FERC OKs Rates For 2 TransCanada Transmission Lines In US

Feb 19, 2009 - Dow Jones & Company, Inc.

Federal regulators approved power shipping rates Thursday for two high-voltage electric transmission lines that TransCanada Corp. (TRP) plans to build in the western U.S.

The transmission lines will primarily deliver wind power from Montana and Wyoming to customers in southern Nevada and in Southwestern states, the Federal Energy Regulatory Commission said.

TransCanada unit Chinook Power Transmission LLC is developing a 500-kilovolt line that will stretch 1,000 miles from wind farms in Harlowtown, Mont., to a delivery point near Las Vegas, and unit Zephyr Power Transmission LLC is working on a 1,100-mile, 500-kV line that will connect wind farms near Medicine Bow, Wyo., to Las Vegas. The lines will serve Las Vegas, Los Angeles, Phoenix and other Southwest energy markets.

The new lines "will expand our transmission grid's capacity to enhance development of our nation's renewable energy potential," FERC Acting Chairman Jon Wellinghoff said in a statement.

The nation's limited transmission capacity is cited by renewable-power developers, utilities and governments as the single largest hurdle holding back development and wider use of renewable power.

Wind farms have been proposed that would generate nearly 300,000 megawatts of electricity, which is about 20% of U.S. power demand, and 13,000 megawatts of solar power are under development in California, but new transmission infrastructure is needed to ship that power to the grid, according to a report released Wednesday by industry groups American Wind Energy Association and Solar Energy Industries Association.

Transmission developers and utilities say greater incentives and faster, streamlined permitting are needed to attract investment in new transmission lines.

FERC said it used a new system for processing TransCanada's transmission-line rate requests, as well as a new model for the rates themselves, to encourage investment in renewable generation and the electric grid. The two TransCanada lines will use what FERC calls an "anchor" customer model, in which the company will contract with a wind-generation company for half of the capacity on each line.

TransCanada, based in Calgary, said last month that it plans to announce a partnership with a large Western wind power generator as early as April.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@ dowjones.com