Otter Tail requests incentive rate treatment for two MVP lines

Otter Tail Power Company (NYSE:OTTR) on Nov. 2 filed a request for the Midwest ISO to approve incentive rate treatment for two planned multivalue transmission lines.

The Big Stone South to Brookings line and the Ellendale to Big Stone South line are the only projects in MISO’s multivalue project (MVP) portfolio that would directly access the wind-rich areas of North Dakota and South Dakota, Otter Tail claimed.

“Without these two vital links, the MVP portfolio could not achieve its objective of strengthening the MISO region grid’s ability to move power from areas of high wind power potential in North and South Dakota—on the western edge of MISO—to points east,” the company said.

The Fergus Falls, Minn.-based utility said it expects to invest $240m to $280m in the MVP projects during the next five to eight years. As such, Otter Tail requested 100% of prudently incurred construction work in progress, and recovery of 100% of prudently incurred costs of transmission facilities that are canceled or abandoned for reasons beyond the company’s control.

Both types of incentive rate treatments are authorized under FERC Order 679. The company expects MISO approval on Dec. 8.

The Ellendale to Big Stone South project is an approximately 145- to 175-mile long, 345-kV transmission line between the Ellendale Substation near Ellendale, N.D., and the Big Stone South Substation near Big Stone, S.D.

Total project costs are estimated to be $290m to $340m. The company expects to be 50% owner and operator, bringing costs to the company to $145m to $170m. The line has a projected in-service date of 2019.

MISO identified reliability, the ability to interconnect more generation, and reducing congestion along with fuel savings as the primary benefits of the project, Otter Tail said.

The reliability benefits include the mitigation of eight transmission constraints on the transmission system for 20 different NERC Category B contingencies, and the mitigation of six different constraints on the transmission system for 23 different NERC Category C contingencies, Otter Tail said.

The project will increase the ability of the transmission system to add more generation in “one of the best wind generation resource areas in the country,” the company said.

Otter Tail noted that the project could facilitate the integration of more than 500 MW of new renewable generation; there are over 4,000 MW of generation interconnection requests on the MISO system for projects in this area.

The Big Stone South to Brookings Project would comprise an approximately 65-mile long, 345-kV transmission line from a connection near Big Stone, S.D., to the Brookings County Substation near White, S.D., and a two-mile, 230-kV single circuit transmission line connecting to a related substation near Big Stone, S.D. 

The 65-mile, 345-kV line would be constructed in a double circuit-compatible configuration by using structures capable of supporting a second circuit in the future, the company said.

Total project costs are estimated to be $210m to $230m, but the company expects to be 50% owner and operator, bringing costs to Otter Tail to $125m to $140m. The line has a projected in-service date of 2017.

MISO determined that the project is required for reliability and support of renewable resources in the region, with the reliability benefits including mitigation of three transmission constraints on the transmission system for four different NERC Category B contingencies, as well as three different constraints on the transmission system for 14 different NERC Category C contingencies.

There are over 3,000 MW of generation interconnection requests on the MISO system for projects in this area, the company said, adding that the line could facilitate the integration of more than 800 MW of new renewable generation to the MISO system.

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.