Proposed electric line gets key federal approval

Source: By John Green, The Hutchinson News • Posted: Friday, May 16, 2014

Power line

Grain Belt Express Clean Line LLC said it has secured approval from the Federal Energy Regulatory Commission (FERC) to negotiate agreements to sell capacity on its proposed 3.5-GW overhead transmission line.

The 750-mile-long Grain Belt Express will link wind farms in western Kansas with utilities, load-serving entities and clean energy generators in Missouri, Illinois and Indiana, eventually transporting power for an estimated 1.4 million households annually, according to company estimates.

“FERC’s jurisdiction is pretty much limited to making sure that the process of selling transmission rights is open and transparent and non-discriminatory,” said Mark Lawlor, director of development for Clean Line Energy. “To make sure we aren’t building lines to give some competitors an advantage that others don’t have access to.”

Their model, Lawlor said, is different than traditional transmission lines.

“Historically, in the past different kinds of projects required an open season, like a bid or auction-type process,” he said. “The important part for us is that FERC took a look at our business model and developed a policy to accommodate projects of this nature. As long as it’s open and everyone has an opportunity to participate, it allows us to subscribe 100 percent of the capacity of the line through bilateral contracts.”

The method allows more flexibility to sign up “large anchor tenants,” Lawlor said, who have “more credit and security.”

Generator interconnection to the Grain Belt Express will still be subject to the requirements of the project’s open access transmission tariff. Officials don’t expect the line to go into commercial operation until 2018, but with FERC approval the company can now begin talks with potential customers, Lawlor said.

The exact method for selling capacity on the line or how it will be priced hasn’t been determined, he said.

“There are a lot of factors that will go into it that still need to be sorted out: what the demand for it is; what costs we’re going to incur to build the line, and so forth. A lot will develop through the process. It’s still early in the process.”

Meanwhile, Lawlor noted, the company also continues through state regulatory processes.

The Kansas Corporation Commission awarded Grain Belt Express a siting permit for the estimated $1.7 billion project in November 2013. In March, the company filed an application with the Missouri Public Service Commission to be recognized as a utility in that state.

“We don’t have a procedural schedule, but we expect to see something in the next week or so,” he said.

They expect approval in Missouri before the end of the year, and in Illinois by the end of 2015, Lawlor said.

“In that time frame, we’ll start the process of selling capacity. It will be a multi-step process,” he said.