Xcel Energy

Construction of the CapX 2020 transmission project.

Utilities say CapX2020 transmission project prompting wind energy growth

Finished in late September after more than a decade of planning and construction, the 800-mile-long CapX2020 transmission project has prompted more than 3,600 megawatts of clean energy project proposals, according to Xcel Energy.

While not all the proposals are likely to be approved by regulators, the flood of applications represents the tangible impact of CapX2020 in moving electrons from windier parts of the Midwest to dense population centers to the east.

“There’s a high preponderance of generators in the interconnection queues which are wind developers, with some solar, too,” said Teresa Mogensen, senior vice president for transmission at Xcel Energy, the utility which, along with Great River Energy, led the development.

A recently completed 70-mile stretch of CapX in South Dakota has resulted in proposals for nine wind projects and one natural gas plant together totaling more than 2,000 MW. One of those is the largest wind project in South Dakota’s history, Xcel Energy’s 600 MW Crown Ridge.

Developers have submitted plans for 10 wind projects totaling 1,900 MW on another segment from Brookings, South Dakota to Hampton, Minnesota. More projects are expected to come from North Dakota, too.

The high level of interest does not surprise Wind on The Wires executive director Beth Soholt, an early supporter of CapX.

“It’s a big deal,” she said. “It’s created a road to market for wind, allowed benefits to accrue to communities where wind can be developed.”

Fresh Energy, which publishes Midwest Energy News, is a member of Wind on the Wires and was involved in advocating for the project.

The line allows greater flexibility to bring large volumes of wind energy onto the grid when it is available, a key to incorporating more renewable energy into the marketplace, she added.

If the 3,600 MW of wind projects currently proposed get built, royalty payments to landowners will top $15 million annually, added Xcel Energy’s Tim Carlsgaard.

CapX up close

The more than $2 billion project stands as one of the largest investments in energy infrastructure in Minnesota history, with 5,000 transmission structures on the six sections of the project.

What started out as a project to improve the grid’s reliability and improve the Upper Midwest’s economic stability has created a clean energy superhighway, Mogensen said.

It was one of the first “multi-value projects,” or MVPs, to receive approval from the Midcontinent Independent System Operator, or MISO. That designation allowed some of the costs of several CapX lines to be spread among MISO’s footprint, which extends throughout the Midwest, Manitoba, and parts of the South. MVPs in other states have similarly been credited for facilitating new wind development.

“By adding these CapX lines we’ve multiplied the network capacity of what used to be there both because we have more lines and higher capacity,” Mogensen said. “It’s like putting in a highway where before you just had local roads. You can carry a lot more traffic a lot farther and a lot faster on that freeway structure … we can move a lot more power from west to east because of that.”

As outlined in a University of Minnesota report sponsored by CapX and written by researchers at the Humphrey School of Public Affairs, the transmission project was jumpstarted by federal and state legislation.

In 1999 the Federal Energy Regulatory Commission issued an order calling for states to create regional transmission plans.

Second, new renewable energy projects began to come online, especially wind, to meet renewable portfolio standards of Minnesota and other Midwest states.

Third, there was a sense among utility executives that the transmission grid, which had not been improved since the 1970s, was due for an expansion.

Will Kaul, a retired Great River Energy executive, spearheaded an early effort to create a multi-utility approach to CapX2020, short for “Capacity Expansion Needed By 2020.” Eleven utilities in four states participated in the project.

A utility collaboration of this sort had been rare prior to CapX. Generally, utilities built their own lines and connected at some point on the grid.

“I believe we are the only collaboration of utilities in the nation” to have shared the development of a major transmission project, said JoAnn Thompson, a vice president at Otter Tail Power Company, a Minnesota-based utility that was part of the collaboration.

“It made sense in 2004 to look at how we could build transmission together to benefit our load growth rather than for each of us to do our thing in a piece meal approach…we knew we could accomplish more together than alone.”

Other changes lobbied for by CapX brought a more favorable economic and regulatory environment.

An omnibus energy bill passed by the Minnesota Legislature in 2005 assisted in helping investor-owned utilities such as Xcel more rapidly recover costs of transmission projects.

A new process shortened approval of the lines and to allow CapX to package, in one instance, three or four lines into a single regulatory filing, the report highlighted.

CapX was not without its critics. Carol Overland, an attorney in Red Wing, said the project may be attracting wind generation but it also moves coal-based electricity from the Dakotas onto the grid.

CapX carries some electricity generated by Otter Tail’s Big Stone coal plant in South Dakota, as well as Coal Creek, a massive coal operation owned by Great River Energy in North Dakota, Overland said.

Early projections of the need for electricity in Minnesota had been overstated, Overland contended. Because utilities earn money by building infrastructure, CapX fulfilled that need and offered a hefty return on investment.

Land acquisition also was a challenge for the project, though it was made relatively less contentious because of Minnesota’s unique “Buy the Farm” law.

Passed three decades ago, the legislation requires utilities to buy land from property owners impacted by high voltage lines. The law makes transmission companies not only to buy land requested for easements but purchase the entire properties of landowners impacted by projects.

Of the 2,100 landowners effected by CapX only 105 asked for and received buyouts, said Carlsgaard. While CapX disputed many of the claims made by landowners, it paid for the properties and resold them. In one of those cases, a judge ruled in favor of a popular organic dairy that argued the presence of the line would harm the company’s image.

Overland ended up representing landowners on “umbrella issues” brought against CapX and she found in most cases the results were fair.

Perhaps part of the reason many landowners came away satisfied is that the state legislature amended eminent domain law to increase payments to landowners, the U of M report said.

The fact new generation proposed near CapX largely comes from wind developers has won over some skeptics. The Institute for Local Self-Reliance’s John Farrell concedes the transmission project will place more renewable energy on to the grid due to wind power’s popularity.

“Wind power is now the lowest cost power and that’s a good thing,” he said.

Still, Farrell believes eventually communities may opt to serve their electricity needs through locally produced solar energy and microgrids. “That’s the model for the future grid,” he said.

A full court pitch 

As some parts of the Midwest face growing resistance to power lines, especially in Kansas and Missouri, CapX is perhaps a study in navigating a successful four-state transmission project involving thousands of landholders over a decade-long construction period.

It reveals how careful planning, helped by state public policy, can resolve disputes despite some community objections.

“They engaged to an unparalleled degree with landowners, town, city, and county administrators, state utility commissioners, legislatures, and regulators throughout the planning process to bring a new era of transparency and civic engagement to transmission planning, citing, and construction of new high-voltage transmission lines,” the U of M authors wrote.

By the standards of protests against transmission lines in Minnesota in the past, among them a bitter one in the 1970s that helped raise the profile of future Sen. Paul Wellstone, things this time around went more smoothly.

This was intentional. Kaul began his career in the midst a farmer’s revolt against a power line project that led to 120 arrests and 14 towers being vandalized by opponents – some which were transmitting energy when they were toppled.

Kaul told Midwest Energy News earlier this year in an interview that he vowed not to repeat the mistakes of the past. In fact, many CapX participants read Wellstone and Barry Casper’s 1981 book on the controversy, Powerline: The First Battle of America’s Energy War.

Second, landowners and community members on the proposed transmission pathways learned about the project through open houses, one-on-one meetings, media coverage, and a website rich in presentations, maps and other information.

The U of M report notes that in 2007 alone CapX mailed 70,000 invitations to public meetings and held 25 open houses. Utility employees who lived where the lines were being proposed came to make the arguments for their construction and to listen to the questions and recommendations of local people.

“One of the foundational things we did was engage really early, really often with really anyone who wanted to engage with us, so we could start talking about need, about possible siting, about expense,” Mogensen said. “We wanted to try to eliminate big fights. That was a fundamental principle of our approach.”

For the Fargo route, added Carlsgaard, the planners looked at 700 miles of route options before the 240-mile path. Planners offered multiple routes for every section of the line.

Plans for the lines were carefully laid to make them “as acceptable as we could,” Mogensen said. “But we know we’d never make everyone happy.”

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