- Email: [email protected]
State Transmission Infrastructure Authorities: The Story So Far
Kevin Porter is a Vice President with Exeter Associates, a consulting firm based in Columbia, Maryland. He has been active in renewable energy analysis and research since 1984. His scope of work and expertise includes the technical and economic status of renewable energy technologies; design and implementation of state and federal renewable energy policies; transmission access and pricing for renewable energy technologies; and electric power issues in general. He holds a B.S. in Environmental Studies from Lewis & Clark College in Portland, Oregon, and an M.A. in Economics from The American University in Washington, D.C. Sari Fink joined Exeter Associates in 2007 as a staff economist. She worked previously for the British Columbia Ministry of Energy, Mines, and Petroleum Resources, on policies concerning alternative energy, environmental issues in the oil, gas and electricity sectors, and climate change. She holds a B.S. in Economics and Environmental Studies and a M.A. in Economics, both from the University of Victoria in Victoria, British Columbia. This article is based upon a report that was published by the National Renewable Energy Laboratory in Golden, Colorado, and is available at http://www.nrel.gov/docs/fy08osti/ 43146.pdf. The authors thank NREL and the U.S. Department of Energy for their financial support of this work and the state transmission infrastructure authorities for providing information and reviewing early drafts of the NREL report.
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State Transmission Infrastructure Authorities: The Story So Far State transmission infrastructure authorities offer a new tool for helping to overcome such obstacles to developing transmission as high capital investment requirements, uncertain cost allocation among multiple parties, and siting and permitting challenges. Yet to be determined is whether they can help stimulate large, multi-state regional transmission projects. Kevin Porter and Sari Fink
I. Introduction Increasing recognition of the need for more transmission and the desire to access new generating resources has led to more emphasis on transmission planning and development. The Western Governors’ Association’s Clean and Diversified Energy Advisory Committee identified transmission as a critical element in achieving their goal of securing 30 GW of clean energy by 2015.1 The North American Electric Reliability Corporation has stated
that more transmission is needed to ease the strain on the existing transmission system, to make up for past underinvestment in transmission, and to better incorporate renewable energy technologies such as wind energy.2 rowth in development of renewable energy resources and interest in encouraging more renewable energy development is also occurring. Over 8,000 MW of wind came online in the United States in 2008, bringing total U.S.
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installed wind capacity to about 25,000 MW.3 The Geothermal Energy Association reported that nearly 3,000 MW of geothermal capacity was in operation as of August 2008, with almost 4,000 MW in various stages of development.4 The solar energy industry is also growing, with the first large-scale utility solar thermal project in nearly 20 years coming online in Nevada in 2007. Among other solar developments, SunEdison constructed an 8.22 MW solar plant in Alamosa, Colo.; Arizona Public Service announced plans for a 280 MW concentrating solar project near Gila Bend, Ariz., by 2011; and both Pacific Gas & Electric and Southern California Edison have signed contracts for several large solar projects. As of the end of 2008, another 31,200 MW of solar energy projects are in the California Independent System Operator’s interconnection queue.5 ecently, seven states created transmission infrastructure authorities to help facilitate, enable, and perhaps finance new transmission facilities to access new energy resources including renewable energy. In general, these state transmission infrastructure authorities are modeled after state finance or development authorities and are empowered to issue bonds in support of transmission (and, in some cases, generation and distribution) facilities. These state transmission infrastructure authorities do not rely on the full faith and credit of the state in
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issuing bonds. Instead, the bonds issued will likely be revenue bonds that must be secured by a revenue stream from the transmission investment, such as usage charges or lease payments. As a general matter, the bonds are exempt from state taxes, but are still subject to federal taxes. While the focus and main purpose for the creation of these state transmission infrastructure authorities is to advance
infrastructure authorities. We begin by summarizing common characteristics of state transmission infrastructure authorities, go on to discuss some planned transmission projects that state infrastructure authorities are involved with, and then outline some common issues the state transmission infrastructure authorities have faced. The article closes with some recommendations.
Recently, seven states created transmission infrastructure authorities to help facilitate, enable, and perhaps finance new transmission facilities.
II. Characteristics of State Infrastructure Authorities
transmission development, some of them have been granted the ability to pursue generation and/ or distribution projects as well. Most of the state transmission infrastructure authorities have also been given the ability to exercise the power of eminent domain with respect to project siting within their jurisdictions. Nearly all of the state transmission infrastructure authorities were formed to tap into extensive in-state resources such as wind and coal for export to out-of-state load centers. his article examines the status and future direction of state transmission
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Wyoming was the first state to establish a transmission infrastructure authority when the Wyoming Infrastructure Authority (WIA) was created in 2004. The WIA was modeled after the Wyoming Pipeline Authority, which has been successful in facilitating natural gas pipeline development in the state. Other states have followed suit, resulting in the creation of the South Dakota Energy Infrastructure Authority (SDEIA), the North Dakota Transmission Authority (NDTA), the Idaho Energy Resources Authority (IERA), and the Kansas Electric Transmission Authority (KETA) in 2005, and the New Mexico Renewable Energy Transmission Authority (RETA) and the Colorado Clean Energy Development Authority (CEDA) in 2007. As a rule, these states are rich in potential generation resources
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and generally have a desire to develop those resources for export to other states. By national ranking according to wind resource quality, North Dakota is rated 1st, Kansas 3rd, South Dakota 4th, Wyoming 7th, Colorado 11th, New Mexico 12th, and Idaho is rated 13th.6 Except for Colorado and Kansas though, none of the states with state transmission infrastructure authorities are in the top 10 of states with installed wind capacity, suggesting state transmission infrastructure authorities could perhaps help their states unlock wind potential through upgrading or adding transmission.7 A. Bonding authority All of the state transmission infrastructure authorities are created as instrumentalities of the state and can issue revenue bonds. Because the state transmission infrastructure authorities are not agents of the state, these bonds are liabilities of
the authorities only and do not constitute liabilities of the respective states. The state transmission infrastructure authorities in Idaho, New Mexico, Wyoming, and Kansas can issue bonds at their own discretion through resolutions of their boards, although the Kansas Finance Authority issues the bonds on KETA’s behalf. South Dakota requires legislative authorization for SDEIA to issue bonds. Colorado also requires legislative authorization, although CEDA has preauthorized approval to issue up to $40 million in bonds annually for transmission for wind projects and up to $25 million in bonds annually for solar projects. Voter approval of CEDA bonds may be necessary if CEDA is unable to realize sufficient revenues to cover the bond payments, unless the bond payments are secured by a third-party financing agreement, a reserve fund, or by a mortgage on the facilities. NDTA is part of the North Dakota Industrial Commission and bond
issuances are done through the Industrial Commission. ll of the authorities are expected to be financially self-supporting in the long run with revenues arising from the financial returns from completed projects. The authorities have different limits as to the amount of bonds they may issue. WIA has a $1 billion bonding cap for bonds issued for private sector projects, but has no bonding limit for WIAdeveloped facilities. SDEIA has a total bonding cap set at $1 billion and NDTA’s cap is set at $800 million. IERA, KETA, and RETA do not at this time have a cap. CEDA also does not have a cap, but annual bond payments cannot exceed $8 million. Table 1 provides the characteristics of the various state transmission infrastructure authorities.
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B. Project development and ownership Differences exist among the state transmission infrastructure authorities with
Table 1: Characteristics of State Infrastructure Authorities.
CEDA IERA KETA
Issues Revenue
Cap on Bonding
Can Own
Can Operate
Required to
Required to Give
Power of Eminent Domain
Bonds
Amount
Facilities
Facilities
Divest Facilities
Public Notice
Within Their States
U U U*
RETA
U
NDTA SDEIA
U U
WIA
U
U
U U U U U U
^
U
U
#
+
U
U U
U
U
U U
U U
U U
U
U
U
U
U
U U
*
Contracts with Kansas Development Finance Authority for the bonds. Must be leased to another entity. # IERA must partner with a utility or independent power producer, and they can request that IERA divest a facility. ^ Cap only applies to bond issuances for private sector projects, not for WIA’s own projects. +
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respect to the types of projects that are eligible and each authority’s ability to construct, own, and/or operate facilities. KETA, NDTA, and RETA are only allowed to engage in transmission development, although RETA may also finance electricity storage facilities. RETA has a requirement that the transmission projects it gets involved with are expected to derive at least 30 percent of the energy from renewables. CEDA can only engage in clean energy projects but, in addition to transmission, can finance generation, transportation, storage, and equipment manufacturing facilities. CEDA’s scope also includes clean fuel projects such as biodiesel and ethanol, and potentially, clean coal technologies. IERA can develop generation, transmission, or distribution projects, but it must partner with a utility or independent power producer (IPP). WIA and SDEIA can become involved with both generation and transmission; however, both authorities have decided to focus initially on transmission, viewing it as the most pressing issue. tate transmission infrastructure authorities have different restrictions on owning and operating transmission facilities. CEDA is a financing authority only, and cannot own or operate any facilities. NDTA, SDEIA, and WIA can construct, obtain, own, and operate any eligible facilities. However, NDTA and SDEIA are
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required to divest those facilities at the first economically practical opportunity, and WIA has been directed to review, at least every three years, the feasibility of disposing of facilities it holds. RETA can only own facilities as long as they are leased to other entities, although there is no mandatory divestiture requirement. IERA develops facilities on behalf of or in partnership with utilities or IPPs,
State transmission infrastructure authorities have different restrictions on owning and operating transmission facilities.
with the decision on subsequent project operation resting with the utility or IPP. These entities can request that IERA operate the facility on their behalf. KETA is the only authority without limitations or conditions on owning transmission infrastructure facilities and may choose to construct or acquire eligible facilities and own them in perpetuity. KETA is only restricted with respect to operating transmission facilities and must contract out facility operations to a qualified entity. tate transmission infrastructure authorities typically are required to give
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public notice when developing a project, and allow market participants to step in if they wish. KETA, RETA, NDTA, and WIA must all publicly advertise their intent to develop a project and grant other entities the ability to come forward and assume the project. KETA, RETA, and WIA may resume project development if the other entity does not make progress within a set period of time (180 days for KETA and WIA, and 12 months for RETA). NDTA may assess proposals from other market participants and may continue with the project itself if NDTA determines that doing so is in the public interest. CEDA and IERA do not act as independent developers and therefore have no public notice requirement. CEDA’s role is a project financer, and IERA works only in partnership with qualified utilities or IPPs. SDEIA also has no specific notice requirement for projects.
III. Progress to Date Considering that the oldest operating state transmission infrastructure authority is about five years old, that two were established in 2007, and that developing large transmission projects can take several years, it is perhaps too soon to make a full evaluation of the impacts of state transmission infrastructure authorities. Nevertheless, state transmission infrastructure authorities are facilitating some transmission projects.
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KETA has indirectly stimulated at least two proposed highvoltage transmission projects, even though KETA has not issued any bonds to date. The two projects are known as the KETA Project and the Kansas V Plan, and both are located in the windrich plains of Kansas. The KETA project is a 210-mile project from Spearville to the Knoll substation located near Hays, Kan., and then on to the Axtell substation in Nebraska. The Kansas V Plan is a 180-mile project from the Spearville substation to a new Comanche County substation, and then on to the Medicine Lodge substation and then to the Wichita substation. A separate extension from Comanche County to the Woodward substation in Oklahoma is also under consideration. SPP has yet to determine whether the projects will be constructed at 345 kV or 765 kV. ITC Great Plains has received approval from the Kansas Corporation Commission to construct the Kansas portion of the KETA Project and has an application pending to construct the Kansas V Plan. However, Prairie Wind Transmission, a joint venture of Westar and Electric Transmission America (itself a joint venture of subsidiaries of American Electric Power and MidAmerican Energy Holdings Company), has proposed a similar plan and the two are currently engaged in negotiations aimed at reaching a compromise arrangement to combine the proposals. If the parties cannot 34
reach an agreement, the Kansas Corporate Commission will initiate a proceeding that will likely last through the end of 2009. lso, Westar is constructing two transmission lines, a 345 kV line from Wichita north to Salinas, Kansas, and a 345 kV line also originating near Wichita and heading south to Perry, Okla. Phase 1 of the Wichita-to-Salinas line is complete and is in service, with Phase 2 projected for
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KETA has indirectly stimulated at least two proposed high-voltage transmission projects, even though it has not issued any bonds to date.
completion by mid-2010.8 Although KETA has effectively been supplanted in the transmission projects it wanted to sponsor, KETA officials indicate that the transmission activity in Kansas is an early indication of KETA’s success by providing an impetus for transmission to proceed without KETA’s financial or direct involvement. Indeed, KETA officials have stated that KETA will be a success if companies build transmission without KETA being involved at all.9 To date, WIA is the only state transmission infrastructure authority to have issued bonds. In
September 2005, WIA did a private placement of bonds with the Wyoming State Treasurer, amounting to $34.5 million. The proceeds financed three-quarters of the cost of the Hughes Transmission Project, a 130-mile, 230 kV transmission line being constructed by the Basin Electric Power Cooperative of Bismarck, N.D. WIA estimates it will receive about $600,000 in proceeds over 20 years through a loan fee structured into the agreement.10 WIA has several other transmission projects in various stages of development. WIA has partnered with Trans-Elect and the Western Area Power Administration (WAPA) on the Wyoming-Colorado Intertie Transmission project that is aimed at developing a 345 kV transmission line from Wyoming to the Pawnee substation in Colorado. Ultimately, between 800 and 900 MW could be transferred between Wyoming and Colorado. WIA held an open season in 2008, and two wind developers bid for 585 MW of the 800 MW available.11 WIA anticipates selling the rest of the transmission capacity by bilateral contracts and on Nov. 13, 2008, announced it would start accepting applications for the remaining capacity.12 The tentative online date is 2013. WIA was involved in a potentially much larger project, the TransWest Express/Gateway South project. WIA partnered with Arizona Public Service (APS) and National Grid on the TransWest Express project, and
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collectively, the participants planned to invest about $100 million to design and engineer the line and secure necessary permits and route right-of-ways. In August 2007, the partners entered into an interim agreement with PacifiCorp to potentially codevelop the TransWest Express with Gateway South, a proposed transmission line by PacifiCorp that would extend from Wyoming into Utah and into the Desert Southwest. In July 2008, the Anschutz Corporation formed TransWest Express LLC and acquired the rights to the TransWest Express project and as a result, WIA and National Grid are no longer sponsors.13 TransWest Express LLC is moving forward with the project, a 3,000 MW, $3 billion, 800-mile long, 500 kV direct current line from Wyoming to Las Vegas with a planned online date of 2015. National Grid also withdrew from the Gateway South transmission project, leaving PacifiCorp as the sole developer. The proposed Gateway South project is a 500 kV transmission line extending from Wyoming into Utah and Nevada, although the original 3,000 MW size may be reduced to 1,500 MW.14 Both projects have completed their feasibility studies and initiated the review process under the National Environmental Protection Act. IA is also participating with CEDA, RETA, and several utilities on the High Plains Express, a 500 kV transmission line from northeast Wyoming heading south through eastern
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Colorado to New Mexico and Arizona. The initial feasibility study was completed in June 2008, and determined the High Plains Express could consist of two 500 kV lines spanning 1,200 miles with a capacity of 3,000 to 4,000 MW.15 The High Plains Express project could tie in with the Wyoming-Colorado Intertie project, the proposed Eastern
Plains Transmission Project in eastern Colorado, the proposed New Mexico Wind Collector System, and the SunZia transmission project. The feasibility study also indicated that the project has significant benefits and in 2009 the project entered the right-of-way and permitting phase. Assuming these activities can be successfully accomplished, the High Plains Express project could be in operation by 2017.16 Finally, WIA is contemplating a transmission line of up to 500 kV in eastern Wyoming to access Wyoming wind resources. If developed, the transmission line could be part of a larger transmission project to northern California.17
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he other state transmission infrastructure authorities have not been as active as Wyoming and Kansas. NDTA brokered a deal between the Bank of North Dakota and Basin Electric Power Cooperative for $25 million to fund a new transmission line in southwest North Dakota. IERA is exploring potential transmission projects. SDEIA has funded several resource potential and transmission evaluation studies. RETA may finance a $33 million project to upgrade a transmission line to 115 kV, allowing a proposed 100 MW wind project to deliver energy to the Four Corners trading hub.18 CEDA is also considering its first transmission investment, a 230 kV or 345 kV line between Walsenburg and solar resources in the San Luis Valley.19 Tri-State Generation and Transmission Association and Xcel Energy are both collaborating on the project.20
IV. Issues Facing State Infrastructure Authorities To date, state transmission infrastructure authorities have assumed various elements of two roles: (1) a promoter of transmission projects, and (2) a participant in the planning, development, and financing of transmission projects. State transmission infrastructure authorities have also served as early-stage transmission incubators by preparing state
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maps of potential energy resources, identifying transmissions projects to access those resources, and shepherding transmission projects through the early planning and development stages. State transmission infrastructure authorities may also have powers with respect to siting that other industry entities may lack. They can establish transmission corridors, adopt, amend, or repeal bylaws, and most have been granted the power of eminent domain within their respective states for project siting purposes. ransmission planning and development is a complex process involving many pieces and players. Some state transmission infrastructure authorities have hired outside experts to help map the energy resource potential in their respective states, examine transmission system constraints, and offer recommendations on improvements. SDEIA, for example, has conducted several studies on the transmission grid in South Dakota and options for developing coal, wind, and nuclear plants, and exporting the power to other states. KETA spent most of its first year learning about transmission planning and development issues. In addition, transmission planning and development can be timeconsuming and costly. Some state transmission infrastructure authorities have focused on creating public-private partnerships to help fund these efforts.
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unding has been a limiting factor for some state transmission infrastructure authorities. WIA has been well funded, with a $1.7 million operating budget for 2009 and 2010, giving it the ability to support three full-time staff members, and a $5 million contingency fund for project development.21 KETA has also
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been well supported, with operational funds totaling $127,000 for 2008 and 2009 and a $1 million contingency fund.22 RETA received $1 million in startup funding for 2007 and 2008.23 SDEIA has received a total of $303,000 in funding, and NDTA is part of the North Dakota Industrial Commission and therefore, works under its budget. IERA and CEDA have had the most difficulty with respect to funding. IERA did not receive any funding from the legislature, but did obtain $50,000 from the Idaho Consumer-Owned Utilities Association to assist with startup operations.24 The state of Colorado has a constitutional provision that caps growth in
government spending at the level of inflation, largely preventing the legislature from providing any funding to CEDA. Some funding is being provided to CEDA by the Colorado Clean Energy Fund, which is part of the existing Governor’s Energy Office that facilitates clean energy development in the state. These funding issues have limited some of the state transmission infrastructure authorities’ abilities to hire staff, conduct feasibility studies, sponsor larger but riskier transmission projects, and participate in regional transmission planning initiatives. State transmission infrastructure authorities with little or no funding have focused on shortterm transmission projects that can be put in place quickly and generate some revenue. While this may generate immediate results, not having operational funding makes it difficult for a state infrastructure authority to participate in any larger project feasibility studies or regional transmission planning activities, at least initially. These funding differences have resulted in state transmission infrastructure authorities choosing to focus their efforts in different ways. WIA has formed partnerships with electric utilities and transmission developers to explore development of large, multi-state transmission projects. KETA has taken on the role of project catalyst, pushing projects forward and then bowing out when private entities express
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interest and assume control of the projects. SDEIA has focused on identifying and cataloguing development opportunities in South Dakota. NDTA prefers to act as a facilitator, brokering deals between developers and financers. ne issue that unites the state transmission infrastructure authorities is their desire to have the bonds they issue exempt from federal taxes. If achieved, such an exemption would allow state transmission infrastructure authorities to offer bonds at a lower interest rate. WIA has financially supported federal lobbying efforts for such a federal tax exemption, but unsuccessfully to date.
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some cases, generation, distribution, manufacturing, and transportation projects. State transmission infrastructure authorities have brought a focus to transmission that has been either absent or has not been sustained over time. Since all of the state transmission infrastructure authorities are less than five years
V. Conclusion and Recommendations Although investments in transmission are increasing, transmission investment has lagged behind growth in electric demand for many years. Several well-known and well-discussed obstacles affect transmission development, from high capital investment requirements, uncertain cost allocation among multiple parties, and siting and permitting challenges. State transmission infrastructure authorities are potentially a new tool for helping to develop transmission. These authorities are authorized to issue revenue bonds to support investments in, and sometimes ownership in, transmission projects, and in
old, and transmission development can take years, it is perhaps not surprising that they are still evolving. So far, only one state—Wyoming—has issued bonds for a transmission line, although Colorado and New Mexico may also issue bonds for transmission projects. However, Kansas and North Dakota have also had success in encouraging new transmission without issuing bonds. In the case of Kansas, KETA, which can own (but not operate) transmission, appears to have used that potential threat as a means of cajoling private entities to sponsor several new transmission projects, the first to be built in the state in decades. Wyoming sponsored an open
season for the WyomingColorado transmission line in 2008, with 565 of the available 800 MW successfully subscribed. Yet to be determined is whether state transmission infrastructure authorities can help stimulate large, multi-state regional transmission projects that could result in thousands of megawatts of new transmission capacity. Wyoming has entered into joint development agreements for two such projects, the TransWest Express and the Gateway South projects. Although just established in 2007, the Colorado and (potentially) New Mexico authorities plan to participate in the High Plains Express project, and at least in the case of New Mexico, that state’s authority has expressed desires to build transmission to export renewable resources from New Mexico to surrounding states. Should states contemplate creating a transmission infrastructure authority, they may wish to consider the following: Funding: Although other factors undoubtedly come into play, it is perhaps no accident that two of the more active state transmission infrastructure authorities (Kansas and Wyoming) are among the better funded. Adequate funding for both operating costs and for contingencies allows state transmission infrastructure authorities to hire sufficient staff, to invest in early-stage feasibility studies and plans, and to build support for large-scale transmission projects. Other states, notably Idaho, have minimal funding and rely on
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consultants acting on a ‘‘success fee’’ basis. Making that approach work places more emphasis on the short-term and more immediate transmission projects to generate cash flow, and does not necessarily allow participation in regional planning initiatives or in largescale, multi-state transmission projects that may take several years to develop, if they are developed at all. Independence: Two state transmission infrastructure authorities— Colorado and South Dakota— require legislative approval before they can issue bonds. While legislative oversight is clearly necessary, requiring legislative approval for state transmission infrastructure authority bonds may introduce uncertainty into the planning and financing of these bonds and ultimately slow or even stymie the transmission projects that are to be supported. To the extent feasible, states contemplating the establishment of state transmission infrastructure authorities may wish to consider traditional legislative oversight rather than requiring approval of each proposed state transmission infrastructure authority bond. Start Small but Think Big: Planning and developing large-scale transmission projects is complex and involves multiple market participants working on complicated technical and economic issues. Planning and putting in place a small transmission project initially allows state transmission infrastructure authorities to test the market for issuing revenue bonds and to become familiar 38
with market participants in their state and region. But since a major driver for creating most state transmission infrastructure authorities is to create economic development by exporting energy (primarily coal and wind) to load centers that may be several hundred miles away, state transmission infrastructure authorities should also pursue large-scale,
authorities to divest transmission assets as soon as economically practicable. WIA, KETA, RETA, and IERA are allowed to own (with conditions) transmission facilities over the long term, and although other factors are certainly involved, the implicit threat of competition for transmission facilities appears to have helped stimulate several new transmission projects in Kansas. Allowing other entities to assume project development within a defined time period after a state transmission infrastructure authority announces interest in developing a transmission project may help mitigate concerns about unfair competition or market interference by government entities.& Endnotes:
multi-state transmission projects. Consider Financial Partnership with Other Entities: WIA has established partnerships with National Grid, the Anschutz Corporation, Trans-Elect, and several electric utilities to leverage both financial clout and technical expertise in pursuing large-scale, multi-state transmission projects. Such partnerships help minimize the financial strain of large-scale transmission projects and also have the benefit of building market participant support for largescale transmission projects as well. Consider Allowing Ownership of Transmission Facilities: Some state laws creating transmission infrastructure authorities require the
1. Western Governors’ Association, Clean Energy, A Strong Economy and A Healthy Environment, Report of the Clean and Diversified Energy Advisory Committee to the Western Governors’ Association, June 2006. 2. North American Electric Reliability Corporation, 2008 Long-Term Reliability Assessment, Oct. 2008, at http://www.nerc.com/files/ LTRA2008.pdf. 3. American Wind Energy Association, Wind Energy Grows by Record 8,300 MW in 2008, Press Release, Jan. 27, 2009, at http://www. awea.org/newsroom/releases/wind_ energy_growth2008_27Jan09.html. 4. Geothermal Energy Association, U.S. Geothermal Power Production and Development Update, Aug. 2008, at http://www.geo-energy.org/ publications/reports/Geothermal_ Update_August_7_2008_FINAL.pdf. 5. Internal estimate prepared by Exeter Associates. The California ISO
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interconnection queue can be viewed at http://www.caiso.com/14e9/ 14e9ddda1ebf0.pdf. 6. Wind Energy Fact Sheet, Wind Energy: An Untapped Resource, American Wind Energy Association Web site at http://www.awea.org/ pubs/factsheets/Wind_Energy_ An_Untapped_Resource.pdf. 7. American Wind Energy Association, U.S. Wind Energy Projects, at http://www.awea.org/projects/. 8. Westar Energy, Transmission Projects, at http://www. westarenergy.com/corp_com/ contentmgt.nsf/publishedpages/ transmission.
12. Wyoming-Colorado Intertie Transmission Project Announcements Web page, Nov. 13, 2008, at http://www.wyia.org/wci/ announcements.html. 13. TransWest Express Project, Presentation by David F. Smith to WestConnect Annual Planning Workshop, Nov. 14, 2008, TransWest Express LLC, at http://www. westconnect.com/filestorage/ 20081113%20TWE%20WestConnect% 20APW.ppt. 14. Wyoming Infrastructure Authority Transmission Projects Web page, at http://www.wyia.org/projects.htm. 15. High Plains Express Transmission Project Feasibility Study Report, June 2008, at http://www.rmao.com/ wtpp/HPX_Studies.html.
9. Presentation of the Hon. Carl Holmes to the National Wind Coordinating Collaborative’s Southwest Power Pool Workshop, Dallas, Aug. 22, 2007.
16. Id.
10. Wyoming-Colorado Intertie Transmission Project Web site, at http://www.wyia.org/wci/index. html. 11. Wyoming Infrastructure Authority, Open Season a Success for Wyoming-Colorado Intertie, Aug. 26, 2008, at http://www.wapa.gov/ newsroom/pdf/WCIOpenSeason Outcome82608.pdf.
17. Loyd Drain, Wyoming Infrastructure Authority: Pioneering Power Transmission in the West, Presentation before Southeast Wyoming RCBD Council, Nov. 6, 2008, Wheatland, Wyo., at http://www.wyiaorg/projects.htm. 18. New Mexico Transmission Authority Plans $33 Million Investment to Connect Wind Farm, ELEC. UTIL. WEEK, Oct. 13, 2008, at 24.
19. Colorado Clean Energy Development Authority, Minutes of April 23, 2008, Board meeting. 20. Public Service Company of Colorado, Senate Bill 07-100, Designation of Energy Resource Zones at Transmission Planning Informational Report, Nov. 23, 2008. 21. Wyoming Infrastructure Authority, State of Wyoming 2009-2010 Biennium Budget Request, Wyoming Infrastructure Authority Web site, at http://www.wyia.org/Docs/Budget Spending/WIA%20Budget% 20Request%20FY%2009%2010.pdf. 22. Kansas Electric Transmission Authority, 2008 Annual Report to the Governor and the Legislature, Jan. 12, 2009, at http://www.kansas.gov/ keta/Reports/2008_Annual% 20Report%20final_signed.pdf. 23. New Mexico Renewable Energy Transmission Authority, Fact Sheet on the Renewable Energy Transmission Authority. 24. Idaho Energy Resources Authority, Minutes of the Idaho Energy Resources Authority Directors’ Meeting – Boise, Idaho, Oct. 26, 2005, at http://www.iera.info/pdf/ minutes_10_26_05.pdf.
States may wish to consider traditional legislative oversight.
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State Transmission Infrastructure Authorities: The Story So Far State transmission infrastructure authorities offer a new tool for helping to overcome such obstacles to developing transmission as high capital investment requirements, uncertain cost allocation among multiple parties, and siting and permitting challenges. Yet to be determined is whether they can help stimulate large, multi-state regional transmission projects. Kevin Porter and Sari Fink
I. Introduction Increasing recognition of the need for more transmission and the desire to access new generating resources has led to more emphasis on transmission planning and development. The Western Governors’ Association’s Clean and Diversified Energy Advisory Committee identified transmission as a critical element in achieving their goal of securing 30 GW of clean energy by 2015.1 The North American Electric Reliability Corporation has stated
that more transmission is needed to ease the strain on the existing transmission system, to make up for past underinvestment in transmission, and to better incorporate renewable energy technologies such as wind energy.2 rowth in development of renewable energy resources and interest in encouraging more renewable energy development is also occurring. Over 8,000 MW of wind came online in the United States in 2008, bringing total U.S.
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installed wind capacity to about 25,000 MW.3 The Geothermal Energy Association reported that nearly 3,000 MW of geothermal capacity was in operation as of August 2008, with almost 4,000 MW in various stages of development.4 The solar energy industry is also growing, with the first large-scale utility solar thermal project in nearly 20 years coming online in Nevada in 2007. Among other solar developments, SunEdison constructed an 8.22 MW solar plant in Alamosa, Colo.; Arizona Public Service announced plans for a 280 MW concentrating solar project near Gila Bend, Ariz., by 2011; and both Pacific Gas & Electric and Southern California Edison have signed contracts for several large solar projects. As of the end of 2008, another 31,200 MW of solar energy projects are in the California Independent System Operator’s interconnection queue.5 ecently, seven states created transmission infrastructure authorities to help facilitate, enable, and perhaps finance new transmission facilities to access new energy resources including renewable energy. In general, these state transmission infrastructure authorities are modeled after state finance or development authorities and are empowered to issue bonds in support of transmission (and, in some cases, generation and distribution) facilities. These state transmission infrastructure authorities do not rely on the full faith and credit of the state in
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issuing bonds. Instead, the bonds issued will likely be revenue bonds that must be secured by a revenue stream from the transmission investment, such as usage charges or lease payments. As a general matter, the bonds are exempt from state taxes, but are still subject to federal taxes. While the focus and main purpose for the creation of these state transmission infrastructure authorities is to advance
infrastructure authorities. We begin by summarizing common characteristics of state transmission infrastructure authorities, go on to discuss some planned transmission projects that state infrastructure authorities are involved with, and then outline some common issues the state transmission infrastructure authorities have faced. The article closes with some recommendations.
Recently, seven states created transmission infrastructure authorities to help facilitate, enable, and perhaps finance new transmission facilities.
II. Characteristics of State Infrastructure Authorities
transmission development, some of them have been granted the ability to pursue generation and/ or distribution projects as well. Most of the state transmission infrastructure authorities have also been given the ability to exercise the power of eminent domain with respect to project siting within their jurisdictions. Nearly all of the state transmission infrastructure authorities were formed to tap into extensive in-state resources such as wind and coal for export to out-of-state load centers. his article examines the status and future direction of state transmission
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Wyoming was the first state to establish a transmission infrastructure authority when the Wyoming Infrastructure Authority (WIA) was created in 2004. The WIA was modeled after the Wyoming Pipeline Authority, which has been successful in facilitating natural gas pipeline development in the state. Other states have followed suit, resulting in the creation of the South Dakota Energy Infrastructure Authority (SDEIA), the North Dakota Transmission Authority (NDTA), the Idaho Energy Resources Authority (IERA), and the Kansas Electric Transmission Authority (KETA) in 2005, and the New Mexico Renewable Energy Transmission Authority (RETA) and the Colorado Clean Energy Development Authority (CEDA) in 2007. As a rule, these states are rich in potential generation resources
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and generally have a desire to develop those resources for export to other states. By national ranking according to wind resource quality, North Dakota is rated 1st, Kansas 3rd, South Dakota 4th, Wyoming 7th, Colorado 11th, New Mexico 12th, and Idaho is rated 13th.6 Except for Colorado and Kansas though, none of the states with state transmission infrastructure authorities are in the top 10 of states with installed wind capacity, suggesting state transmission infrastructure authorities could perhaps help their states unlock wind potential through upgrading or adding transmission.7 A. Bonding authority All of the state transmission infrastructure authorities are created as instrumentalities of the state and can issue revenue bonds. Because the state transmission infrastructure authorities are not agents of the state, these bonds are liabilities of
the authorities only and do not constitute liabilities of the respective states. The state transmission infrastructure authorities in Idaho, New Mexico, Wyoming, and Kansas can issue bonds at their own discretion through resolutions of their boards, although the Kansas Finance Authority issues the bonds on KETA’s behalf. South Dakota requires legislative authorization for SDEIA to issue bonds. Colorado also requires legislative authorization, although CEDA has preauthorized approval to issue up to $40 million in bonds annually for transmission for wind projects and up to $25 million in bonds annually for solar projects. Voter approval of CEDA bonds may be necessary if CEDA is unable to realize sufficient revenues to cover the bond payments, unless the bond payments are secured by a third-party financing agreement, a reserve fund, or by a mortgage on the facilities. NDTA is part of the North Dakota Industrial Commission and bond
issuances are done through the Industrial Commission. ll of the authorities are expected to be financially self-supporting in the long run with revenues arising from the financial returns from completed projects. The authorities have different limits as to the amount of bonds they may issue. WIA has a $1 billion bonding cap for bonds issued for private sector projects, but has no bonding limit for WIAdeveloped facilities. SDEIA has a total bonding cap set at $1 billion and NDTA’s cap is set at $800 million. IERA, KETA, and RETA do not at this time have a cap. CEDA also does not have a cap, but annual bond payments cannot exceed $8 million. Table 1 provides the characteristics of the various state transmission infrastructure authorities.
A
B. Project development and ownership Differences exist among the state transmission infrastructure authorities with
Table 1: Characteristics of State Infrastructure Authorities.
CEDA IERA KETA
Issues Revenue
Cap on Bonding
Can Own
Can Operate
Required to
Required to Give
Power of Eminent Domain
Bonds
Amount
Facilities
Facilities
Divest Facilities
Public Notice
Within Their States
U U U*
RETA
U
NDTA SDEIA
U U
WIA
U
U
U U U U U U
^
U
U
#
+
U
U U
U
U
U U
U U
U U
U
U
U
U
U
U U
*
Contracts with Kansas Development Finance Authority for the bonds. Must be leased to another entity. # IERA must partner with a utility or independent power producer, and they can request that IERA divest a facility. ^ Cap only applies to bond issuances for private sector projects, not for WIA’s own projects. +
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respect to the types of projects that are eligible and each authority’s ability to construct, own, and/or operate facilities. KETA, NDTA, and RETA are only allowed to engage in transmission development, although RETA may also finance electricity storage facilities. RETA has a requirement that the transmission projects it gets involved with are expected to derive at least 30 percent of the energy from renewables. CEDA can only engage in clean energy projects but, in addition to transmission, can finance generation, transportation, storage, and equipment manufacturing facilities. CEDA’s scope also includes clean fuel projects such as biodiesel and ethanol, and potentially, clean coal technologies. IERA can develop generation, transmission, or distribution projects, but it must partner with a utility or independent power producer (IPP). WIA and SDEIA can become involved with both generation and transmission; however, both authorities have decided to focus initially on transmission, viewing it as the most pressing issue. tate transmission infrastructure authorities have different restrictions on owning and operating transmission facilities. CEDA is a financing authority only, and cannot own or operate any facilities. NDTA, SDEIA, and WIA can construct, obtain, own, and operate any eligible facilities. However, NDTA and SDEIA are
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required to divest those facilities at the first economically practical opportunity, and WIA has been directed to review, at least every three years, the feasibility of disposing of facilities it holds. RETA can only own facilities as long as they are leased to other entities, although there is no mandatory divestiture requirement. IERA develops facilities on behalf of or in partnership with utilities or IPPs,
State transmission infrastructure authorities have different restrictions on owning and operating transmission facilities.
with the decision on subsequent project operation resting with the utility or IPP. These entities can request that IERA operate the facility on their behalf. KETA is the only authority without limitations or conditions on owning transmission infrastructure facilities and may choose to construct or acquire eligible facilities and own them in perpetuity. KETA is only restricted with respect to operating transmission facilities and must contract out facility operations to a qualified entity. tate transmission infrastructure authorities typically are required to give
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public notice when developing a project, and allow market participants to step in if they wish. KETA, RETA, NDTA, and WIA must all publicly advertise their intent to develop a project and grant other entities the ability to come forward and assume the project. KETA, RETA, and WIA may resume project development if the other entity does not make progress within a set period of time (180 days for KETA and WIA, and 12 months for RETA). NDTA may assess proposals from other market participants and may continue with the project itself if NDTA determines that doing so is in the public interest. CEDA and IERA do not act as independent developers and therefore have no public notice requirement. CEDA’s role is a project financer, and IERA works only in partnership with qualified utilities or IPPs. SDEIA also has no specific notice requirement for projects.
III. Progress to Date Considering that the oldest operating state transmission infrastructure authority is about five years old, that two were established in 2007, and that developing large transmission projects can take several years, it is perhaps too soon to make a full evaluation of the impacts of state transmission infrastructure authorities. Nevertheless, state transmission infrastructure authorities are facilitating some transmission projects.
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KETA has indirectly stimulated at least two proposed highvoltage transmission projects, even though KETA has not issued any bonds to date. The two projects are known as the KETA Project and the Kansas V Plan, and both are located in the windrich plains of Kansas. The KETA project is a 210-mile project from Spearville to the Knoll substation located near Hays, Kan., and then on to the Axtell substation in Nebraska. The Kansas V Plan is a 180-mile project from the Spearville substation to a new Comanche County substation, and then on to the Medicine Lodge substation and then to the Wichita substation. A separate extension from Comanche County to the Woodward substation in Oklahoma is also under consideration. SPP has yet to determine whether the projects will be constructed at 345 kV or 765 kV. ITC Great Plains has received approval from the Kansas Corporation Commission to construct the Kansas portion of the KETA Project and has an application pending to construct the Kansas V Plan. However, Prairie Wind Transmission, a joint venture of Westar and Electric Transmission America (itself a joint venture of subsidiaries of American Electric Power and MidAmerican Energy Holdings Company), has proposed a similar plan and the two are currently engaged in negotiations aimed at reaching a compromise arrangement to combine the proposals. If the parties cannot 34
reach an agreement, the Kansas Corporate Commission will initiate a proceeding that will likely last through the end of 2009. lso, Westar is constructing two transmission lines, a 345 kV line from Wichita north to Salinas, Kansas, and a 345 kV line also originating near Wichita and heading south to Perry, Okla. Phase 1 of the Wichita-to-Salinas line is complete and is in service, with Phase 2 projected for
A
KETA has indirectly stimulated at least two proposed high-voltage transmission projects, even though it has not issued any bonds to date.
completion by mid-2010.8 Although KETA has effectively been supplanted in the transmission projects it wanted to sponsor, KETA officials indicate that the transmission activity in Kansas is an early indication of KETA’s success by providing an impetus for transmission to proceed without KETA’s financial or direct involvement. Indeed, KETA officials have stated that KETA will be a success if companies build transmission without KETA being involved at all.9 To date, WIA is the only state transmission infrastructure authority to have issued bonds. In
September 2005, WIA did a private placement of bonds with the Wyoming State Treasurer, amounting to $34.5 million. The proceeds financed three-quarters of the cost of the Hughes Transmission Project, a 130-mile, 230 kV transmission line being constructed by the Basin Electric Power Cooperative of Bismarck, N.D. WIA estimates it will receive about $600,000 in proceeds over 20 years through a loan fee structured into the agreement.10 WIA has several other transmission projects in various stages of development. WIA has partnered with Trans-Elect and the Western Area Power Administration (WAPA) on the Wyoming-Colorado Intertie Transmission project that is aimed at developing a 345 kV transmission line from Wyoming to the Pawnee substation in Colorado. Ultimately, between 800 and 900 MW could be transferred between Wyoming and Colorado. WIA held an open season in 2008, and two wind developers bid for 585 MW of the 800 MW available.11 WIA anticipates selling the rest of the transmission capacity by bilateral contracts and on Nov. 13, 2008, announced it would start accepting applications for the remaining capacity.12 The tentative online date is 2013. WIA was involved in a potentially much larger project, the TransWest Express/Gateway South project. WIA partnered with Arizona Public Service (APS) and National Grid on the TransWest Express project, and
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collectively, the participants planned to invest about $100 million to design and engineer the line and secure necessary permits and route right-of-ways. In August 2007, the partners entered into an interim agreement with PacifiCorp to potentially codevelop the TransWest Express with Gateway South, a proposed transmission line by PacifiCorp that would extend from Wyoming into Utah and into the Desert Southwest. In July 2008, the Anschutz Corporation formed TransWest Express LLC and acquired the rights to the TransWest Express project and as a result, WIA and National Grid are no longer sponsors.13 TransWest Express LLC is moving forward with the project, a 3,000 MW, $3 billion, 800-mile long, 500 kV direct current line from Wyoming to Las Vegas with a planned online date of 2015. National Grid also withdrew from the Gateway South transmission project, leaving PacifiCorp as the sole developer. The proposed Gateway South project is a 500 kV transmission line extending from Wyoming into Utah and Nevada, although the original 3,000 MW size may be reduced to 1,500 MW.14 Both projects have completed their feasibility studies and initiated the review process under the National Environmental Protection Act. IA is also participating with CEDA, RETA, and several utilities on the High Plains Express, a 500 kV transmission line from northeast Wyoming heading south through eastern
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Colorado to New Mexico and Arizona. The initial feasibility study was completed in June 2008, and determined the High Plains Express could consist of two 500 kV lines spanning 1,200 miles with a capacity of 3,000 to 4,000 MW.15 The High Plains Express project could tie in with the Wyoming-Colorado Intertie project, the proposed Eastern
Plains Transmission Project in eastern Colorado, the proposed New Mexico Wind Collector System, and the SunZia transmission project. The feasibility study also indicated that the project has significant benefits and in 2009 the project entered the right-of-way and permitting phase. Assuming these activities can be successfully accomplished, the High Plains Express project could be in operation by 2017.16 Finally, WIA is contemplating a transmission line of up to 500 kV in eastern Wyoming to access Wyoming wind resources. If developed, the transmission line could be part of a larger transmission project to northern California.17
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he other state transmission infrastructure authorities have not been as active as Wyoming and Kansas. NDTA brokered a deal between the Bank of North Dakota and Basin Electric Power Cooperative for $25 million to fund a new transmission line in southwest North Dakota. IERA is exploring potential transmission projects. SDEIA has funded several resource potential and transmission evaluation studies. RETA may finance a $33 million project to upgrade a transmission line to 115 kV, allowing a proposed 100 MW wind project to deliver energy to the Four Corners trading hub.18 CEDA is also considering its first transmission investment, a 230 kV or 345 kV line between Walsenburg and solar resources in the San Luis Valley.19 Tri-State Generation and Transmission Association and Xcel Energy are both collaborating on the project.20
IV. Issues Facing State Infrastructure Authorities To date, state transmission infrastructure authorities have assumed various elements of two roles: (1) a promoter of transmission projects, and (2) a participant in the planning, development, and financing of transmission projects. State transmission infrastructure authorities have also served as early-stage transmission incubators by preparing state
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maps of potential energy resources, identifying transmissions projects to access those resources, and shepherding transmission projects through the early planning and development stages. State transmission infrastructure authorities may also have powers with respect to siting that other industry entities may lack. They can establish transmission corridors, adopt, amend, or repeal bylaws, and most have been granted the power of eminent domain within their respective states for project siting purposes. ransmission planning and development is a complex process involving many pieces and players. Some state transmission infrastructure authorities have hired outside experts to help map the energy resource potential in their respective states, examine transmission system constraints, and offer recommendations on improvements. SDEIA, for example, has conducted several studies on the transmission grid in South Dakota and options for developing coal, wind, and nuclear plants, and exporting the power to other states. KETA spent most of its first year learning about transmission planning and development issues. In addition, transmission planning and development can be timeconsuming and costly. Some state transmission infrastructure authorities have focused on creating public-private partnerships to help fund these efforts.
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unding has been a limiting factor for some state transmission infrastructure authorities. WIA has been well funded, with a $1.7 million operating budget for 2009 and 2010, giving it the ability to support three full-time staff members, and a $5 million contingency fund for project development.21 KETA has also
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been well supported, with operational funds totaling $127,000 for 2008 and 2009 and a $1 million contingency fund.22 RETA received $1 million in startup funding for 2007 and 2008.23 SDEIA has received a total of $303,000 in funding, and NDTA is part of the North Dakota Industrial Commission and therefore, works under its budget. IERA and CEDA have had the most difficulty with respect to funding. IERA did not receive any funding from the legislature, but did obtain $50,000 from the Idaho Consumer-Owned Utilities Association to assist with startup operations.24 The state of Colorado has a constitutional provision that caps growth in
government spending at the level of inflation, largely preventing the legislature from providing any funding to CEDA. Some funding is being provided to CEDA by the Colorado Clean Energy Fund, which is part of the existing Governor’s Energy Office that facilitates clean energy development in the state. These funding issues have limited some of the state transmission infrastructure authorities’ abilities to hire staff, conduct feasibility studies, sponsor larger but riskier transmission projects, and participate in regional transmission planning initiatives. State transmission infrastructure authorities with little or no funding have focused on shortterm transmission projects that can be put in place quickly and generate some revenue. While this may generate immediate results, not having operational funding makes it difficult for a state infrastructure authority to participate in any larger project feasibility studies or regional transmission planning activities, at least initially. These funding differences have resulted in state transmission infrastructure authorities choosing to focus their efforts in different ways. WIA has formed partnerships with electric utilities and transmission developers to explore development of large, multi-state transmission projects. KETA has taken on the role of project catalyst, pushing projects forward and then bowing out when private entities express
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interest and assume control of the projects. SDEIA has focused on identifying and cataloguing development opportunities in South Dakota. NDTA prefers to act as a facilitator, brokering deals between developers and financers. ne issue that unites the state transmission infrastructure authorities is their desire to have the bonds they issue exempt from federal taxes. If achieved, such an exemption would allow state transmission infrastructure authorities to offer bonds at a lower interest rate. WIA has financially supported federal lobbying efforts for such a federal tax exemption, but unsuccessfully to date.
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some cases, generation, distribution, manufacturing, and transportation projects. State transmission infrastructure authorities have brought a focus to transmission that has been either absent or has not been sustained over time. Since all of the state transmission infrastructure authorities are less than five years
V. Conclusion and Recommendations Although investments in transmission are increasing, transmission investment has lagged behind growth in electric demand for many years. Several well-known and well-discussed obstacles affect transmission development, from high capital investment requirements, uncertain cost allocation among multiple parties, and siting and permitting challenges. State transmission infrastructure authorities are potentially a new tool for helping to develop transmission. These authorities are authorized to issue revenue bonds to support investments in, and sometimes ownership in, transmission projects, and in
old, and transmission development can take years, it is perhaps not surprising that they are still evolving. So far, only one state—Wyoming—has issued bonds for a transmission line, although Colorado and New Mexico may also issue bonds for transmission projects. However, Kansas and North Dakota have also had success in encouraging new transmission without issuing bonds. In the case of Kansas, KETA, which can own (but not operate) transmission, appears to have used that potential threat as a means of cajoling private entities to sponsor several new transmission projects, the first to be built in the state in decades. Wyoming sponsored an open
season for the WyomingColorado transmission line in 2008, with 565 of the available 800 MW successfully subscribed. Yet to be determined is whether state transmission infrastructure authorities can help stimulate large, multi-state regional transmission projects that could result in thousands of megawatts of new transmission capacity. Wyoming has entered into joint development agreements for two such projects, the TransWest Express and the Gateway South projects. Although just established in 2007, the Colorado and (potentially) New Mexico authorities plan to participate in the High Plains Express project, and at least in the case of New Mexico, that state’s authority has expressed desires to build transmission to export renewable resources from New Mexico to surrounding states. Should states contemplate creating a transmission infrastructure authority, they may wish to consider the following: Funding: Although other factors undoubtedly come into play, it is perhaps no accident that two of the more active state transmission infrastructure authorities (Kansas and Wyoming) are among the better funded. Adequate funding for both operating costs and for contingencies allows state transmission infrastructure authorities to hire sufficient staff, to invest in early-stage feasibility studies and plans, and to build support for large-scale transmission projects. Other states, notably Idaho, have minimal funding and rely on
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consultants acting on a ‘‘success fee’’ basis. Making that approach work places more emphasis on the short-term and more immediate transmission projects to generate cash flow, and does not necessarily allow participation in regional planning initiatives or in largescale, multi-state transmission projects that may take several years to develop, if they are developed at all. Independence: Two state transmission infrastructure authorities— Colorado and South Dakota— require legislative approval before they can issue bonds. While legislative oversight is clearly necessary, requiring legislative approval for state transmission infrastructure authority bonds may introduce uncertainty into the planning and financing of these bonds and ultimately slow or even stymie the transmission projects that are to be supported. To the extent feasible, states contemplating the establishment of state transmission infrastructure authorities may wish to consider traditional legislative oversight rather than requiring approval of each proposed state transmission infrastructure authority bond. Start Small but Think Big: Planning and developing large-scale transmission projects is complex and involves multiple market participants working on complicated technical and economic issues. Planning and putting in place a small transmission project initially allows state transmission infrastructure authorities to test the market for issuing revenue bonds and to become familiar 38
with market participants in their state and region. But since a major driver for creating most state transmission infrastructure authorities is to create economic development by exporting energy (primarily coal and wind) to load centers that may be several hundred miles away, state transmission infrastructure authorities should also pursue large-scale,
authorities to divest transmission assets as soon as economically practicable. WIA, KETA, RETA, and IERA are allowed to own (with conditions) transmission facilities over the long term, and although other factors are certainly involved, the implicit threat of competition for transmission facilities appears to have helped stimulate several new transmission projects in Kansas. Allowing other entities to assume project development within a defined time period after a state transmission infrastructure authority announces interest in developing a transmission project may help mitigate concerns about unfair competition or market interference by government entities.& Endnotes:
multi-state transmission projects. Consider Financial Partnership with Other Entities: WIA has established partnerships with National Grid, the Anschutz Corporation, Trans-Elect, and several electric utilities to leverage both financial clout and technical expertise in pursuing large-scale, multi-state transmission projects. Such partnerships help minimize the financial strain of large-scale transmission projects and also have the benefit of building market participant support for largescale transmission projects as well. Consider Allowing Ownership of Transmission Facilities: Some state laws creating transmission infrastructure authorities require the
1. Western Governors’ Association, Clean Energy, A Strong Economy and A Healthy Environment, Report of the Clean and Diversified Energy Advisory Committee to the Western Governors’ Association, June 2006. 2. North American Electric Reliability Corporation, 2008 Long-Term Reliability Assessment, Oct. 2008, at http://www.nerc.com/files/ LTRA2008.pdf. 3. American Wind Energy Association, Wind Energy Grows by Record 8,300 MW in 2008, Press Release, Jan. 27, 2009, at http://www. awea.org/newsroom/releases/wind_ energy_growth2008_27Jan09.html. 4. Geothermal Energy Association, U.S. Geothermal Power Production and Development Update, Aug. 2008, at http://www.geo-energy.org/ publications/reports/Geothermal_ Update_August_7_2008_FINAL.pdf. 5. Internal estimate prepared by Exeter Associates. The California ISO
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interconnection queue can be viewed at http://www.caiso.com/14e9/ 14e9ddda1ebf0.pdf. 6. Wind Energy Fact Sheet, Wind Energy: An Untapped Resource, American Wind Energy Association Web site at http://www.awea.org/ pubs/factsheets/Wind_Energy_ An_Untapped_Resource.pdf. 7. American Wind Energy Association, U.S. Wind Energy Projects, at http://www.awea.org/projects/. 8. Westar Energy, Transmission Projects, at http://www. westarenergy.com/corp_com/ contentmgt.nsf/publishedpages/ transmission.
12. Wyoming-Colorado Intertie Transmission Project Announcements Web page, Nov. 13, 2008, at http://www.wyia.org/wci/ announcements.html. 13. TransWest Express Project, Presentation by David F. Smith to WestConnect Annual Planning Workshop, Nov. 14, 2008, TransWest Express LLC, at http://www. westconnect.com/filestorage/ 20081113%20TWE%20WestConnect% 20APW.ppt. 14. Wyoming Infrastructure Authority Transmission Projects Web page, at http://www.wyia.org/projects.htm. 15. High Plains Express Transmission Project Feasibility Study Report, June 2008, at http://www.rmao.com/ wtpp/HPX_Studies.html.
9. Presentation of the Hon. Carl Holmes to the National Wind Coordinating Collaborative’s Southwest Power Pool Workshop, Dallas, Aug. 22, 2007.
16. Id.
10. Wyoming-Colorado Intertie Transmission Project Web site, at http://www.wyia.org/wci/index. html. 11. Wyoming Infrastructure Authority, Open Season a Success for Wyoming-Colorado Intertie, Aug. 26, 2008, at http://www.wapa.gov/ newsroom/pdf/WCIOpenSeason Outcome82608.pdf.
17. Loyd Drain, Wyoming Infrastructure Authority: Pioneering Power Transmission in the West, Presentation before Southeast Wyoming RCBD Council, Nov. 6, 2008, Wheatland, Wyo., at http://www.wyiaorg/projects.htm. 18. New Mexico Transmission Authority Plans $33 Million Investment to Connect Wind Farm, ELEC. UTIL. WEEK, Oct. 13, 2008, at 24.
19. Colorado Clean Energy Development Authority, Minutes of April 23, 2008, Board meeting. 20. Public Service Company of Colorado, Senate Bill 07-100, Designation of Energy Resource Zones at Transmission Planning Informational Report, Nov. 23, 2008. 21. Wyoming Infrastructure Authority, State of Wyoming 2009-2010 Biennium Budget Request, Wyoming Infrastructure Authority Web site, at http://www.wyia.org/Docs/Budget Spending/WIA%20Budget% 20Request%20FY%2009%2010.pdf. 22. Kansas Electric Transmission Authority, 2008 Annual Report to the Governor and the Legislature, Jan. 12, 2009, at http://www.kansas.gov/ keta/Reports/2008_Annual% 20Report%20final_signed.pdf. 23. New Mexico Renewable Energy Transmission Authority, Fact Sheet on the Renewable Energy Transmission Authority. 24. Idaho Energy Resources Authority, Minutes of the Idaho Energy Resources Authority Directors’ Meeting – Boise, Idaho, Oct. 26, 2005, at http://www.iera.info/pdf/ minutes_10_26_05.pdf.
States may wish to consider traditional legislative oversight.
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