Financing CapX 2020 transmission

Filed under:Uncategorized — posted by admin on December 2, 2010 @ 10:12 am

It’s been building, and here are two recent articles about it, they’re bonding to build transmission and upgrade the Laramie River Station coal plant to continue use of coal:

Agency that helps provide power to Alexandria to issue $141 million in bonds

The Western Minnesota Municipal Power Agency (WMMPA) will close December 2 on a $141-million power supply revenue bond issue.

By: Staff Report, Alexandria Echo Press

The Western Minnesota Municipal Power Agency (WMMPA) will close December 2 on a $141-million power supply revenue bond issue.

WMMPA provides financing for electric utility-related projects on behalf of Missouri River Energy Services, which has 60 member municipal electric systems – including the city of Alexandria.

There will be three series of bonds and they will be used to refinance higher-interest debt and to fund construction of new transmission facilities and power plant upgrades.

WMMPA has a power supply agreement with Missouri River Energy Services (MRES) that entitles MRES to the output and use of all of the power generating and transmission facilities that WMMPA has financed. The two organizations also have an agreement under which MRES provides administrative services for WMMPA.

The first series will consist of $9 million in tax-exempt bonds to refinance older bonds. These will have maturity dates of 2017 and 2018. The second series of bonds also will be used for refinancing of older bonds. This $32 million issue will be taxable and will carry maturity dates of 2012, 2013, and 2016.

Almost $100 million in Build America Bonds or BABs will make up the third series. BABs are taxable, but because Western Minnesota is eligible to issue tax-exempt debt, it will receive a payment from the U.S. Treasury equal to 35 percent of the interest on those bonds. “The net cost of these bonds will be significantly lower than the cost would have been under traditional tax-exempt financing,” said MRES Finance Director and CFO Merlin Sawyer.

The BABs will mature in 2046 and will fund the WMMPA/MRES share of the CapX 2020 Fargo Project, as well as upgrades to the Laramie River Station. The Fargo project involves construction of new electric transmission facilities in the region. The Laramie River Station, a coal-fired power plant located in Wyoming, is the principal generating resource serving MRES members. “The reason for the long maturity of the third series is to take advantage of the current low long-term interest rates. While interest rates have increased in the last few weeks, the net interest rate on these bonds is the lowest ever realized by WMMPA for similar maturities,” Sawyer said.

Citi was the senior manager, with Barclays as co-manager for all three series of bonds. The true interest cost will be 4.37 percent.

Fitch Ratings has given the WMMPA bonds a rating of AA- with a stable outlook. WMMPA is one of just a few joint-action agencies in the nation to earn a rating in the double A category from Fitch. Meanwhile, Moody’s Investors Service had an A1 rating on the bonds and changed its outlook on WMMPA’s bonds from stable to positive.

And another, this time Rochester:

RPU board gives green light to joining transmission group

12/1/2010 8:23:26 AM

By Christina Killion Valdez  –  The Post-Bulletin, Rochester MN

Rochester Public Utilities has seen a benefit by buying and selling power through

Midwest Independent System Operator, a non-profit regional transmission organization. But joining MISO as a transmission owner could amp that up.

A recent economic analysis showed a projected savings of $16.6 million by 2025 if the utility invests its transmission resources in MISO as a transmission owner. That dollar figure prompted the RPU board on Tuesday to start the application process.

By joining MISO, RPU will generate revenue for investments in transmission that would otherwise fall on RPU customers, said Wally Schlink, director of power resources at RPU. That’s because through MISO the cost of investing in transmissions would be spread out to all power consumers, Schlink said.

If accepted as a transmission owner, RPU would get $600,000 a year in additional revenues for the first few years, but that would eventually grow as the utility invests $35 million to $40 million in new transmission lines through CapX2020.

“The real benefit is when CapX 2020 goes online,” said Larry Koshire, RPU general manager. “Right now, we have no debt on the transmission system. With CapX there will be a bond debt.”

The process of becoming a transmission owner is expected to take six to eight months and cost about $250,000, which was included in the economic analysis. On Tuesday, the board approved $100,000 to get the process started.

Plans are to have the application complete to be considered for acceptance as a transmission owner at MISO’s June meeting, Koshire said.

CapX in the news

Filed under:Uncategorized — posted by admin on @ 10:05 am

Two articles – as we’re on the road with the Fargo Public Hearing “Road Show” — today we start at the El Paso Bar and then on to somewhere in St. Cloud, guess I’d better figure that out pretty soon!

In the Cannon Falls Beacon:

St. Paul’s keeps an eye on CapX

by Ken Haggerty

St. Paul’s Lutheran church and school is among many keeping a close eye on the development of the proposed CapX2020 high power transmission line project in the Cannon Falls area .

St. Paul’s board President Dick Busiahn said the church was alarmed in March, 2010 when some proposed route maps for the line came out that showed it passing 150 to 300 feet away from the St. Paul’s property just west of Highway 52 and north of Highway 19.

Busiahn was especially alarmed that the maps had the St. Paul’s property designated as a residence, rather than a school and church, an error that has been corrected. Busiahn thinks the routing process calls for avoiding a church or school more than a single residence.

Busiahn circulated a petition requesting the route be moved away from St. Paul’s, saying it could negatively impact enrollment and expansion plans. The school has about 60 students, four teachers and attendants plus many volunteer assistants. “It is the congregation’s hope and intent to grow the school and to eventually replace the school structure with a larger building,” said Busiahn.

Busiahn also pointed out in the petition that St. Paul’s soccer fields and softball diamond receive heavy community use and that the power lines also could have a negative effect on those events.

The petition was signed by about 100 people and forwarded to the administrative law judge in St. Paul who is reviewing the utilities route permit application and the Minnesota Public Utilities Commission (PUC), which also reviews the applications.

The petition was accepted and recently published by the PUC as formal public comment on the CapX proposal for the Hampton to LaCrosse leg of the power line project.

Busiahn says that he thinks another round of public hearings is expected before any routes are finalized. He believes those could be coming in the first quarter of 2011. Busiahn said an administrative law judge recommended a change in a proposed route of the Brookings to Hampton leg of the project in part to avoid the Buddhist temple between Hampton and Farmington.

The CapX utility group is targeting a 2013-15 construction window for the power lines.

And this, from the Daily Republic, note the link of transmission and the coal plant in SE South Dakota:


Hypothetical path presented to huge wind project at meeting

Creating a 1,000-megawatt windpower project in South Dakota will require more than $2 billion of investment, but an assessment conducted by the South Dakota Wind Energy Association and Stuefen Research says the economic impact from the hypothetical project would be substantial.

The analysis shows that it would cost $2.19 billion to construct 1,000 megawatts of wind power capacity in Deuel County. The analysis is just that — an analysis, rather than an actual plan for a project.

According to the plan, $335 million of the total price would come from local investment, yielding a projected $538 million in total economic impact as the money makes its way through the economy, said Jared Alholinna, of CapX2020.

Besides the actual financing, perhaps the biggest challenge to the project is one that has plagued projects throughout the history of wind energy: transmission.

“We need to get this wind into the Twin Cities,” Alholinna said.

The presentation was part of the South Dakota Wind Energy Association’s annual meeting. About 150 people attended the meeting Tuesday in the amphitheater of the Mitchell Technical Institute Technology Center.

CapX2020 is part of ITC Midwest LLC, an Iowa-based electric transmission company that provides electricity to Iowa, Minnesota, Illinois and Missouri. ITC touts itself as the “only fully independent electric transmission company.”

Stuefen Research is a Vermillion-based LLC that has conducted previous studies on the economic impact of ethanol, wind transmission and a proposed coal-fired power plant in southeast South Dakota.

The project would require the construction of multiple transmission pathways of 345 kilovolt lines that would cover 478 miles, including 83.4 miles in South Dakota.

The South Dakota portion of the lines would cost an estimated $67.5 million. An additional investment of $1.35 billion would have to be made in the Midwest Independent Transmission System Operator — or MISO — to achieve 1,000 megawatts of exported wind energy.

Deuel County was selected in the study because of its proximity to the Brookings County Substation and its wind capacity. The plan would split the 1,000 megawatts of wind into four 250 megawatt farms to, according to the study, “more closely match actual wind development where typically smaller amounts of wind generators are grouped together into several wind farms rather than fewer but larger wind farms.”

The plan would create 5,360 full- and part-time jobs during the construction of the farms.

After construction, the study estimated, 184 “green or new economy” jobs would be created. The operation is predicted to create $6.5 million in new wealth.

And don’t forget that great SDEIA study about transmission build-out, coal and “we need a market!” which is what this is all about:

SDEIA Energy Study – Schulte

image: detail of installation by Bronwyn Lace