Willmar Utilities hints that it might join the southern Minnesota power line project
WILLMAR -- The Willmar Municipal Utilities would derive some financial benefit by investing in a proposed power line in southern Minnesota. Willmar and dozens of other utilities are being offered the opportunity to invest in a $582.9 million, 345...
WILLMAR -- The Willmar Municipal Utilities would derive some financial benefit by investing in a proposed power line in southern Minnesota.
Willmar and dozens of other utilities are being offered the opportunity to invest in a $582.9 million, 345-kilovolt power line from Brookings, S.D., to the Twin Cities under a Federal Energy Regulatory Commission policy that gives all electric utilities a chance to invest in transmission lines and receive some return on investment.
The Willmar Municipal Utilities Commission discussed the investment opportunity at its Monday meeting and gave preliminary approval to joining the project. The issue was referred to the commission's Planning Committee for further discussion and recommendation.
Commissioner Marv Kray offered the motion for preliminary approval. Kray said Bob Jablon of Washington, D.C., an attorney for the Midwest Municipal Transmission Group, spoke in favor of transmission investment during the state meeting of the Minnesota Municipal Utilities Association in August.
"He feels transmission is so important and you want to be part of it,'' said Kray. He said the Planning Committee will study and recommend whether or not Willmar should participate.
Willmar's share of the project is estimated at $3,329,525, according to Midwest Municipal Transmission Group, one of nine power line sponsors.
The transmission group represents Willmar and 77 other municipal utilities.
Mike Nitchals, Willmar Utilities general manager, explained Willmar would receive revenue from its investment, which would be used to offset the cost of transmission and would be a way to keep costs to electric customers as low as possible.
Willmar would not directly receive power from the line, he said.
However, Willmar is connected to the larger transmission grid, and a stronger grid will provide more reliable delivery of power to local customers, he said.
The power line is a project of CapX 2020, which represents nine investor-owned, cooperative and municipal utilities and agencies working to ensure long-term electric reliability for Minnesota and four other states.
According to the CapX Web site, studies show that demand for electricity will grow by 6,300 megawatts by 2020, resulting in the need to build 8,000 megawatts of new generation to account for required reserves and energy lost during transmission.
To accommodate this growth in demand for new power, the transmission grid will require major upgrades and expansion to ensure reliability, the Web site said.
Willmar already has some experience in transmission ownership as a result of its agreement with power supplier Great River Energy. Nitchals said Willmar receives some reduction in transmission costs by owning the southwest substation and power lines running into and some running out of the substation.
"Most small utilities like Willmar -- which is a little bit of an exception -- have not been able to make these transmission investments,'' he said. "We've only been transmission payers to this point. This gives us a chance to get some of those returns that others are getting. Conceptually it's a great opportunity.''
In other business, Commission Chairman Bob Bonawitz and commissioner Jerry Gesch reported on their attendance at a recent Minnesota Public Utilities Commission hearing on a proposed power line for the Big Stone II power plant project.
Bonawitz and Gesch presented Willmar's support for the Big Stone II power line to the administrative law judge taking testimony.