Wind developers argue for Missouri approval of Grain Belt grid project

Wind developers say that a new power line proposed by Grain Belt Express Clean Line LLC in Missouri is a needed pathway to get wind power to be developed in western Kansas to market.

Grain Belt Express Clean Line is currently seeking from the Public Service Commission of Missouri a certificate of convenience and necessity (CCN) to construct, own, operate, control, manage, and maintain a high voltage direct current (HVDC) transmission project in Missouri. This line and an associated converter station would provide an interconnection on the Maywood-Montgomery 245 kV transmission line.

The project is designed to create an unhindered pathway for the delivery of wind-generated power from Western Kansas to load centers in Missouri, Illinois, and Indiana.

Grain Belt Express Clean Line is seeking multi-state authority to build anapproximately 750-mile HVDC line originating in southwest Kansas and terminating in east central Illinois, with converter stations in Kansas to deliver from southwest Kansas into eastern Missouri 500 MW of alternating current (AC) electricity and 3.5 GW of AC electricity into west central Indiana.

Said Infinity Wind Power in Dec. 8 testimony in this case: “Grain Belt Express seeks approval of its project in order to fill a void that exists in the current transmission grid infrastructure. By filling the void, the Grain Belt Express project will allow wind developers to more fully deploy strategies to address the underdevelopment of wind resources, which will permit Missouri and other eastern purchasers the opportunity to enjoy unrestricted access to low-cost clean energy sources.

“Without ample transmission, Western Kansas wind resources will continue to be underdeveloped, thereby perpetuating market inefficiencies that exist due to the hindered supply of wind energy to Missouri and other eastern purchasers.

“There is no question that western Kansas has abundant wind resources, and that these resources are currently underdeveloped. Statistics show that Kansas has wind generation capacity of approximately 760,000 MW, but of that only 2,713 MW was installed as of the end of 2013. One primary reason for the disproportionate amount of development in relation to the potential is the lack of adequate transmission infrastructure to support the export of wind energy outside the resource area. “Throughout the course of this proceeding there appeared to be no real dispute as to the abundance of the Kansas wind resource or the underdevelopment of the resource, rather the focus has been on whether the current transmission grid is adequate to support wind development expansion to the magnitude supportive of the approximate 750,000 MW of generation potential still left to be developed.

“Wind developers like Infinity know from experience that the current infrastructure is inadequate to support such development. As explained by Infinity witness Mr. Matt Langley, the current transmission regime consists primarily of alternating current (AC) transmission lines located within the individual regional transmission operator (RTO) footprints. Because RTOs study transmission needs based on the load within the respective RTO, the focus of the RTO is narrowly confined to the RTO’s own footprint. What results is compartmentalized transmission pockets developed with a narrow focus on the immediate RTO’s load demands. Yet, even within these pockets, transmission constraints and congestion still exist. In order to move large quantities of wind energy through the existing RTO where the project is located, companies like Infinity must utilize the existing AC transmission pathways, which are insufficient and ineffectual to accomplish such endeavors.”

Another wind developer filing Dec. 8 post-hearing testimony in this case was TradeWind Energy Inc. As a renewable energy development company, headquartered in the Kansas City Metropolitan Area, that develops wind and solar energy throughout the Great Plains, TradeWind said it is familiar with the wind energy market, including the current market limitations, the need for growth, and the potential benefits of wind energy.

“Wind energy has the potential to deliver low cost clean renewable electricity to customers in the Great Plains’ region, including Missouri, and electric energy customers in other regions of the United States. TradeWind believes that a demand exists for clean energy in the markets in Missouri and east of the Mississippi river and that the demand will continue in the future.

“Currently, limited capacity exists to transmit wind energy from the Great Plains to markets in Missouri and east of the Mississippi river. The proposed Grain Belt transmission line addresses the existing capacity limitation on the transportation of wind energy, and permits the transportation of wind energy outside the Southwest Power Pool Regional Transmission Organization (‘SPP RTO’) region. Approval of the Grain Belt CCN would provide an electric conveyance system capable of moving wind energy from the robust wind-generating Great Plains to markets in Missouri and east of the Mississippi river, where low cost clean wind energy is not readily available.”

Missouri PSC staff not supportive of this project

Noted the Missouri PSC staff in its Dec. 8 brief: “This request is novel because it is the first time anyone has sought from this Commission a certificate of convenience and necessity for any part of a transmission line project for which the FERC has authorized the developer of the project to negotiate transmission right rates.”

Staff added: “As it has expressed in its testimony and position statements, Staff recommends that the Commission find that Grain Belt Express has not established that the transmission line or converter station in Missouri are needed, economically feasible or promote the public interest and, therefore, not grant Grain Belt Express a certificate of convenience and necessity for them. However, if the Commission finds Grain Belt Express has shown the transmission line and converter station are necessary or convenient, then Staff recommends the Commission limit the authority it gives to protect life and property by requiring the entire multi-state HVDC transmission line be built with dedicated metallic return conductors and by requiring the entire multi-state project be built with protection and control safety systems that will automatically de-energize it when an abnormal or fault condition occurs.”

Staff also recommends the commission explicitly state in any such order that the grant of the certificate of convenience and necessity is not a determination of the ratemaking treatment of the costs associated with the transmission line or converter station in Missouri. It also recommended a series of protections for local property owners in Missouri along the power line route.

Grain Belt Express relies on the Missouri Renewable Energy Standard for the need in Missouri for the transmission line and Missouri converter station, said PSC staff. “That reliance is questionable. The Missouri Renewable Energy Standard requires only investor-owned electric utilities to generate or purchase electricity generated from renewable energy resources or to buy renewable energy credits to meet no less than fifteen percent of their retail electric sales in each calendar year beginning in 2021. Only Union Electric Company, d/b/a Ameren Missouri, has not yet disclosed whether it has existing capacity and new contracts that will meet or exceed that requirement.

“As to the asserted pent-up need for transmission to deliver wind energy from southwest Kansas into Missouri that is Grain Belt Express asserts is holding up the development of wind farms there, it is Staff’s position that, similarly to Grain Belt Express’ transmission line project, many of these wind farms are project financed, which means they need sufficient financing commitments before construction begins.”

A positive for the project, said staff, is its financial backers. “Through intermediary entities Grain Belt Express is owned primarily by GridAmerica Holdings, Inc. (‘GridAmerica’), a subsidiary of National Grid USA, and by Clean Line Investor Corp., a subsidiary of ZAM Ventures, LP (‘ZAM Ventures’). As of December 31, 2013, National Grid USA had a total book value capitalization of approximately $14 billion, and, as of March 31, 2014, its parent, National Grid Plc had a total book value capitalization of about $57 billion. ZAM Ventures has a consolidated net worth of $500 million based on U.S. GAAP measurements. Through intermediary entities ZAM Ventures is owned by Ziff Brothers Investments, LLC, a multi-billion dollar family investment fund. The estimated net worth of the three Ziff Brothers is approximately $14 billion. The foregoing show that Grain Belt Express has the financial ability to move forward with this merchant project and it is Staff’s position that Grain Belt Express satisfies this factor.”

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.