Minnesota utilities flip switch on large segment of $2.1 billion CapX2020 transmission project

ST. CLOUD – The Minnesota electric power industry is wrapping up its biggest transmission line expansion in four decades.

Executives of Xcel Energy Inc., Great River Energy and other utilities on Monday dedicated the two longest segments, spanning nearly 500 miles, of the cross-state power line project known as CapX2020.

It was cheered by a leader in the wind power industry who attended the ceremony at an Xcel substation near St. Cloud built for the new, 240-mile power line between Fargo and Monticello.

"Transmission was the glass ceiling — we couldn't get enough transmission capacity for wind," said Beth Soholt, executive director of St. Paul-based Wind on the Wires, an industry trade group.

She said the Fargo-Monticello transmission line and another between Brookings County, S.D., and Hampton, Minn., south of the Twin Cities, are helping prairie wind farms get power to customers.

The five separate CapX2020 transmission lines cost $2.1 billion in total. Two sections are still under construction, although most of the Minnesota work is finished, except for a section near Rochester. Segments in Wisconsin and South Dakota also are still being built.

Some parts of the completed lines, such as the one along Interstate 94 near St. Cloud, look half-built because only one side of each transmission tower has power cables. But project officials said that was intentional. If more capacity is needed in the future — to carry wind power or serve other power needs — additional lines can be strung.

Teresa Mogensen, vice president of transmission for Xcel, said the project has improved the reliability and security of the electric grid. She said the need for the line hasn't diminished even though power demand slumped after the 2008 financial collapse and has grown slowly since.

The project grew out of a hallway conversation at an industry meeting in 2004 between executives of the state's two largest power companies: Xcel, the Minneapolis-based utility that serves 1.2 million customers, and Great River Energy, based in Maple Grove and owned by 28 cooperative utilities serving 650,000 homes and businesses in the state.

Will Kaul, vice president for transmission at Great River, said his chat with Xcel led to conference calls, meetings and eventually the CapX2020 project, for which he served as chairman. Xcel and Great River led the effort, with participation by nine other utilities.

"It was one year after the East Coast blackout, and that was fresh in everyone's memory," said Kaul. "We started with a handshake and we weren't sure how we were going to pay for it."

Ratepayers ultimately pick up the tab. At Xcel, the price is added to the bill as a transmission "rider" or extra line on the bill.

In the Midwest, investment in large power line projects had largely been stalled for decades, Kaul said. Many utility executives, including Kaul, remembered the rallies, anger and acts of sabotage in the late 1970s surrounding the opposition to a transmission line through west-central Minnesota.

By the early 2000s, wind power was emerging as a major source of energy, especially in southwest Minnesota. Last year, wind supplied nearly 16 percent of Minnesota's electricity, and even greater shares in North Dakota and South Dakota, according to the American Wind Energy Association.

But transmission capacity didn't exist to carry all the electricity from farm-based turbines to urban power users. Some wind farms still must curtail production because of grid congestion. Others sell electricity at a loss, making money only because of the 2.3 cent-per-kilowatt-hour federal tax credit.

Soholt said the CapX2020 projects won't solve all of those problems, but will reduce the congestion. She said other transmission projects will be needed to fully integrate the Midwest's wind farms onto the power grid.

Priti Patel, Eagan-based regional director for MISO, which operates the midcontinent electric grid, said the CapX2020 projects are wrapping up at a time when many coal-fired power plants are closing because they can't comply with environmental regulations for mercury or other toxic emissions. The new transmission capacity "will help ensure the reliability of the electric grid," said Patel, who worked on the project in her former job at Xcel.

At its peak of construction, in 2013, CapX2020 employed 1,450 electrical workers, said Charlie Sable, outside business representative for the IBEW Local 160. The work, begun in 2009, is scheduled to be completed in 2017 with a final, 70-mile segment from Brookings, S.D., to Big Stone City, S.D., parallel to the Minnesota border. Most of the power lines are 345,000 volts.

CapX2020 also had negatives, including the deaths of two workers during construction. Utility executives observed a moment of silence Monday in their memory.

Many residents fought unsuccessfully to keep power lines off their land. In all, the lines crossed 2,000 properties, mostly along easements, said Tim Carlsgaard, a project spokesman.

About 100 landowners, including some farms, successfully invoked the state's Buy the Farm law, forcing utilities to purchase their land outright. The properties include Cedar Summit Farm, an organic dairy cow operation in New Prague, Minn.

The law was enacted in 1977 amid anti-power line protests of that era. But it was seldom invoked until CapX2020. Carlsgaard said the project represents the most widespread application of the law.

He said several farms or agricultural lands acquired by the utilities, including Cedar Summit, now are on the market.

David Shaffer • 612-673-7090 Twitter: @ShafferStrib