CEO: Clean Line gets green light, will wait to sell capacity on Rock Island

Clean Line Energy has been granted FERC authorization to solicit subscribers for its Rock Island merchant transmission project, but will wait to do so until the project has advanced in the permitting process, CEO Michael Skelly told TransmissionHub on May 24.

“We’re in fairly close contact with potential customers on both ends of the line, but we all agree that we’re going to need to be further along in the permitting process before we get down to hammering out subscription agreements,” Skelly said.

FERC on May 22 issued an order (ER12-365-000) granting Rock Island authority to presubscribe up to 2,850 MW, or 75% of the project’s 3,500 MW planned capacity. The remaining 25% will be sold through an open season. Clean Line submitted an application for authorization to sell transmission services at negotiated rates to FERC in November 2011.

Skelly speculated that with the 75/25 ratio, FERC is seeking to strike a balance between helping merchant transmission developers and enforcing the principle of open access.

“FERC recognizes we can’t build this line if we don’t have any customers,” Skelly said. “If you had 50% of the capacity open, that would be harder to finance because you wouldn’t have customers yet. But if it were a case of 100%, then FERC’s concern would be we want to maintain the principle of open access.”

Rock Island is a 500-mile, 600-kV HVDC transmission line that will run from western Iowa to eastern Illinois, where it will interconnect with PJM Interconnection. The project, which is estimated to cost $1.7bn, aims to bring energy from the “wind belt” in the Midwest to load centers in the East.

The project’s route has been narrowed down to a two- to five-mile corridor, TransmissionHub reported in March.

When complete, operational control of the line will be transferred to either the Midwest ISO or PJM. These discussions will take place before the line enters operation. 

“Clean Line and the RTOs will need to discuss the pros and cons of each possibility and come to a mutually agreeable result that ensures the most efficient and reliable operational control,” Wayne Galli, Clean Line’s vice president of transmission and technical services, said. 

Clean Line’s November 2011 application requested that FERC allow it to give preference to renewable energy resources in its open season, which the commission denied in its May 22 order.

“Rock Island argues generally that public policy considerations and its need to attract support from stakeholders such as environmental organizations justify such a renewable energy preference,” FERC said in the order. “We find that Rock Island’s general arguments do not sufficiently explain how distinctions between renewable energy resources and other types of generators justify its requested preferential treatment in an open season for initial transmission capacity.”

Clean Line chipping away at three other projects

Clean Line is still waiting to hear from the U.S. Department of Energy (DOE) regarding partnership on the Plains & Eastern project, Skelly said.

“Conversations continue in a positive fashion,” the CEO said, adding that the company may have an announcement on the matter in “the next month or two.”

Plains & Eastern was proposed in response to a DOE request for proposals under Section 1222 of the Energy Policy Act of 2005, which allows the DOE to accept private funding for transmission projects.

Plains & Eastern is an 800-mile, 600-kV transmission line that originates at the Diamond substation in Oklahoma and terminates at the Memphis substation in Tennessee, according to TransmissionHub data.

 The company may also pursue a partnership with the DOE on its Grain Belt transmission project, but is focusing first on completing the process for Plains & Eastern, Skelly said. Grain Belt is a 550-mile, 600-kV transmission line that originates at Spearville, Kan., and terminates at St. Francois, Miss. 

For the Centennial West project, Clean Line is still working through “various agreements” with the Western Area Power Administration (WAPA), Skelly said.

The company has an agreement with WAPA and the Bureau of Land Management to be its co-leads for the NEPA process.

Centennial West Clean Line is a 900-mile, 600-kV HVDC transmission line that originates at Guadalupe, N.M., and terminates at Mira Loma, Calif.

Grain Belt is a 550-mile, 600-kV transmission line that originates at Spearville, Kan., and terminates at St. Francois, Miss.

Plains & Eastern is a 800-mile, 600-kV transmission line that originates at the Diamond substation in Oklahoma and terminates at the Memphis substation in Tennessee, according to TransmissionHub data.

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.