South Dakota wind projects limited by lack of power lines

Associated Press • Posted: Wednesday, January 18, 2012

(AP) SIOUX FALLS, S.D. — North Dakota is expected to add hundreds of megawatts of wind energy this year, while development has slowed to a near stop in South Dakota. The difference seems to be the availability of high-voltage power lines to ship the power to cities that need it.

South Dakota has more than 30,000 megawatts of proposed wind energy projects in the queue, according to the American Wind Energy Association, but a state association director said he’s received no indication from developers that they’re ready to start building new wind farms.

“As far as large projects going forward today, there’s not much in the hopper,” said Ron Rebenitsch, executive director of the South Dakota Wind Energy Association.

South Dakota more than doubled its wind power capacity in 2010 by adding 396 megawatts — enough to power nearly 120,000 homes.

Just 75 megawatts were added in 2011, and a lot of the slowdown has to do with the lack of transmission capacity, said Josh Gackle, regional policy manager of the Minneapolis-based group Wind on the Wires.

“The availability to ship power out of South Dakota and to points farther east is really hamstrung by the lack of high-voltage transmission,” Gackle said.

In North Dakota, one major project that’s been approved plus three others being considered by the state Public Service Commission could add 350 megawatts of capacity this year.

Much of that growth has been made possible by a power transmission line that runs from near Center, N.D., to a utility substation near Duluth, Minn. The line, bought two years ago by Duluth-based Minnesota Power, is devoted almost entirely to carrying wind energy out of North Dakota, Gackle said.

South Dakota wind developers received some good news in December, when the Midwest Independent Transmission System Operator, a nonprofit regional transmission organization, approved 17 new transmission lines.

Three of those will help move wind energy out of South Dakota, and they’ve received a special status allowing the companies building them to spread the cost of construction throughout the region, Gackle said.

The Brookings Line, a $730 million high-voltage line that will begin at a substation north of Brookings and run nearly 240 miles to a proposed substation southeast of Minneapolis, is scheduled to be in service by 2015. The joint project of 11 utilities, including Otter Tail Power and Xcel Energy, has already received permits from the South Dakota and Minnesota public utilities commissions.

Two more lines running from Elendale, N.D., to Big Stone and from Big Stone to Brookings also received MISO approval and will qualify for cost sharing, but those lines haven’t yet received state regulatory approval.

The other major factor hampering wind development is uncertainty about the production tax credit, a federal incentive that helps offset the cost of electricity production during a wind farm’s first 10 years of operation. The credit will expire at the end of this year unless Congress passes an extension.

Rebenitsch said companies want certainty, and a 3- to 5-year extension instead of more typical 2-year extensions could spur more development.

“They’re kind of putting things on hold to see what happens,” he said.

But, the pending expiration date is also spurring development, by pushing some companies to get turbines spinning by Dec. 31.

North Dakota regulators in October approved construction of a 105-megawatt Minnesota Power wind farm in Morton and Oliver counties that calls for construction of 35 turbines. And two companies formed by NextEra Energy Resources have applied to build 30 turbines in north-central Morton County and 62 turbines in northern Burleigh County.

Jerry Lein, a PSC utility analyst, said the three projects remain under review.

Rebenitsch said South Dakota has a phenomenal wind resource, but it needs to improve access for potential customers.

“We’re a little bit like the farmer without a road to the market,” he said. “You can have all the grain in your bin, but if you can’t get it to market, it’s just difficult to plant the next crop.”