scheme:

For “Generation Interconnection” here’s the cost allocation scheme:

Ummmmm…  a little more background here now that we’re talking about interconnection… does anyone remember the name of that coal plant that Otter Tail Power just got permitted to build?  Oh, yeah, right, it’s BIG STONE II.   And what was the name of that big honkin’ coal plant that “suddenly decided” to produce electricity rather than syngas?  South Heart, yeah, that’s it.   See “South Heart coal gasification — Coal on the Wires.” Both plants strategically placed to use CapX 2020 transmission.  So what is the impact of this shift to Otter Tail Power and their Big Stone II project?

Here’s the Big Stone electrical link to CapX — it’s all connected:

Here’s new connector ND transmission announced April 3 — it’s all connected:

And of course, the big picture of CapX 2020 – click on it for a bigger picture to really appreciate those lines starting in the Dakotas:

Here’s an article from last week about their objections:

Wind industry protesting plan to pay for new lines

Cost-sharing proposal decried as threat to renewable energy goals

By Leslie Brooks Suzukamo
lsuzukamo@pioneerpress.com
Updated: 08/14/2009 12:01:26 PM CDT

The emerging wind industry in Minnesota and the Upper Midwest could be shut down by the cost of connecting to high-voltage transmission lines if a proposal by the organization that controls the Midwest’s power grid goes through, wind advocates say.

The grid operator and some utilities say the wind industry is overstating the effect, but the long-simmering dispute over who should pay for new transmission lines boiled over Thursday.

If the matter can’t be resolved, the wind industry insists, Minnesota’s renewable energy goals would be at risk.

The Midwest Independent Transmission System Operator, which covers 13 states and Manitoba, Canada, last month proposed changing the way costs are shared for new transmission lines. It wants to put 90 percent of the cost on energy generators, including the wind farms springing up across the Dakotas and southwestern Minnesota.

Previously, the cost has been split 50-50 between energy generators and transmission-line owners, typically utilities.

However, Otter Tail Power of Fergus Falls told the grid operator, known as MISO, recently that unless the sharing agreement is changed, Otter Tail would pull out of the system.

Wind farms in the Dakotas representing a total of 10,000 megawatts of electricity — a significant chunk of the power waiting to be added to the grid — wanted to connect to Otter Tail’s grid to reach Minnesota and the rest of the transmission system operator’s territory, said JoAnn Thompson,

Otter Tail’s manager of federal regulatory compliance and policy. Otter Tail consumers were going to have to pay half the cost of the new transmission, even though they would use almost none of that power, as it would be transmitted onward, she said.

“We support developing renewable energy but not at a substantially disproportionate impact to consumers,” she said.

The new cost-sharing proposal, which was submitted to the Federal Energy Regulatory Commission for approval, would increase the cost of developing wind energy projects so much they would no longer be economical, wind energy advocates said Thursday.

The American Wind Energy Association in Washington, D.C., and Wind on the Wires, a St. Paul-based industry association, filed a protest Thursday with the energy regulatory commission opposing the proposal.

“If (the transmission system operator) loads up the cost (of new transmission) on the generators, we won’t get new transmission built,” said Beth Soholt, executive director of Wind on the Wires.

“So unless we get the cost of new transmission spread out more evenly in the MISO footprint, wind-energy development is going to come to a screeching halt.”

The changes also could throttle efforts to export wind energy from the Upper Midwest to the rest of the country, the American Wind Energy Association added.

The Upper Midwest has been dubbed “the Saudi Arabia of wind” because of the region’s gusty conditions, but unless big and expensive transmission lines are built, there is no way to get that power from the scores of wind-energy projects proposed for the isolated prairie to energy-hungry metro areas like the Twin Cities, Chicago and points east, American Wind Energy Association analyst Michael Groggin said.

But Xcel Energy, which must generate 30 percent of its electricity from renewable energy by 2025, says the impact will be temporary. Xcel on Thursday asked the Federal Energy Regulatory Commission to require MISO to propose an alternative plan by April 1 next year, to be effective July 1, said Kent Larson, Xcel’s vice president of transmission.

MISO said it requested the shift in cost sharing to keep Otter Tail from bolting from the organization, which is voluntary. If Otter Tail pulled out, the wind farms in the Dakotas would have to pay higher rates to use Otter Tail’s lines as a bridge to the big cities anyway, said Clair Moeller, MISO vice president of transmission asset management.

A proposal by American Wind Energy Association and Wind on the Wires to spread the cost of new transmission to all MISO members would have caused utilities in the eastern part of the territory with no renewable-energy requirements to leave, Moeller added.

If members left MISO, the system of using the organization as a market to buy the cheapest electricity on the system would fall apart and rates would go up, Moeller said.

“So we were on the horns of a dilemma,” he said.

So if “Wind on the Wires” and AWEA object to “generator pays” transmission, where it’s the generator causing the need, then they’re now in essence advocating for a different scheme for Big Stone II and South Heart coal plants too.  Oh, good idea…

Here’s another one that turned up — WOW and AWEA sent out a raft of press releasees…

Wind Industry Fights Midwest Transmission Proposal to Stay Alive

by Stacy Feldman – Aug 17th, 2009

The burgeoning wind industry in America’s Upper Midwest could be at risk of shutting down if a new transmission policy by a local grid operator goes through, according to a pair of wind advocacy groups.

Even worse — the plan could put the nation’s renewable energy goals in jeopardy.

The American Wind Energy Association (AWEA) and Wind on the Wires (WOW) have filed a protest with the Federal Energy Regulatory Commission (FERC) to stop a proposal by the Midwest Independent Transmission System Operator (MISO) — one that would dramatically change the way costs are distributed for new transmission lines.

Specifically, the plan would force energy generators to bear a 90 percent share of new transmission costs in the region, wind farm developers included.

Currently, generators and utilities split the price paid, 50-50.

For the wind industry, that would be seen as a shame. Current plans for regional wind are grand. Developers want to build a wave of utility-scale wind farms, and get the ones that have already sprouted plugged in. In fact, a decent chunk of the power waiting to be added to the grid in the Midwest is wind.

But if FERC approves the proposal by MISO, which covers 13 states, those megawatts may have to keep on waiting. Here’s why:

“The proposed change would nearly double the cost for a wind plant to connect to the power system in the Upper Midwest, potentially forcing many wind plant developers to pull the plug on tens of billions of dollars of investment they have planned for the region,” said AWEA in a statement.

Simply put, wind would no longer be economical under the MISO scheme, and some projects that are waiting in the wings would be killed.

Without the planned turbines, states in the Upper Midwest, which include Minnesota, Wisconsin, Illinois, Indiana, and the Dakotas, may struggle to meet their renewable energy goals and mandates, the AWEA says. America as a whole would be hard-pressed to reach the White House ambition of doubling the nation’s supply of renewable energy in the next three years sans the Upper Midwest, known as the “Saudi Arabia of wind.”

As AWEA and WOW see it, the MISO policy is “unworkable” for the wind sector because of this fact. It assigns nearly all of the costs of upgrading the grid to the next wind plant waiting in line to connect to it. It’s akin to

“requiring the next car entering a congested highway to pay the full cost of adding a new lane,” said WOW Director Beth Soholt.

The Upper Midwest isn’t alone on this issue. Transmission has become the major tripwire to America’s green-powered future.

One of the biggest hang-ups is over a cross-country transmission superhighway that would zap electricity from America’s midsection to the urban areas that need it. The plan carries a massive, multi-billion dollar price tag. Those in favor say it would move the nation toward a clean renewable energy future. Those against see it as a total waste of cash, a covert attempt to serve some of the dirtiest coal plants, giving them access to new markets through transmission.

And then there’s the big issue of cost: Who would pay for it?

The MISO proposal is a local version of that long-simmering cost dispute.

What’s clear is that loading up the costs on generators could price many wind farm plans out of existence. There’s also the issue of costs to electricity consumers. The price hike to generators that a shift to MISO’s cost sharing would bring would be passed onto certain Midwestern consumers. They’ll end up paying more for the transmission of wind, and may not even benefit, if it gets sent to neighboring states. That could stymie public support for new wind energy.

AWEA and WOW have an alternative vision — to more broadly distribute transmission-line investments “in a way that matches the broadly distributed benefits of building a stronger grid, such as improved reliability and reduced power prices.”

But MISO’s rationale for its policy suggests something else entirely — that wind shouldn’t be the only game in town in the Upper Midwest.

“We continue to focus on addressing the challenges of integrating large quantities of wind through ongoing work with our stakeholders and state officials. This work includes developing long-term transmission plans, cost allocation strategies and other market solutions that preserve and enhance the ability of all resources, including wind, to integrate and operate efficiently.”

FERC has not indicated whether it favors MISO’s proposal or would recommend changes.

In a ruling in June on the Southwest Power Pool (SPP), the agency sided with the wind industry, deciding to more broadly and fairly spread the cost of building new transmission to all users of the SPP electric grid.

SPP serves Kansas, and parts of New Mexico, Texas, Oklahoma, Arkansas, and Louisiana, Missouri and Nebraska. In response to the decision, AWEA was hopeful for future transmission rulings:

“We hope other regions and the federal government will follow their lead and institute similar reforms so that we can begin to put the world-class wind resources that are currently stranded in rural parts of this country to use.”