The Columbia City Council approved an agreement with Missouri Joint Municipal Electric Utility Commission to purchase wind energy from Kansas-based Iron Star Wind, LLC during its Monday meeting, but the means of receiving the energy — a transmission line that still needs to be constructed — needs the OK from the Public Service Commission.

The Grain Belt Express project is a 780-mile transmission line that will start in southwestern Kansas and cut through Missouri and Illinois, providing energy to those states and Indiana. The direct-current line will go to Hannibal, where a substation will convert the direct current to alternating current, the type of current used by Columbia’s electric system, said John Conway, chairman of the Water and Light board.

Transource states that it meets the nexus test because its requested incentives are narrowly tailored to the significant risks and challenges the Project presents. Transource states that it will face considerable risks and challenges in developing and constructing the Project, such as: (1) financial challenges; (2) regulatory and site control challenges; and (3) risks related to the Designated Entity Agreement (DEA) with PJM.

Moreover, Transource states that it will need to work with individual landowners to acquire the necessary land and easements to construct the 42-mile combined route of the two new 230 kV lines. Transource notes that the required easements are expected to cross approximately 300 parcels, including state game lands owned by the Pennsylvania Game Commission. In addition, Transource does not expect that it will be able to use any existing rights of way (ROW). Transource states that Transource Maryland cannot obtain electric utility status under applicable Maryland law, because it does not serve retail customers and thus will not have the authority to use eminent domain to acquire ROW along the approved route. Transource states that this lack of eminent domain authority presents significant additional risk to the Project development schedule.

Furthermore, Transource states that there is a risk for economic projects such as this because PJM could later find, based on changing conditions, that the Project is no longer needed to relieve congestion. Transource states that this risk is compounded by the long development lead time for the Project.

The Secretary, acting through WAPA or SWPA, or both, may design, develop, construct, operate, maintain, or own, or participate with other entities in designing, developing, constructing, operating, maintaining, or owning, a new electric power transmission facility and related facilities (“Project”) located within any State in which WAPA or SWPA operates...

I am referring to a contract that was just entered into on January 23, 2017, between Infinity and MJMEUC. Because the contract is contingent upon the approval of the Grain Belt Express Project, many of the terms remain confidential, but what I can say is that it is a 20-year term fixed-price contract that provides for the purchase by MJMEUC of a minimum of 100 MW of capacity and energy per year from our Iron Star Wind Project, a maximum purchase of 300 MW per year, and a likely purchase amount of 200 MW per year.

The 400-megawatt Iron Star wind farm near Dodge City is in advanced development and likely will be built this year.

In sum, in the absence transmission certainty,
with regard to both the existence of the physical line and the user fees, wind generation developers, such as Infinity, will not commit capital to develop new generation projects in areas that currently lack such access.

Slane acknowledged, though, he didn’t know about the legal dispute between Minnesota and North Dakota.

Other high-profile projects listed from around the country are entangled in legal and political problems, too.

A proposed high-power transmission line that would deliver wind energy from Oklahoma to several southeastern states is under fire. The federal government approved the line in 2016 despite objections from landowners and the Arkansas Congressional delegation.

Since then, several landowners have sued to stop the line and several members of Congress introduced legislation that would require projects to receive state approval. Officials representing the company believe the line will be approved.

And private investors are not going to build the projects without a return on investment, which might come from tolls for a new road or higher utility rates for an energy project, for example.

Greg DiLoreto with the American Society of Civil Engineers says that difference is important.

“Financing infrastructure is not the funding of infrastructure,” he said. “Financing is access to capital to do that funding, but at the end of the day you have to have cold, hard cash to build these projects that need building…”

The PSC said the two projects are expected to yield more than $1.8 billion of in-state spending. The agency says the projects are estimated to create nearly 9,700 new direct and indirect jobs and contribute $74 million in state tax revenues over 20 years.

The PSC's decision is contingent on approval by the federal government of the developers' site assessment plans, as well as construction and operations plans.

The plan includes a focus on developing port facilities in the Baltimore area and Ocean City. It calls for developers to invest at least $76 million in a steel fabrication plant in Maryland and at least $39.6 million for upgrades at Baltimore County's Tradepoint Atlantic shipyard, formerly Sparrows Point.

Commissioner Michael Richard said the wind farms will "enables us to meet our clean, renewable energy goals using energy generated within the state while conditioning our approval on holding project developers to their promises of creating jobs and spurring economic growth."

Congress should create legislative authority for siting major electricity transmission lines that follows the authority it has already granted to siting major gas lines.

I want to site a new transmission line, but I am struggling to find the best way to work with private landowners who will be affected. Any suggestions?

Look to successful examples from around the country—like Montana Dakota Utilities and Clean Line Energy Partners. And consider new options to bring landowners to the table in a positive way—like Special Purpose Development Corporations or annual payments.

The first principle is to engage landowners early and often. Many utilities have found that holding landowner meetings earlier and more often than required can dramatically improve project efficiency. Innovative ideas include compensating private landowners via Special Purpose Development Corporations (which offer equity in the project’s success) or annual payments (which give landowners a stake in the life of the project). For example, Clean Line Energy Partners is now offering annual payments to landowners who will host a new DC transmission line intended to deliver 3.5 GW of power from Iowa to Chicago.

Of course, eminent domain often becomes an option once a transmission developer demonstrates that a new project is needed and the siting authority confirms that the project will serve the public interest. But cross-state transmission lines and third-party (non-utility) developers cannot always count on eminent domain. Regardless of whether eminent domain is an option, it should always be considered a last resort as there are many options to bring private land-owners to the table in a more positive way that can minimize friction in siting new lines. For example, Montana Dakota Utilities has not had to use eminent domain since 1983, mainly because the utilities consider themselves a part of the community, and have formed positive, trusting relationships with landowners.

For a more detailed treatment of these issues and further options for compensating private landowners, see pages 18-21 of Siting: Finding a Home for Renewable Energy and Transmission.