Wind power might require a costly grid expansion

The Midwest could be crisscrossed with a new network of high voltage power lines to move wind-generated power from the windiest spots in the Dakotas, Iowa and Minnesota.

A group of utilities in 11 states, including Pewaukee-based American Transmission Co., is studying three alternatives, each of which would cost at least $23 billion over the next 20 years.

What's unclear: How much it will end up costing for Wisconsin's share of the projects. A more detailed analysis has been launched to help determine what the payoff could be in savings from increasing the flow of low-cost power around the region, said Flora Flygt, ATC's director of strategic projects.

The studies are in response to public policy moves that could result in a dramatic increase in wind energy development. More than 30 states have moved to spur utilities to add more renewable energy. Federal energy legislation pending in Congress could set a national renewable mandate as well.

Pewaukee-based ATC, along with Dairyland Power Cooperative and Xcel Energy, are also studying a high-voltage 345,000-volt power line that would link La Crosse with Madison, with studies slated to be completed by the end of the year.

There's no question that building essentially a brand-new extra-high voltage system for power will cost a lot. A study by ATC, Xcel Energy and other Midwest utilities, known as the Smart Transmission study, pegs the total cost at $23 billion to $25 billion, by 2029.

The 20-year planning document identifies several projects that would come into the state - some of them by 2019 - including 345,000-volt lines or 765,000-volt lines that would cross southern Wisconsin. It also identifies a direct-current power line across Lake Michigan to create another west-to-east corridor for power.

The utilities' report, the Strategic Midwest Area Renewable Transmission study, follows the unveiling last year of a plan by ITC Holdings of Novi, Mich., that proposed a high-voltage network in the Midwest at a cost of $10 billion to $12 billion. Earlier this year, planners at the Midwest wholesale power market produced a report detailing a variety of options that cost upward of $16 billion.

Key questions remain about the plans to add a renewable power "overlay," most notably, who would pay.

Some proposals would tab developers of wind farms for a share of the cost - proposals that wind developers say could lead to decreased wind farm development across the region.

"If transmission costs become too expensive, it will make Midwest renewable energy less competitive vs. other areas of the country, and send a signal to the market to develop projects in more competitive areas," said Joe De Vito, chairman of RES-Americas and board chairman for Wind on the Wires, in a recent statement.

But customer groups are concerned that Wisconsin customers could end up paying for lines for which the state doesn't see much gain.

"How much do Wisconsin ratepayers really need to subsidize the rest of the Midwest, or customers on the East Coast that want to have a renewable portfolio standard?" said Todd Stuart, executive director of the Wisconsin Industrial Energy Group, a trade association that advocates for affordable and reliable energy.

Wisconsin has invested billions in shoring up its power grid to make up for years of under-investment in transmission lines, and utility customers across the state have already been paying for those upgrades, he said.

But it's possible the state could see benefits from added transmission lines, said Flygt and Eric Callisto, chairman of the state Public Service Commission.

Developing a system that moves power around the region more efficiently would provide increased reliability and better access to lower cost renewable power generated west of Wisconsin, Callisto said.

But utility regulators will weigh those benefits against the cost to customers, he said.

"There are a lot of things that help the economics, but the bottom line is these are still very large investments. They're not going to be built all at one time, but even a phased-in build-out of a couple billion dollars over the next decade represents real dollars to real ratepayers," Callisto said.

That's why it's important for there to be a variety of studies with different assumptions looking at what potential economic benefits from power lines may be, he added.

Among the proposals is a high-voltage line along the bottom of Lake Michigan linking Wisconsin and Michigan.

A line with underwater cables crossing Lake Michigan could also have economic benefits for Wisconsin and other parts of the region, Flygt said.