The CAPX2020 Model: Part II
MOGENSEN CAPX2020 is very important for Xcel and the region.
You build transmission for many reasons. You’re looking for transmission investments to make sense in meeting whatever your drivers are, and to make sense as part of your financial and investment portfolio. So you’re looking at both sides: does the transmission meet the needs in designing the project and getting it done, and also how does the investment environment look? What’s the recovery opportunity? For Xcel, the CAPX2020 project meets all of those needs very well.
“With broader projects, we must reach consensus on need and value.”
-Teresa Mogensen, Xcel Energy
Our reliability needs as well as those of the generation group were part of the decisions on what was the right kind of strategic infrastructure to put in place. The primary factor driving the project was Minnesota’s renewable energy resource requirement -- particularly for the Brookings project, which opens up a path for the region, not just Minnesota but the entire Midwest ISO, to access renewable energy. [Editor's note: CAPX2020 includes both the Big Stone-to-Brookings and Brookings-to-Hampton projects, collectively “Brookings.”] We get to the point with the bulk transmission system where you just can’t put any more resources on unless you build more network. We’d reached that point, not only to serve Minnesota but to provide the gateway into the broader market.
CAPX2020 fit into all those needs: Is it in the public interest? Is it appropriate? Is it in investors’ interests? Does it help us remain financially viable? Ultimately costs are lower if you’re able to execute them at a good cost.
“In the past, transmission investments were very plant-specific. Today it’s a different story, with utilities wanting to transact for power both for reliability and economic purposes.”
FORTNIGHTLY Although some segments are connecting wind resources from the Buffalo Ridge into the MISO market, some also are expanding capacity to coal-fired power plants in the Dakotas. How do coal resources factor into CAPX2020 development?
MOGENSEN If you look at what’s going on in the MISO planning area, all resources are represented. The transmission network is resource-neutral today. In the past, when it was focused on each utility’s needs, you had a plant in a certain place and needed transmission to get that plant’s generation to the load.
Transmission investments were very plant-specific. Today it’s a different story, with utilities wanting to transact for power both for reliability and economic purposes, and wanting to access a wide variety of different resources.
Diversity affects both reliability and economics. That’s part of MISO’s multi-value planning (MVP) process, which resulted in this first MVP portfolio. The Brookings project is part of it, and so are some other projects that extend into the Dakotas and Iowa, into the western edges of MISO. ‘Multi-value’ includes expanding the opportunity to bring resources from the west into the mix of the broader market. There wasn’t a focus on whether it’s for coal or hydro,