Wisconsin remains ahead of other states when it comes to investing in the new electric transmission and generation facilities needed to address future service reliability, according to a draft strategic energy assessment (SEA) by state regulators.
In addition, the state is well positioned to meet its near-term energy demand needs.
The Public Service Commission (PSC) of Wisconsin issued on June 14 its draft version of “Energy 2018,” the state’s biennial, statutorily required SEA.
The PSC also said the report, which covers 2012 through 2018, is based on data and information gathered in 2010 and 2011 from Wisconsin utilities and power cooperatives.
The PSC said it will issue a final report based upon the public comments it receives.
Energy rates continue to increase across customer classes in Wisconsin and the Midwest, the PSC said in the draft SEA, noting that rate increases are generally driven by, among other things, transmission, generation and renewable investments.
The PSC also said that Wisconsin utilities face a new challenge – having what appears to be additional capacity. However, this could be affected by any compliance plan to meet new EPA rules. Changes to the transmission system and operation will likely be a prerequisite to Wisconsin selling any excess capacity or energy. For instance, the PSC added, some transmission infrastructure improvements in the Chicago and northern Indiana area may be needed.
Adequacy and reliability are expected to remain robust with an acceptable planning reserve margin forecast through 2018, the PSC said, adding that this assumes that retirements associated with the implementation of various EPA air and water quality rules do not force dramatic fossil fuel plant closings in Wisconsin.
PSC staff estimates, using Midwest ISO (MISO) wholesale energy market data, that net congestion costs have been minimal to the group of Wisconsin load serving entities. Regarding system energy losses on the transmission grid, staff estimates a magnitude of $20m to $30m, the PSC added.
Transmission planning becoming regional, inter-regional
Transmission planning is becoming increasingly regional and inter-regional, the PSC said, adding that one new development is the potential integration of Entergy (NYSE:ETR) utilities to the south into MISO.
If approved by all six Entergy states and FERC, Entergy and its six utility operating companies would join MISO and integrate by the end of 2013. The addition of Entergy will add 15,000 miles of transmission and 30,000 MW of generation capacity into the MISO footprint, the PSC added.
There are various transmission expansion planning efforts that may have an impact on the state, the PSC said, adding that one of the broadest of such efforts is the Eastern Interconnection States’ Planning Council, funded by a U.S. Department of Energy (DOE) grant.
The Eastern Interconnection Planning Collaborative is an effort being developed and led by 26 planning authorities from the U.S. and Canada to conduct transmission analyses at the interconnection level.
MISO has produced targeted studies to address such issues as congestion, narrowly congested areas, narrowly constrained areas, renewable portfolio standards in the Midwest, and queue related and operational studies.
At a sub-regional level, the Organization of MISO States (OMS), whose purpose is to coordinate regulatory oversight among the states, is engaged in planning efforts in MISO, the PSC added.
The PSC also referenced MISO’s transmission expansion plan (MTEP), noting that in December 2011, MISO approved the MTEP11 cycle report, which contained 215 new projects that represent an incremental $6.5bn in transmission infrastructure investment within the MISO footprint. It was the first year that the multi-value project (MVP) category was used, the PSC said, adding that three of the MVPs approved are at least partially located in Wisconsin, including lines from La Crosse to Madison, from Madison to Dubuque and from Pleasant Prairie to Zion, Ill.
The MTEP planning process also includes projects that are still in a planning process or under MISO review, as well as projects that are in the early planning stages and have not been reviewed for effectiveness.
The PSC also listed recently announced American Transmission Company (ATC) reliability projects that have direct implications in or near Wisconsin, including the 345-kV line from Outagamie County to Marquette County and 138-kV line from Menominee County to Delta County in the Upper Peninsula to support the integration of the new lines into the network. The expected in-service date is 2014 and the estimated cost is $442m.
The PSC also noted that ATC has received two grants for smart grid projects, one for phasor measurement units (PMUs) to better monitor and adjust power quality on the transmission system, and one for a fiber optics communications system to retrieve data and maximize functionality from PMUs.
Other major transmission owners in the state include Xcel Energy (NYSE:XEL), which participated in the CapX2020 transmission plan. That plan sets out various projects that are mainly centered in Minnesota but include North Dakota, South Dakota and Wisconsin.
The PSC also discussed FERC Order 1000, noting that MISO believes it is mostly compliant with the order, but needs to expand documentation of some processes. While states are invited to more fully participate in the process, the exact nature of how that is to be done in each RTO is yet to be determined. The PSC also said that the MISO states through OMS are working on this initiative this year, adding that more will be known for the final SEA.