Missouri municipal utilities sign up for Grain Belt Express

Source: By Jacob Barker St. Louis Post-Dispatch • Posted: Tuesday, June 7, 2016

Missouri municipal utilities have signed up for space on the Grain Belt Express, a 780-mile transmission line that would carry wind power from western Kansas to population centers further east.

The Missouri Joint Municipal Electric Utility Commission said Thursday that it had signed an agreement for as much as 200 megawatts of transmission space on the cross-state line. The group represents municipally owned utilities in the state that pool their resources to buy power and is administered by the Missouri Public Utility Alliance.

The contract could bolster Grain Belt’s case with the Missouri Public Service Commission, which single-handedly blocked the project last summer on a 3-2 vote. While members acknowledged it may benefit other states, they weren’t convinced it was worth it for Missouri ratepayers.

Clean Line, which is proposing the transmission line, has said it would deliver up to 500 megawatts of power into Missouri, but about 3,500 megawatts of electricity would be shipped through the state to a grid further east where prices are higher.

Faced with vocal opposition from rural landowners who don’t want to sell easements to the company, a majority of the commission felt that the benefits to Missouri ratepayers weren’t large enough to grant the company utility status and the right of eminent domain that comes with it.

Clean Line President Michael Skelly said the new agreement, however, gave Missouri municipal utilities “low-cost access to really the best wind resources in the country.”

“We heard the commission’s concerns loud and clear, and one of them was they wanted to know there were actual Missouri customers for the line, and we’ve now proven that out,” Skelly said.

The new contract, which is contingent on Clean Line’s winning approval from Missouri regulators, would replace an electricity contract with Dynegy coal plants expiring in 2021, the year Grain Belt is supposed to be operational.

“From an analysis we have based on the offer they gave us, we believe it’s going to save us about $10 million annually,” said Ewell Lawson, who manages government relations and member services for the Missouri Public Utility Alliance.

About 35 of the Missouri Joint Municipal Electric Utility Commission members are part of the contract now to procure from 50 to 100 megawatts of space, Lawson said. But more of the group’s 67 members can join and reserve space up to the 200 megawatts outlined in the contract.

The costs, including transmission, would be below what the municipal utilities are paying for coal now, Lawson said.

“Kind of what we’re seeing in the market right now for wind would bring it to Missouri at about 3 cents per kilowatt hour,” he said.

Skelly acknowledged opposition from landowners who aren’t interested in selling easements to the company will probably remain. But he’s hopeful the state will see enough local benefit to approve the final leg of the transmission line.

Grain Belt Express has already won approval from Kansas, Indiana and Illinois regulators.

“We’ve had opposition in the past and we may in the future,” Skelly said. “But we think this agreement is a very positive development for the project.”