Morgan Wind trying to clear obstacles to Minnesota project

Morgan Wind Acquisition Group LLC on May 18 petitioned the Minnesota Public Utilities Commission (MPUC) for an order amending a Large Wind Energy Conversion System (LWECS) site permit for its 31-MW LWECS project.

Morgan requested that the deadlines for construction to start and to obtain a power purchase agreement (PPA) be extended by two years. Morgan was unable to meet the 2011 deadline due to the total uncertainty of cost allocation for the planned Brookings County, S.D., to Hampton, Minn., 345-kV transmission line project. Fortunately, recent orders issued by the Federal Energy Regulatory Commission (FERC) have created opportunities for development to move ahead, the company said.

This amendment request is similar to those approved by the MPUC in 2011 for the Comfrey Wind Energy Project and the Sibley Wind Substation LLC Project, Morgan noted.

The Morgan project is located in southwest Minnesota, near the city of Morgan and on the border of Redwood and Brown counties. The total project area covers approximately 10,800 acres of agricultural land in Eden Township in Brown County and Morgan Township in Redwood County.

The project site has unique access to transmission service and a good wind resource, Morgan noted. Xcel Energy (NYSE: XEL) has a 69-kV line that runs along the project’s entire southern border. The planned Brookings Line actually crosses the project site.

Morgan intends to use 19-21 turbines rated between 1.5 and 1.65 MW, yielding a total nameplate capacity of 31.5 MW, as allowed by the permit. The turbines will be located at least 1,200 feet from all residences in the area, including those of both participating and nonparticipating landowners.

Project development started in 2006 with conception, negotiation of lease agreements to secure rights to approximately 4,500 acres of land, and conducting wind studies. A Large Generator Interconnection Agreement (LGIA) was executed with the Midwest ISO (MISO) and Xcel Energy in October 2008. The MPUC granted the permit in December 2009.

Morgan then encountered two problems developing the project. One was related to notice. Morgan’s parent company, Midwest Wind Finance LLC, initiated a staff reduction at the end of 2009. Morgan’s project manager was impacted by that reduction, and was notified of that decision during the same week the permit was issued. Unfortunately, the former project manager failed to send the permit to landowners, as required by the permit, before the end of employment in early January 2010. The former project manager also failed to inform Morgan’s management of the requirement, and management did not learn of the failure to provide notice until March 26, Morgan said.

Morgan’s primary problem, however, is that the project is part of the well-known MISO Study Group Five (Group 5). Morgan was therefore subject to the same uncertainty in allocation of the cost of the Brookings line that affected many other projects, including the Comfrey and Sibley projects.

Among other recent developments, the FERC issued an order on March 23 that will significantly impact Morgan and all other projects in the MISO interconnection queue. This order is expected to reduce the number of projects seeking to interconnect within the MISO footprint. The FERC authorized MISO to change the M2 milestone payment, which is a threshold requirement under MISO’s tariff for a project to move from the System Planning and Analysis phase of the interconnection process to the Definitive Planning Phase. In the past, projects were able to meet the M2 milestone through various means, including ordering turbines. Now, projects must make a significant cash payment to MISO. That deposit will likely not be refundable, and most projects will be required to make the payment regardless of whether they have previously met the M2 milestone.

“MISO and the FERC expect that this requirement will dramatically reduce the number of projects in the queue,” Morgan explained. “Morgan agrees. And Morgan expects that the reduction of total projects in the queue will, in turn, impact the cost allocation of the [Multi-Value Projects] and other upgrades required to interconnect Group 5 by reducing the overall load that MISO needs to accommodate on the transmission system. In theory, that may result in fewer required upgrades to the transmission system.”

Morgan said it still needs time to complete development tasks that depend on knowing the final costs of the project, including interconnection fees. These steps include waiting for a Group 5 facilities study to be completed sometime this year, and then entering into a power purchase agreement or finding another mechanism to power, completing negotiations with an equity investor, finalizing a turbine supply agreement, entering into a construction contract and performing pre-construction studies and surveys required by the permit.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.