ATC Confirms No Guaranteed Ratepayer Savings with Transmission Expansion

January 11, 2015 American Transmission Company witnesses admitted during technical hearings last week at the Wisconsin Public Service Commission (PSC) that they could not guarantee ratepayers’ bills will decrease if the proposed Badger Coulee regional high-voltage transmission line is built. Ratepayer advocacy groups SOUL of Wisconsin and Citizens Energy Task Force have been critical of the economic benefits claimed based on this, and the lack of comparison to no-wire alternatives.

Witnesses from applicant American Transmission Company (ATC) and the Midwest regional grid operator (MISO) said if and how cost savings in the purchase of wholesale energy would be passed to ratepayers would be determined by distribution utilities. Both organizations conveyed they didn’t break down numbers to that level and could only produce totals.

Terry Henn, ATC project manager in charge of Badger Coulee, confirmed that, while the application defines economic benefits as the savings in cost of electricity for Wisconsin, Applicants could not guarantee savings to the ratepayers. According to Henn, “The savings of the project are to our interconnected utilities. How they pass those savings on to the ratepayers is … within their tariff and pay structures and things of that nature…” Henn also confirmed that the application doesn’t identify profits to the applicants.

Testimony by Dale Burmester, ATC’s Manager of Economic Planning, and Xcel Energy’s Amanda King-Huffman demonstrated the Badger Coulee line’s dependency on future projects, and their costs. Badger Coulee’s projections, since 2005, have assumed CapX2020 was in place, Burmester said. The Hampton-Rochester-La Crosse CapX2020 segment was approved by the PSC in May 2012.

Burmester had previously testified that Badger Coulee would be less expensive for Wisconsin ratepayers than the Low Voltage Alternative because Badger Coulee costs would be shared with other states. During the hearing, he confirmed that, in addition to Badger Coulee, Wisconsin ratepayers would also share in costs for other “Multi Value Projects” (MVPs). King-Huffman recalled how Badger Coulee and subsequent MVP projects had been discussed during the 2012 CapX2020 Wisconsin review process, but that their costs were not. King- Huffman also conveyed how this portion of CapX2020, whose costs are primarily paid by Wisconsin ratepayers, is not an MVP portfolio project.

King-Huffman testified that Badger Coulee would not be needed for local reliability in the La Crosse area until 2055 using a load growth of 1.2%. She also confirmed that Xcel did not compare costs and benefits for alternatives for the La Crosse area, she said.

Testimony submitted on behalf of Citizen’s Energy Task Force and SOUL of Wisconsin by engineer Bill Powers demonstrated how the no-wires alternatives of demand response, energy efficiency and distributed generation were less costly solutions to address reliability. Responding to ATC’s Burmester testimony that reliability issues that could occur due to bulk power transfer, Powers explained how there would be no reliability issue if there were no increases in power flow from west to east and that relying on all this imported power was compromising Wisconsin’s transmission system.

Powers also pointed out that wind generation did not match energy use patterns as well as solar, and that increases in fossil fuel based electrons, including lignite coal, would increase as transfer capacity increased. The impact of this was evident in discussions of how five of six scenarios presented by applicants showed increases in carbon emissions.

Henn and other ATC witnesses acknowledged that ATC received requests for a cost/benefit comparison between the high voltage transmission option with alternatives prior to submission of the application. He said ATC took no further action based on them, contending ATC had already done the analysis.

Henn acknowledged perceptions regarding losses in property values, tourism and business, and health and safety concerns but said ATC did not study them because only costs that will come out of the pocket of the project owners are included in cost calculations. This would include payments to affected communities and to landowners to acquire right-of-way easements but not for decreases in property value or the cost of measures to cope with negative impacts of the line such as relocating livestock.

Attorneys for the applicants claimed to have taken damage to the Amish culture into account, but did not provide evidence of doing so. Asked if they have budgeted for possible relocations of Amish families, Henn said he did not believe the company has budgeted for any relocations for those who would move to avoid the line. ATC’s real estate manager conveyed lack of awareness that one of the proposed routes would cross an Amish community, even after driving the route through the state’s largest Amish community outside of Cashton.

In November 2013, the PSC informed applicants that their discussion of the high voltage transmission option and alternatives did not provide a comprehensive summary that would allow the public to better understand the need for the proposed project. Based on this, the PSC asked Applicants revise and expand the application to include a comprehensive discussion of need and alternatives. Concerns were raised during both the technical and public hearings that these requests by the PSC, citizens, municipalities and legislators have not been adequately addressed.

PSC Commissioner Eric Callisto, who did not participate in the public hearings because his term is set to expire in February, objected to a December rate case decision, conveying, “I think we should slow down…and open up a generic investigation…[to] evaluate placing a fair and transparent value on distributed generation, and at least start down the discussion path of the role of regulated utilities in a future with flat load growth, increased distributed generation and more robust consumer involvement in energy choices.”

Questions regarding the Environmental Impact Statement (EIS) closed the technical hearings. PSC staff recalled citations on health risks not considered in the EIS, with health risks related to corona not included. Applicants also acknowledged not taking this into account. PSC staff admitted that studies on socio-economic impacts were not completed, and that there will be negative impacts with a project of this magnitude.

Over 2,000 comments on the draft and final EIS were received. Well over 90 percent were critical, and the call to comprehensively compare the costs and benefits of the proposed project to alternatives was strong.

Parties involved in the hearings will provide closing arguments by January 30. A decision matrix will follow, and a decision is anticipated by March or April of this year.

For more information contact: Deb Severson; deb@whispirit.com or Rob Danielson; type@mwt.net

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