Let’s look at each of the reasons ATC gives for building the high-voltage Cardinal-Hickory Creek line:
Local and regional electric system reliability – ATC claims transmission expansion is the best way to achieve electric system reliability. However, most power outages occur in the distribution portion of the grid, not the transmission portion. Transmission expansion will do nothing to improve reliability in that regard. Furthermore, the larger and more centralized is the grid, the greater its vulnerability to severe weather conditions and cyber-attacks. Finally, the most cost-effective way of meeting peak electricity demand is through energy efficiency, demand response, local wind power projects, solar energy development, and energy storage. Demand response refers to the reduction or shift in electricity usage during peak periods on the part of consumers in response to some form of financial incentive (see Lazard’s Levelized Cost of Energy Analysis). (Environmental Law and Policy Center (ELPC) report to Wisconsin policymakers and concerned public, October 16, 2016, p. 22)
Provide Potential Economic benefits for utilities and electric consumers – It’s true that the Cardinal-Hickory Creek high-voltage transmission line would directly benefit Wisconsin’s largest utility companies because they own portions of American Transmission Company, the entity which would own about half of the Cardinal Hickory Creek project and a large portion of its proceeds.
The fact that Wisconsin’s existing transmission lines are not being used close to capacity and that demand for electricity is flat significantly reduces any potential for additional transmission lines to lower congestion costs and provide savings. Differences in interstate power costs are on the order of 1% and Wisconsin utilities recently projected less use of interstate electricity in coming years. So while construction of large, high voltage transmission lines provide important economic benefits to utility companies, electricity consumers are seeing a large portion of their bills going to pay off the capital debt– a large part from excessive spending on transmission expansion. On an average, monthly electric bill of $110, over 50% of the bill goes to pay off capital expenses 30% for fuel costs, and 15% to pay utility services. http://breakingenergy.com/2013/11/26/how-much-should-self-generators-pay-for-the-grid/
When utility interests use the term, “economic savings” in relation to transmission proposals, they are estimating potential net savings relative to taking no action over 30-40 years. These “savings” should not be construed as actual reductions in utility bills. The “net savings” is the difference after many millions are invested upfront in the transmission project and potential reductions from a variety of costs factored in. The potential cost reductions are in large part dependent on energy use increasing over 30-40 years. The transmission applicants are free to project increasing energy use because the Wisconsin PSC has not been requiring confirmation of these projections by impartial parties. Even with projections assuming energy use will steadily increase, the potential net energy savings that ATC/Xcel estimated for the 345 kV Badger-Coulee transmission line are razor thin– on the order of 5 to 15 cents per month under slow growth conditions. For comparison, the guaranteed savings of replacing a single, 60 watt, incandescent light bulb with a $2 LED bulb are about 50 cents per month.
Greater use of renewables by expanding infrastructure – MISO and ATC have not provided information on the relative proportions of coal-generated electricity and wind-generated electricity that will be carried by the proposed Cardinal-Hickory Creek line.
Indeed, because Wisconsin’s Renewable Portfolio Standard (which sets the required level of state usage of renewable energy) has been set at 10%, and this target is currently being met, transmission expansion is not likely to increase demand for remote renewables transported over long distances.
Moreover, it’s important to understand that ATC is an open-access AC line (alternative current) which allows power plants and other lines to “tie in” along the way. ATC and ITC will likely contract with the electricity supplier that pays the highest. Environmentally harmful lignite coal plants in North Dakota and fossil fuel plants in other states are eager to export their surplus electricity to Wisconsin, especially since local utilities in Iowa and Minnesota are developing more in-state wind power and therefore reducing their demand for out-of-state energy. (ELPC report and more detailed explanations can be found at http://soulwisconsin.org/)