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Utility Looks South for Power: New Link to Illinois Electricity Emerging As Next Possibility

Posted on: Tuesday, 7 February 2006, 12:00 CST

By Thomas Content, Milwaukee Journal Sentinel

Feb. 7--The leading contender for the next high-voltage power line proposed to beef up Wisconsin's connections with surrounding states appears to be a project from Dane County to Illinois.

Planners at American Transmission Co. in Pewaukee have been studying for several years the costs and potential benefits of various projects to build additional 345,000-volt lines linking Wisconsin and its neighbors.

More power lines are needed to improve the reliability of Wisconsin's grid when power plants aren't working, and to improve the state's ability to tap less costly electricity generated outside the state.

Wisconsin has four 345,000-volt lines linking it to Illinois and one to Minnesota, but none to the east or north. Surrounding states have many more lines linking them with the rest of the grid.

American Transmission Co. has said it would like to build a line 2013 to Illinois or Iowa as the next major interstate power line.

The staff of the Public Service Commission, in a report late last year, said the most cost-effective option may be a 35-mile line from southeastern Dane County through Rock County to the Illinois border, at a cost of $69 million. In its analysis of ATC's proposals, the commission said the benefits of building a power line to Iowa didn't appear significant enough to justify spending $352 million to build a 149-mile line.

Pewaukee-based ATC says the project through southwestern Wisconsin could yield economic development benefits for that region of the state, as well as give Wisconsin a way of importing more renewable power from wind-power projects in Iowa, supporters of that line say.

A final decision on whether to build a new power line is years away. At issue now is a study of what Wisconsin could gain from building another new major power line to another state, and whether those benefits justify the expense. The commission will discuss the issue at 9 a.m. Wednesday.

Milwaukee-based We Energies had been critical of both proposals, saying it was important for the commission to proceed cautiously with new expensive projects at a time when customers are being asked to pay for new power plants and transmission lines.

The utility is building new coal and natural gas-fired power plants, which carry a combined cost of $3 billion. And American Transmission Co. and Wisconsin Public Service Corp. are building a $420 million transmission line between Wausau and Duluth, Minn.

But We Energies said more recently said it would support the less costly Illinois project.

Groups representing Wisconsin manufacturers and papermakers also said they were concerned about the cost of the projects, noting that there was no guarantee that cheaper power would be available to import from outside Wisconsin.

American Transmission Co. has concluded that moving forward with the Illinois project first makes sense and allows the company, which is responsible for maintaining, operating and building power lines in eastern Wisconsin, more time to study the Iowa project.

In a related matter, federal regulators have rebuffed an attempt Wisconsin utilities and the commission to have other states in the Midwest region help foot the bill for major power projects, including the Wausau-to-Duluth power line.

In a decision late Friday, the Federal Energy Regulatory Commission said it was endorsing the funding proposal crafted the Midwest Independent Transmission System Operator, based in Carmel, Ind. Under the approved plan, Wisconsin will have to shoulder the entire cost of its own projects needed to keep the grid reliable, as well as a share of future such projects outside the state.

The decision is a victory for states such as Ohio that didn't want to see their rates rise to help pay for power line projects planned in Wisconsin, home to one of the most congested transmission lines in the nation, a line from the Eau Claire area to eastern Minnesota.

Wisconsin regulators and utilities say FERC's decision harms the state during a period of rising energy costs. They say the state is being penalized because it was planning for new power lines before other states' utilities that also participate in a Midwest wholesale electricity market that kicked off last year.

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Copyright (c) 2006, Milwaukee Journal Sentinel

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Source: The Milwaukee Journal Sentinel

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