Clean Line gets utility status in Indiana for Grain Belt project

The Indiana Utility Regulatory Commission (IURC) on May 22 granted Grain Belt Express Clean Line utility status and authorized it to operate as a transmission-only public utility in the state.

Grain Belt Express, an affiliate of Clean Line Energy Partners, has proposed the $2bn, 700-mile, 600-kV HVDC transmission line that will be able to transport up to 3,500 MW of wind energy from Kansas to states farther east in the Midcontinent ISO (MISO) and PJM Interconnection.

“[T]he evidence indicates that the project will provide benefits to the state of Indiana and the region,” the IURC said in its final order approving utility status. “These benefits include the delivery of 15 million MWh of renewable energy per year; cost-effectively meeting growing demand for renewable energy; and increasing generator competition, which will exert downward pressure on wholesale energy prices in the MISO and PJM markets.”

In its order, the IURC required the company to provide annual updates summarizing the project’s construction and operational status and financing milestones, including vendors and contractors hired, operation and maintenance contractors retained, new debt and equity financings issued and any significant changes in Clean Line’s senior management.

As planned, the line would originate from a point in or around Ford County in western Kansas, a wind-rich area, and run to Ameren’s (NYSE:AEE) 345-kV transmission system in Missouri – within MISO’s footprint – and on to American Electric Power’s (NYSE:AEP) 765-kV Sullivan substation in Sullivan County, Ind., within PJM’s footprint. The line will be less than two miles long in Indiana, according to the IURC’s order.

The company plans to obtain all the major regulatory approvals and to sell a majority of the capacity through long-term capacity contracts before seeking construction financing, according to the IURC’s order.

Grain Belt Express Clean Line will participate in all of the regions affected by the project – Southwest Power Pool, MISO and PJM – according to the order.

The project will be incorporated into the RTOs’ regional transmission plans, and is currently undergoing connection studies in PJM.

“With the interregional nature of the project, definitive planning has been delayed until the PJM studies have been completed,” according to the order.

The project is designed to deliver wholesale energy to the RTOs, not to sell retail energy. According to the order, Grain Belt Express Clean Line has promised not to seek to recover costs of the construction or operation of the project from transmission users in general.

However, MISO or PJM, during their planning processes, may determine that the project has regional benefits and that the costs associated with the project could be regionally allocated under a FERC-approved tariff “through no action on the part of [Grain Belt Express Clean Line],” according to the order.

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.