Source: Times Free Press | Dave Flessner | April 3, 2016
America’s biggest carrier of wind power moves forward
With the newly approved support of the federal government, developers of what will be one of America’s biggest transmission lines hope to be able to carry enough wind-generated electricity to the Tennessee Valley by 2020 to power nearly 1.5 million homes.
Mario Hurtado, vice president of development for the Houston-based Clean Line Energy Partners LLC, said the decision by the U.S. Department of Energy last month in favor of the Plaints and Eastern line clears the way for developers to buy the required property rights of way, using eminent domain if necessary, and to negotiate power purchase agreements with utilities wanting more wind power.
“This was critically important for moving the project forward,” Hurtado said of the DOE decision. “It’s a very big milestone and opens the way for us to move forward and consolidate a lot of the commercial discussions we’ve been having for some time.”
The Houston-based company has spent the past seven years planning and preparing plans for a $2.5 billion direct current transmission line to be built from the panhandle of Texas and Oklahoma where the wind steadily blows to the western edge of the Tennessee Valley where Southern utilites could get wind-generated power for prices comparable with most other generation at 4 to 6 cents per kilowatthour, Hurtado said.
“There is a tremendous opportunity right now with interest rates and commodity prices so low to build the windmills and transmission facilities to deliver clean, wind-generated power at very attractive prices,” he said. ‘One of the advantages of having a project like the Plains and Eastern there in the TVA region is that it provides a pipeline that they can supply to people like Google, Wal-Mart, Nissan or General Motors that are trying to meet coporate goals for sustainability.”
TVA, which already has nine contracts with wind producers in the Midwest for a total of 1,542 megawatts of power, signed a memorandum of understanding with Clean Line Energy Partners in 2011 to study their transmission line proposal. But TVA has made no commitment yet to buy any of the wind-generated power Clean Line will carry, nor have other Southern utilities that might use TVA transmission lines to carry the wind power brought to the region by Clean Line Energy.
Until the Department of Energy granted approval for the project to use eminent domain to acquire some sites for the line, the project remained uncertain.
The project developers have spent tens of millions of dollars over the past seven years working and modifying the proposed transmission line through Arkansas, Oklahoma and Tennessee. Last year, Arkansas regulators balked at providing the developers utility status needed to buy some of the land required for the project.
The DOE endorsement in late March would allow the developers to partner with the Southwestern Power Administration to gain the right to acquire property rights of way in Arkansas to facilitate the Clean Line transmission corridor.
U.S. Sen. Lamar Alexander, R-Tenn., a critic of wind power subsidies and what he calls “unsightly windmills”, criticized DOE for overruling local opposition to the Clean Line Project.
“Basically this decision says that Washington, D.C., knows more than the people of Arkansas do about whether to build across the state giant, unsightly transmission towers to carry a comparatively expensive, unreliable source of electricity to the Southeast where utilities may not need the electricity.”Alexander said. “This is the first time federal law has been used to override a state’s objections to using eminent domain for siting electric transmission lines. It is absolutely the wrong policy.”
But supporters of the project note that natural gas pipelines, interstate highways and other major power projects have relied upon federally granted authority to acquire property for major development across state lines similar to the Clean Line Energy project.
U.S. Energy Secretary Ernest Moniz praised the project for both its environmental and economic advantages.
“Moving remote and plentiful power to areas where electricity is in high demand is essential for building the grid of the future,” Moniz said a statement. “Building modern transmission that delivers renewable energy to more homes and businesses will create jobs, cut carbon emissions and enhance the reliability of our grid.”
The company has already acquired most of the property rights of way in Tennessee after getting approval last year for the project from the Tennessee Regualtory Authority. In Arkansas and Oklahoma, the company has made selected property purchases so far and plans to acquire the rest of the right-of-ways required for the line n 2017 and 2018, assuming contracts are signed with utilities to buy the power the line will carry.
Clean Line Energy expects to spur about $7 billion of new windmills to be built in Texas and Oklahoma. The company agreed to sell 500 megawatts of wind generation to consumers in Arkansas and deliver another 3,500 megawatts of power to TVA’s western connections in the Memphis area.
TVA could buy some of the power or transmit it to other utilities through its transmssion grid.
Clean Line Energy Partners said it has a $300 million contract with Pelco Structural to manufacture the project’s tubular steel transmission structures. It also has agreements with three Arkansas companies to build other equipment such as transmission conductors and glass insulators.
In its ruling in support of the Clean Line Energy project, DOE said the developers “will need to execute significant firm transmission service agreements and complete key technical studies required by the Southwest Power Pool, Midcontinent Independent System Operator and Tennessee Valley Authority” for the project to move ahead.
Clean Line also must pay 2 percent of project revenues to offset the cost of federal hydropower infrastructure improvements used with its proposed partnership with the Southwestern Power Administration, a federal agency that markets and transmits electricity from hydroelectric dams.
“Protections have been built into the participation agreement to ensure that no liability falls on the ratepayers if the project were ever to fail,” DOE said in its finding last month.
Environmentalists who want TVA to use more renewable energy welcomed the DOE decision to support the wind power line.
“With the Department of Energy’s approval of the Clean Line Plains and Eastern project, the Southeast will have direct access to some of the lowest-cost and highest-quality wind energy resources in the country,” said Dr. Stephen A. Smith, executive director of the Southern Alliance for Clean Energy. “By taking advantage of wind energy, Southeastern utilities can lock-in low pricing for ratepayers and help meet environmental targets for years to come.”
Scott Banbury, the conservation coordinator for the Sierra Club’s Tennessee Chapter, said the Clean Line project “represents a new era in our fight against climate change.” Hurtado said if the Plains and Eastern line is successful, it should help spur many other long-distance, direct-current lines that can carry wind power generated where the wind blows the most to areas where the power is most needed.