Minnesota Power customers want protection from power line delays

Several large power customers of Minnesota Power told the Minnesota Public Utilities Commission that they should not have to bear any extra transmission costs related to the utility’s plans to take power from a North Dakota wind project.

Various companies are in the “Large Power Intervenors” group, including: ArcelorMittal USA (Minorca Mine); Boise Inc.; Enbridge Energy LP; Hibbing Taconite Co.; and Mesabi Nugget Delaware LLC.

On Sept. 27, Minnesota Power filed its petition for approval of investments and expenditures related to the development of the Bison 4 Wind Project and associated transmission facilities and upgrades. The Bison 4 project is to be a 204.8-MW wind facility located in Oliver County, N.D., adjacent to Minnesota Power’s operating Bison 1, 2, and 3 wind projects.

According to the petition, energy from Bison 4 will be delivered to customers via a combination of the High Voltage Direct Current Transmission Line (the “DC Line”) and the North Dakota and Minnesota alternating current transmission system. Minnesota Power acquired the DC Line in 2009 from Square Butte Electric Cooperative and is in the process of upgrading it to allow for continuous operation at 550 MW by the end of 2013.

Minnesota Power currently shares the firm transmission service of the DC Line with Minnkota Power, which uses the DC Line to deliver 227.5 MW of power from the coal-fired Milton R. Young Unit 2. Minnkota Power will discontinue using the DC Line upon completion of its Center-to-Grand Forks 345 kV AC transmission line project (the “Minnkota 345 kV Line”). Construction of the new Minnkota 345 kV Line originally was scheduled to be completed no later than the end of 2013, but the completion date has been delayed until Feb. 28, 2014, the Large Power Intervenors (LPI) said.

“LPI does not dispute that, based on Minnesota Power’s analysis, Bison 4 appears to be cost competitive,” the group wrote. “However, LPI has previously expressed concern about the potential impacts on ratepayers of any delay in the completion of the Minnkota 345 kV Line. Since completion of that project has already been delayed two months and Minnesota Power is relying on gaining full access to the DC Line in order to efficiently deliver energy from Bison 4 and the existing Bison Wind Projects, LPI respectfully requests that the Commission recall its previous determinations regarding allocation of risks associated with construction of the Minnkota 345 kV Line. In previous proceedings related to the DC Line, LPI argued that that ratepayers should not bear the risk of construction delays for Minnkota’s 345 kV line.”

The group pointed out that in its order approving Minnesota Power’s purchase of the DC Line, the commission agreed with LPI that ratepayers could be harmed by delays in completion of the Minnkota line and required that Minnesota Power “hold ratepayers harmless from increases in costs, if any, if Minnkota fails to timely complete the 345 kV AC transmission line.” The commission also ordered Minnesota Power to file updates on Minnkota’s 345 kV Line every six months. In its most recent update, filed July 10, Minnesota Power acknowledged the two-month delay and said that it is analyzing the potential impact on ratepayers.

“Minnesota Power’s analysis of curtailment and delivery risks for Bison 4 rely on timely completion of the Minnkota 345 kV Line,” LPI said. “While the anticipated February 28, 2014 completion date for the Minnkota 345 kV Line remains several months ahead of Minnesota Power’s plans to bring Bison 4 online in December 2014, any further delays could create deliverability issues and increased costs. Further, the two-month delay means Minnesota Power will not have full access to the DC Line in early 2014 for delivering energy from the operating Bison 1, 2, and 3 Wind Projects. Consistent with the Commission’s order when it approved Minnesota Power’s acquisition of the DC Line, ratepayers should be held harmless from any costs associated with this delay.”

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.