Minnesota commission nears decision on transmission interconnect with Manitoba

The Minnesota Public Utilities Commission will be looking at its May 14 meeting at whether to approve an October 2013 certificate of need application from Minnesota Power for the Great Northern Transmission Line project, which will allow hydropower from Manitoba to be wheeled south into the Minnesota Power system.

Said a May 7 briefing memo from commission staff: “The Great Northern Transmission Line (Project) includes 500 kilovolt (kV) high voltage connections between the province of Manitoba in Canada and the Blackberry Substation in Itasca County, Minnesota. Minnesota Power proposed the line to enable additional electric energy deliveries from Manitoba Hydro to meet existing and future energy needs.

“The transmission line would be approximately 220 miles in length and require a right-of-way of 200 feet in most areas. The project area includes the following counties: Beltrami, Itasca, Koochiching, Lake of the Woods, and Roseau, depending upon selection of the final route location. The project would join with a new 90-130 mile transmission line in Canada to form a new international transmission interconnection from the Canada-United States border to the Blackberry Substation.

“The project as proposed was designed to provide at least 750 megawatts (MW) of transfer capability; however subsequent analysis indicated that the project would provide 883 MW of transfer capability upon completion. Construction of the Project is anticipated to begin in 2016, with an in-service date of June 1, 2020. The Project also includes expansion of the Blackberry Substation near Grand Rapids, Minnesota, as well as construction of a 500 kV Series Compensation Station located near the midpoint of the combined Manitoba and United States transmission line.

“The Great Northern Transmission Line is part of a joint development effort between Minnesota Power and Manitoba Hydro to construct a new Canada-United States transmission interconnection. Manitoba Hydro proposes to construct and have sole ownership of the Canadian portion of the new interconnection to the project.

“Minnesota Power will initially possess 51 percent ownership of the project. Manitoba Hydro’s subsidiary, 6690271 Manitoba, Ltd. (Manitoba Ltd.), will initially own 49 percent of the Project. Minnesota Power and Manitoba Ltd. will own the Project as tenants in common. Manitoba Ltd. has indicated that it plans to sell all or a portion of its share in the Project to one or more United States utilities before, during or after construction, and no later than mid-2016.

“At the time of the evidentiary hearing, Minnesota Power estimated the cost of the project to be between $557.9 million and $710.1 million. In September 2014, Minnesota Power and Manitoba Hydro entered into a multi-party Facilities Construction Agreement (FCA) with the Midcontinent Independent System Operator (MISO) which included a project cost range from $557.9 million and $710.1 million. The FCA also established the ownership percentages and financial responsibilities for the project.

“Minnesota Power and Manitoba Hydro have entered into contracts to provide for the exchange of wind and hydro energy intended for transmission by the Project; and establishes the relative financial responsibilities of the two utilities referred to as the Manitoba Hydro Agreements. In its 2010 Integrated Resource Plan (IRP), Minnesota Power identified projected increase in energy needs as well as an expected capacity deficit in the 2020 to 2035 timeframe due to customer load growth and diversification of its power supply. As a result, Minnesota Power indicated that it intended to pursue a 250 MW power purchase agreement (PPA) with Manitoba Hydro and build a new transmission line to deliver the power purchased.

“On February 1, 2013, the Commission approved the 250 MW PPA and associated Energy Exchange Agreement. Additionally, Minnesota Power executed a 133 MW Energy Sale Agreement and a 133 MW Energy Exchange Agreement (collectively referred to as Renewable Optimization Agreements, or ROA) with Manitoba Hydro on July 30, 2014. The ROA provides for an exchange of wind and hydro energy between Minnesota Power and Manitoba Hydro. Under the terms of the ROA, Minnesota Power customers are provided 230,000 megawatt hours (MWh) of additional annual carbon-free energy. Minnesota Power is also able to send additional energy from its wind-generating facilities to Manitoba Hydro when wind production is high and not needed for its customer load. In turn, when Manitoba Hydro is using Minnesota Power’s wind power for their customer load, Manitoba Hydro is able to temporarily reduce hydropower generation by decreasing the flow of water through its plants. The energy ‘saved’ during that process can be used later to generate electricity sent to Minnesota Power when wind energy production is low or customer needs are high.

“The Commission approved Minnesota Power’s Petition for approval of the 133 MW PPA on January 30, 2015. A Facilities Construction Agreement (FCA) was executed by Minnesota Power, Manitoba Hydro and MISO establishing the ownership percentages and financial responsibilities for the project on September 23, 2014. In acknowledgement of the additional capacity associated with the Project due to the addition of the 133 MW ROAs the FCA includes provisions requiring Manitoba Hydro to provide an additional five percent Contribution in Aid of Construction (CIAC) payment to Minnesota Power.”

Said the staff memo, citing a positive finding by a commission administrative law judge (ALJ): “Staff notes that parties (with the exception of RRANT) agree that the certificate of need should be approved. Staff reviewed the record, the public hearing transcripts and public comments and has identified no substantive concerns regarding the need for the proposed project. Staff largely agrees with the ALJ’s recommendation to grant the certificate of need.”

The Residents and Ratepayers Against Not-so-Great-Northern Transmission (RRANT) is an association of potentially affected landowners, farmers and residents and ratepayers within the immediate vicinity of the proposed line and in the service territory of Minnesota Power. This association initially opposed Minnesota Power’s application for a certificate, but did not file testimony in this proceeding.

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.