Town Of Ashford, Fond du Lac County, Wisconsin : Notices & News

July 18, 2010 Wind power might require a costly grid expansion

By Thomas Content of the Journal Sentinel

Energy writer Thomas Content keeps you current as you adapt to changes
in the world of energy, climate change and efforts to build a greener
economy.

* Stimulus funding aim: Bring down cost of EV batteries (19)
* Pressured by state, feds, clock is ticking for older coal plants
(17)
* Chu: Astronautics will research 'novel approaches to air
conditioning' (3)

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The Midwest could be crisscrossed with a new network of high voltage
power lines to move wind-generated power from the windiest spots in
the Dakotas, Iowa and Minnesota.

A group of utilities in 11 states, including Pewaukee-based American
Transmission Co., is studying three alternatives, each of which would
cost at least $23 billion over the next 20 years.

What's unclear: How much it will end up costing for Wisconsin's share
of the projects. A more detailed analysis has been launched to help
determine what the payoff could be in savings from increasing the flow
of low-cost power around the region, said Flora Flygt, ATC's director
of strategic projects.

The studies are in response to public policy moves that could result
in a dramatic increase in wind energy development. More than 30 states
have moved to spur utilities to add more renewable energy. Federal
energy legislation pending in Congress could set a national renewable
mandate as well.

Pewaukee-based ATC, along with Dairyland Power Cooperative and Xcel
Energy, are also studying a high-voltage 345,000-volt power line that
would link La Crosse with Madison, with studies slated to be
completed by the end of the year.

There's no question that building essentially a brand-new extra-high
voltage system for power will cost a lot. A study by ATC, Xcel Energy
and other Midwest utilities, known as the Smart Transmission study,
pegs the total cost at $23 billion to $25 billion, by 2029.

The 20-year planning document identifies several projects that would
come into the state - some of them by 2019 - including 345,000-volt
lines or 765,000-volt lines that would cross southern Wisconsin. It
also identifies a direct-current power line across Lake Michigan to
create another west-to-east corridor for power.

The utilities' report, the Strategic Midwest Area Renewable
Transmission study, follows the unveiling last year of a plan by ITC
Holdings of Novi, Mich., that proposed a high-voltage network in the
Midwest at a cost of $10 billion to $12 billion. Earlier this year,
planners at the Midwest wholesale power market produced a report
detailing a variety of options that cost upward of $16 billion.

Key questions remain about the plans to add a renewable power
"overlay," most notably, who would pay.

Some proposals would tab developers of wind farms for a share of the
cost - proposals that wind developers say could lead to decreased wind
farm development across the region.

"If transmission costs become too expensive, it will make Midwest
renewable energy less competitive vs. other areas of the country, and
send a signal to the market to develop projects in more competitive
areas," said Joe De Vito, chairman of RES-Americas and board chairman
for Wind on the Wires, in a recent statement.

But customer groups are concerned that Wisconsin customers could end
up paying for lines for which the state doesn't see much gain.

"How much do Wisconsin ratepayers really need to subsidize the rest of
the Midwest, or customers on the East Coast that want to have a
renewable portfolio standard?" said Todd Stuart, executive director of
the Wisconsin Industrial Energy Group, a trade association that
advocates for affordable and reliable energy.

Wisconsin has invested billions in shoring up its power grid to make
up for years of under-investment in transmission lines, and utility
customers across the state have already been paying for those
upgrades, he said.

But it's possible the state could see benefits from added transmission
lines, said Flygt and Eric Callisto, chairman of the state Public
Service Commission.

Developing a system that moves power around the region more
efficiently would provide increased reliability and better access to
lower cost renewable power generated west of Wisconsin, Callisto
said.

But utility regulators will weigh those benefits against the cost to
customers, he said.

"There are a lot of things that help the economics, but the bottom
line is these are still very large investments. They're not going to
be built all at one time, but even a phased-in build-out of a couple
billion dollars over the next decade represents real dollars to real
ratepayers," Callisto said.

That's why it's important for there to be a variety of studies with
different assumptions looking at what potential economic benefits from
power lines may be, he added.

Among the proposals is a high-voltage line along the bottom of Lake
Michigan linking Wisconsin and Michigan.

A line with underwater cables crossing Lake Michigan could also have
economic benefits for Wisconsin and other parts of the region, Flygt
said.