ME3 POLICY POSITIONS ON TRANSMISSION FOR MOVING WIND POWER TO MARKET

March 13, 2002 me3.org

Background

Currently, 92 percent of Minnesota's electricity needs are met through coal-fired or nuclear generation, with all of the environmental harms created is using those energy sources. Only 2 percent of our electricity needs are met with clean, renewable energy. The increased use of renewable energy will improve the environmental quality of the region. Minnesota and the Upper Midwest region enjoy substantial wind resources that allow us to diversify our electricity portfolio with a much higher proportion of renewable energy. The Minnesota legislature has set a statutory goal that 10 percent of the state's electricity be provided by renewable energy by 2015, in addition to the 950 megawatts of renewable energy being developed under the 1994 Prairie Island compromise. According to the American Wind Energy Association, Minnesota has 75,000 megawatts of wind energy potential. The states of North and South Dakota combined contain another 255,600 megawatts of wind energy potential. Minnesota consumers will need additional electricity capacity in the next 10 years, and wind development can supply a substantial share of those needs.

In order for the Upper Midwest to secure the multiple environmental and socioeconomic benefits of developing this nonpolluting wind energy source, transmission policy must be designed to facilitate moving thousands of megawatts of wind energy to markets. The existing transmission system in the Upper Midwest has little excess capacity for additional large wind farms. Further development of wind generation in the region will require the construction of new transmission lines. We need coordinated long-range planning to get economical, large-scale wind generation development, and to get that clean energy to market.

Federal open access rules for transmission raise concerns about the potential for non-renewable resources to capture any new transmission capacity built for wind development in the region. ME3 is exploring provisions by which capacity on transmission lines built to enable wind development can be set aside for wind-generated energy. Building transmission incrementally at an appropriate scale would make it less likely that transmission capacity needed to support further wind power development could be usurped by coal-fired power plants. Minnesota utilities could help by committing to signing wind power purchase agreements within a timeframe that would prevent nonrenewable-generated electricity from "filling" new transmission lines. Because wind projects can be developed within 12-18 months, they can respond far more quickly to energy needs than can nonrenewable energy projects, which can take 5-7 years to develop.

Through transmission policy, leaders also can work to eliminate barriers for small-scale wind energy projects. A major hurdle is the high cost of connecting small wind projects to the transmission grid. For many landowners, this expense is prohibitive. One mechanism to facilitate access for local generation projects would be a requirement that lower voltage "underbuild" line be strung on the same poles used for high voltage transmission (i.e. a 34.5 kV network attached underneath a higher voltage 115/161 kW transmission line). The underbuild connection would reduce small project interconnection costs to more modest levels, and thus expedite small wind development. In addition, such connections would create less environmental impact. However, unless small wind projects serve only local loads, high-voltage transmission lines also will be needed.

Full environmental review of any new transmission project must occur prior to issuance of a Certificate of Need by the Minnesota Public Utilities Commission, or Site Certificate by the Minnesota Environmental Quality Board. Environmental review must be grounded in environmental and public health protections; economic considerations must include environmental costs and the potential for sustainable local economic development.

ME3's Policy Positions on New Electricity Transmission for Moving Wind Power to Market

• As its highest priority, ME3 supports investments in energy efficiency to minimize the need for new electricity generation and transmission.
• ME3 supports the responsible development of new transmission capacity needed to bring thousands of megawatts of wind power from the rural Upper Midwest to markets.
• ME3 supports maximizing the use of existing transmission lines and corridors prior to opening new transmission corridors.
• ME3 supports open transmission access for renewable energy market participants on terms that do not discriminate against variable resources, such as wind power, or against small-scale producers.
• ME3 supports transmission policies that facilitate locally owned, small-scale wind development that benefits farmers and local communities.
• ME3 supports the development of low-voltage transmission to connect small-scale wind projects to the high-voltage transmission grid.
• ME3 supports transmission policies that assure that transmission investments supported by affected communities in order to allow wind power development are not filled instead by non-renewable generation.
• ME3 supports the active participation of local landowners, tribes, and communities throughout the transmission planning, siting, and routing processes.
• ME3 supports appropriate compensation for all property owners affected by transmission projects.
• ME3 supports the fair allocation of transmission costs in proportion to the benefits that transmission provides, including enhancing system reliability, serving native load, and providing market opportunities.

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