In April 2016, the University of Minnesota’s Humphrey School of Public Affairs released a report, Transmission Planning and CapX2020; Building Trust to Build Regional Transmission¹, detailing the monumental effort a coalition of eleven Midwestern utilities² undertook from 2004-2012 to design, site, and build 800 miles of new high-voltage transmission lines worth over $2 billion across Minnesota, North Dakota, South Dakota, and Wisconsin. The CapX2020 project was as much a feat in cooperation and coordination as it was in transmission capacity expansion.
As the report highlights, the effort undertaken by the leadership of the participating utilities was unprecedented and created a model for future transmission planning to build off of. According to Elizabeth Wilson, Professor of Energy and Environmental Policy and Law at the Humphrey School:
“The coordinated CapX2020 efforts across several states is at the forefront of energy system planning evolution in the United States.”
Collaboration from the Start
As the report’s lead author Marta Monti describes, the CapX2020 project was initiated through a few informal conversations; there was no defined goal or outcome during the first few meetings. The team started slow, taking incremental steps forward to begin studying what investments would be needed, where transmission lines could be sited, and who the critical project partners would be.
Over the first few years of the project, from 2004-2007, the leadership team engaged with local NGOs, including Great Plains Institute, to understand how best to site the transmission lines to support wind energy development. The utilities and NGOs also engaged the Minnesota Legislature, culminating in the passage of the 2005 Omnibus Energy Bill, which, among other things, created a cost recovery mechanism making investment in transmission infrastructure possible.
Without any major transmission projects being built since the 1970’s, aging infrastructure and persistent congestion on existing transmission lines were becoming a liability.
Moreover, evolving state renewable energy policies and the Federal Energy Regulatory Commission’s Order 2000 created a significant external push to invest the requisite capital in the next generation of energy infrastructure in the Upper Midwest. But these factors alone did not make the CapX2020 project as inherently collaborative and ultimately successful as it turned out to be.
Overcoming the Contentious Nature of Transmission Planning
Transmission planning is a notoriously precarious process involving a broad array of stakeholders from utilities and state policymakers to local landowners affected by siting decisions. The Midwest has a history of tenuous relationships and friction over the siting of electric lines when local resentment against power line siting, and a clear lack of stakeholder engagement, evolved into destruction of utility equipment and powerline towers in the 1970s³.
State patrol at transmission protest in Minnesota in the 1970’s
With that prickly history in mind, the CapX team aimed to build support for the project portfolio by engaging with stakeholders, including renewable energy developers and technical experts, very early on in the process. The team also consistently engaged with local landowners and residents who would potentially be impacted by the construction of the new transmission lines. Unlike in the past, stakeholders were not engaged to tell them the plan and threaten eminent domain, but to work with them to find amenable siting solutions that would help bolster local economies.
The Humphrey research report provides insight into how the CapX2020 group developed a shared vision and aligned around a common goal, understanding that the coordinated effort would be more beneficial for everyone involved than a competitive, adversarial relationship. As the Great Plains Institute’s own Mike Gregerson puts it:
“If [the utilities] would have tried it individually or on their own they could have possibly not gotten it done, or had some projects turned down…By working together, CapX2020 presented a much stronger picture to MISO and the states that they were in that this was a good idea. Even though it was a lot of money, there was a believability to the work that they did.”
Maybe it’s just the nature of people in the Midwest, Minnesota Nice, or a strong sense community and common good. Regardless of intrinsic cultural values, the leadership team was able to allocate the cost of the project portfolio ($2 billion) in one day using what has now become known as the “poker chips exercise” in which each utility member was given a specific number of poker chips to bid in as their contribution to the project portfolio as a whole. When all the chips were laid down, the team adjusted a few here and there to cover the expenses of the entire portfolio, regardless of the direct benefits of each individual line.
At its core, the CapX2020 project is a story of institutional collaboration and success, some of which can serve as a model for the industry moving forward.
Moving Forward: The Benefits of CapX for Renewable Energy
Not only did CapX2020 lead to the implementation of a transmission line project portfolio that enabled the construction and delivery of wind energy to Midwest load centers, it created a model by which the Midcontinent Independent System Operator (MISO) conducts its transmission planning. Like the CapX project, MISO now uses a method of scenario planning, where stakeholders and MISO develop a set of Futures together to capture all the potential future manifestations of the region’s transmission grid, on top of which transmission build out plans are overlaid, leading to a “no regrets” transmission expansion plan that is most likely to serve the needs of all the stakeholders involved in the development process. This is also the model on which MISO’s Multi-Value Project portfolio was developed, recognizing the shared value of meeting public policy and clean energy goals, enhancing system efficiency, and meeting reliability needs. When finished the MVP portfolio will consist of 17 projects worth over $5 billion and enabling 25GW of wind power to flow across the region.
In a little over a decade, the Midwest has transformed from a region struggling to keep pace with policy and technology development to one which is leading the country in wind energy development, thanks in large part to its rapidly modernizing transmission grid.
With the help of the Great Plains Institute and other NGOs in the region, the partner utilities were able to navigate uncharted waters to successfully implement an immensely complicated project portfolio based initially on little more than trust and a recognized need to collaborate.
¹ Monti, Marta. Rose, Stephen. Mullins, Kimberly. Wilson, Elizabeth. Transmission Planning and CapX2020 Building Trust to Build Regional Transmission Systems. April 2016. https://www.hhh.umn.edu/sites/hhh.umn.edu/files/capx2020_final_report.pdf
² Central Minnesota Municipal Power Agency, Dairyland Power Cooperative, Great River Energy, Minnesota Power, Minnekota Power Cooperative, Missouri River Energy Services, Otter Tail Power, Rochester Public Utilities, Southern Minnesota Municipal Power Agency, WPPI Energy, Xcel Energy