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Transmission: Grasslands seeks Recovery Act loans

Montana-based transmission builder Grasslands Renewable Energy is banking on the US federal government's 2009 Recovery Act to realise a plan for unlocking its home state's vast - but largely untapped - wind power potential.

New projects similar to this one at Cedar Ridge will face stronger setback rules
New projects similar to this one at Cedar Ridge will face stronger setback rules

The company is seeking a loan from the Western Area Power Administration (WAPA), which controls a $3.25 billion pool of federal loan authority for grid-related enhancements. WAPA, one of four power-marketing administrations within the US Department of Energy, operates 10.4GW of transmission services in 15 central and western states.

The Grasslands project, dubbed Wind Spirit and targeted for 2017 completion, would comprise a series of regional transmission feeder lines for transporting wind power from far-flung locations into trunk lines which are expected to be constructed for delivering electricity towards population centres in Nevada, Arizona and California.

These trunk lines are large transmission lines that are used by multiple generators.

Although some 200 companies applied for the WAPA loans, Grasslands believes its project is unique and does not view the process as a competition. Canada-based energy giant TransCanada has already proposed a pair of 3GW trunk lines in the region.

"Right now we are not planning on building those large trunk lines," says Matt Jennings, director of government affairs for Grasslands. "So it would be easy to see ourselves as potentially being collaborative with some other transmission developers, rather than in direct competition. We will be trying to fill capacity on those trunk lines."

Letters of intent

To that end, Grasslands has lined up letters of intent and financial commitments from ten wind developers with a collective potential for 3GW of generation in Montana, North Dakota and Alberta, Canada.

The company's plans also include a 350MW pumped-hydro facility, proposed for central Montana, which would help balance the new wind generation. Combined, the final result could cost as much as $4 billion but deliver 1GW of firm renewable energy.

"It really is about integrating renewable energy for us," Jennings says. "And so, as we go out to communities, we do not only talk about putting up poles and wires through a county. We talk about the wind developments that come along with that."

Grasslands began in 2008 as a joint venture between Rocky Mountain Power and Absaroka Energy. Grasslands recently partnered with Spain's Elecnor, which offers considerable international experience in transmission and wind. Further, says Jennings, the founders of Grasslands were involved in the early development stages of the Montana Alberta Tie Line (MATL), a major transmission project under construction between Lethbridge, Alberta, and Great Falls, Montana.

A WAPA loan funded roughly 80% of MATL's $200 million price tag and Jennings is cautiously optimistic about the prospects of similar government assistance for the Wind Spirit project. "A lot of this is a learning experience for WAPA as well as for us," he says. "And, because of that, there are lengthy negotiations and discussions. But in the year and a half since the Recovery Act passed, WAPA really has only chosen a handful of projects to fund - and that means there is quite a bit of money still available."

Montana, ranked among the top handful of states for wind power potential, has less than 400MW online and clearly stands to benefit from enhanced transmission. WAPA, meanwhile, continues to examine its money-lending options.

WAPA spokesman Randy Wilkerson says: "We signed a memorandum of understanding with Grasslands. It is a non-binding agreement that basically says we are going to continue discussions. We do have a number of projects in that category."

As for the 350MW pumped-hydro facility planned for central Montana, Jennings describes it as not unlike two huge bathtubs connected by a pair of pipes. Wind power pumps water uphill from the lower bathtub for collection in the upper one, then the water drains back down through conventional hydroelectric turbines when power is needed.

A preliminary permit from the Federal Energy Regulatory Commission gives Grasslands a three-year licensing priority for the project.

Although some consider pumped-hydro facilities to be prohibitively expensive, Jennings disagrees. "There are other pumped-hydro facilities already in operation in Europe and in the US. And that means many companies did find ways to build them and make them work."

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