Utilities invested 12 years and $1.85 billion to fortify the Midwest electric grid and enable renewable development
A 2004 hallway conversation between Minnesota’s two largest utilities spurred a 12-year effort to update and expand the region’s electric grid.
With the late-September completion of a 345-kilovolt transmission line between Hampton, Minn., and La Crosse, Wis., the original vision for the massive CapX2020 grid expansion was completed.
CapX2020 is a joint initiative of transmission-owning utilities in Minnesota, North Dakota, South Dakota and Wisconsin formed to upgrade and expand the electric transmission grid to ensure continued reliable and affordable service.
CapX2020 was the largest electricity transmission project in Minnesota since the 1970s. The value delivered by the projects in terms of reduced congestion, market access, improved reliability and system resiliency are expected to far exceed the $1.85 billion investment in the projects.
CapX2020 also has opened new outlets for renewable energy (initially wind and now also utility-scale solar) to be delivered to the market.
A new era
A report released in April by the University of Minnesota’s Humphrey School of Public Affairs described CapX2020’s accomplishments as “an example that other utilities can and should emulate as they cooperate on regional projects.”
Researchers said the CapX2020 partnership was the first instance of a large group of utilities working collaboratively to address the transmission needs of an entire region. The report said CapX2020 achieved success by building a strong coalition of utilities that had the resources to finance and manage large-scale projects, and the political influence to ally with a broad range of stakeholders to change laws and regulations.
CapX2020 also provided an opportunity for all the participating utilities to invest in the projects to benefit the customers they serve. This was innovative considering that there were multiple simultaneous large-scale projects and diverse business structures among the participants.
An economic force
During construction of the projects, local communities received an economic boost. An economic impact study, conducted by the University of Minnesota Duluth’s Bureau of Business and Economic Research, estimated the CapX2020 projects would result in the creation of thousands of construction and related jobs as well as collectively provide nearly $50 million in tax revenue to the four states in which the projects were built.
The CapX2020 utilities continue to assemble periodically to discuss regional transmission needs and policy that impacts transmission. In 2011, MISO awarded a fifth project, the Big Stone South-Brookings County project, which is now under construction and will be completed in 2017.
The CapX2020 utilities are Central Municipal Power Services, Dairyland Power Cooperative, Great River Energy, Minnesota Power, Missouri River Energy Services, Otter Tail Power, Rochester Public Utilities, Southern Minnesota Municipal Power Agency, WPPI Energy and Xcel Energy.