St. Louis Park company behind novel $2.5B Soo Green Line underground power line project

The Soo Green Line would be a unique addition to the U.S. electricity grid. Running along a railroad corridor, the big underground power line would ship low-cost renewable energy from the Upper Midwest to eastern markets.

Now, if it can only surmount barriers in the power line approval process.

The 350-mile high-voltage direct current (HVDC) line would run from Mason City, Iowa, to a town about 50 miles west of Chicago. The firm behind the $2.5 billion project, Direct Connect Development Co., is based in St. Louis Park and funded by a global consortium of energy heavyweights.

Soo Green Line has a deal with the Canadian Pacific Railway (successor to the Soo Line Railroad) to host the power line along its right of way, alleviating the biggest problem in plotting transmission lines: resistance from landowners and unwanted environmental impacts.

"Underground transmission makes a tremendous amount of sense for projects that are bigger," said Joe DeVito, Direct Connect's president. "The primary issue most people have is the 'viewshed' — they don't like to look at it."

The Soo Green Line has other benefits. As an HVDC line, its "line loss" of electricity due to heat would be less than in a traditional alternating current (AC) power line. And at 525 kilovolts, it would be able to push through considerably more electricity than a standard 345-kilovolt AC line.

Soo Green is proposed as a "merchant" power line. The company has no traditional ratepayers, such as utilities do, to lean on for funding. Instead, power line users would foot the bill, providing Soo Green investors with a return.

"We are marrying up [electricity] generators and buyers," DeVito said.

The idea for the Soo Green Line sprung from a plan years ago by CNN founder Ted Turner to build a wind farm on his South Dakota property. With no transmission option, Trey Ward, a lawyer working for Turner, developed the idea for a long-distance underground power line.

Ward, Direct Connect's CEO, works out of North Carolina. DeVito, a power-industry veteran and engineer by training, works from St. Louis Park, as do half the company's 10 employees. More than 100 more people are working on the project for Direct Connect's partners.

Soo Green is about 80% owned by Copenhagen Infrastructure Partners K/S, a Danish private equity fund and a major investor in renewable energy projects.

Siemens Energy, a big German company providing key equipment for the project, owns 10%; New Jersey-based Jingoli Power, the line's main construction contractor, 5%. Last week, the Pennsylvania utility company PPL also bought a 5% stake.

The Soo Green Line is uncommon in that it crosses two major U.S. power grids: MISO, which includes Minnesota and 14 other states in the country's center; and PJM, which covers 13 states, mostly in the east, though also parts of Illinois and Indiana.

Government regulatory approvals don't appear to be an issue, but crossing into PJM territory is. PJM, like MISO, an Indiana-based nonprofit that counts utilities and other energy stakeholders among its members. They both have a thicket of rules for new transmission.

Since the Soo Green Line would carry energy originating in MISO, not PJM, PJM considers it a power generation project, not a transmission line. But like MISO, PJM has a long line of generators, mostly solar and wind projects, already waiting to connect.

The hurdles are resulting in delays — big ones. Soo Green had originally anticipated starting construction as early as late this year and transporting electricity by 2024's fourth quarter. The processing time in the PJM queue would push that date by more than two years, Soo Green says.

In June, Soo Green filed a complaint with the Federal Energy Regulatory Commission, asking that it require PJM to treat the project like a transmission project, not a generation one.

Despite the disputes, DeVito said he's confident Soo Green will become reality.

"We have serious momentum with this project," he said.