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FERC OK's incentives for power superhighway

By ROSALIE WESTENSKOW, UPI Energy Correspondent   |   April 14, 2009 at 6:13 PM   |   Comments

Federal regulators pushed a major high-voltage transmission line one step closer to construction on Monday, praising its stated goal of increasing clean power.

The Federal Energy Regulatory Commission approved a package of investment incentives that will enable Michigan-based ITC Holdings Corp., a power-transmission company, to advance its Green Power Express project. The proposed 3,000-mile power highway aims to deliver wind energy from the upper Midwest to consumers in Chicago, Minneapolis and southeastern Wisconsin.

Among the incentives approved for the project -- whose estimated price tag will run between $10 billion and $12 billion -- are a return on equity of 12.38 percent and the inclusion of all construction work in the rate base.

"This will help (ITC Holdings) get financing for the project by providing stability for future investors," FERC spokeswoman Barbara Connors told United Press International.

The line's green-power potential played a role in FERC's decision, as it has in a number of similar, recent requests for investment incentives.

"We look at renewables and whether the line brings renewable power to areas that need the energy but don't have renewables nearby," Connors said.

The antiquated condition of the nation's electricity grid presents a major barrier to widespread deployment of green energy, experts say, because renewable-energy sources are often located far from population centers, requiring major transmission lines to get the electricity to those who need it.

Wind and solar are also intermittent and can't produce energy at rates equal to demand at any given time, like power generated from fossil fuels. To use it properly, the grid has to be more adept at handling and distributing the energy in smart ways -- and that means upgrades nationwide.

As a result, Congress has been pushing FERC to jump-start major transmission-line projects that will update the grid and bring more clean power into the nation's electricity supply. Projects like ITC Holdings' will do just that, FERC Chairman Jon Wellinghoff said.

"Meeting our nation's energy goals will require developing extra-high-voltage transmission infrastructure that is needed to bring clean, renewable energy from areas where it is produced most efficiently to areas where most of our nation's power is consumed," Wellinghoff said in a statement. "The commission is examining the adequacy of transmission-planning processes and is committed to working with transmission providers and state and regional entities to provide consumers with greater access to renewable resources."

Some groups in the seven states the Green Power Express line will pass through aren't happy about the project, though, including the Institute for Local Self-Reliance, a Minneapolis-based think tank that opposes the project.

"Building this line will require thousands of homes, farms and businesses to be seized and often destroyed," said David Morris, the institute's vice president. "From the bottom up, having a 300-foot-high by 100-foot-wide tower on your property would be the last resort. From the top down, that seems like a perfectly reasonable option."

Morris isn't convinced the line will advance renewable-energy production either.

"They're calling it the 'Green Power Express,' but it's not clear at all that that's what it will be," Morris told UPI. "It looks like the majority of the electricity on this line will be brown, not green."

Morris pointed to a lack of hard figures from ITC Holdings on how much of the power will come from wind energy or what percentage of the facilities linked up to the line will generate clean electricity.

While there's no way to provide hard figures, ITC Holdings representatives countered, the route chosen for the line is targeted specifically at wind developments.

"We're obligated by the government to make our line open to anyone who wants to use it," said Cheryl Eberwein, ITC Holdings spokeswoman. "But we met on a confidential basis with a number of large wind developers and figured out how we could best accommodate existing and planned wind farms."

FERC's ruling puts the project one step closer to construction, but there's still a long way to go before the line is up and running, which ITC Holdings is hoping to have happen by 2020.

First, though, the company has to seek regional approval through the Midwest Independent Transmission System Operator. Then the company will have to work with each of the seven states to hammer out siting specifics and convince all other stakeholders the line is a good idea.

"We will be working with a tremendous number of groups and organizations," Eberwein told UPI. "It's going to be a long process."

--

(rwestenskow@upi.com)

© 2009 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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