By Amanda Durish Cook
Xcel Energy can recover its investment in a recently approved 345-kV line project in southern Minnesota if the project is abandoned for reasons beyond the company’s control.
“We agree that the project faces certain regulatory, environmental and siting risks that are beyond the control of management and which could lead to abandonment of the project,” FERC said in a ruling Friday (ER18-12).
Xcel put the incentive request to FERC on behalf of subsidiary Northern States Power, which will design and construct the $108 million Huntley-Wilmarth 345-kV line. The company will be able to recover all “prudently incurred costs” associated with its investment in the line. The abandoned plant incentive was effected Dec. 1.
Northern States Power is investing $54 million with project partner ITC Midwest contributing the other half. Earlier Xcel estimates pegged project cost around $81 million. (See MISO Board Approves MTEP 16’s $2.7B in Tx Projects.)
The line will connect Xcel’s Wilmarth Substation and ITC Midwest’s Huntley Substation in south central Minnesota near the Iowa border. The project, which is expected to be in service by the end of 2021, needs permitting approval from the Minnesota Public Utilities Commission.
FERC can consider the abandoned plant incentive if the transmission project “results from a fair and open regional planning process” or if a project “has received construction approval from an appropriate state commission or state siting authority.”
The Huntley-Wilmarth project was part of the 2016 MISO Transmission Expansion Plan, though some stakeholders objected to the RTO’s decision not to open the project up to competitive bidding. MTEP 16’s only market efficiency project, it would have been put to a competitive process save for Minnesota’s right of first refusal law. FERC cited the planning studies from MISO’s annual MTEP process as grounds for approval.
“In this case, the MTEP transmission planning process, through which the project was approved, evaluated whether identified transmission projects will enhance reliability and/or reduce congestion,” FERC said.
