Unlike most of the state of Michigan, residents of Hillsdale, Clinton, Coldwater, Marshall, and Union City will not pay transmission costs for new energy from the plain states.
The cities are all part of the Michigan South Central Power Agency (MSCPA) –– a municipally owned utility –– that does not have to shoulder the burden of the new transmission and grid expansions.
The new transmission lines were approved in December of 2011 by Midwest Independent Transmission System Operator (MISO), a transmission organization that serves parts of 11 states and Canada. Regions served by MISO have to incur the cost of the new lines.
“[MISO] is looking at building a lot of large wind farms in the plain states. To get energy from there, where it really cannot be used, eastward, they have to build new transmission lines,” said Rick Rose, director of the Hillsdale board of public utilities. “The [Federal Energy Regulatory Commision] has set up rules that mandate that Michigan has to pay 20 percent of the of cost”
However, the FERC recently ruled that the MSCPA has special status under a grandfathering agreement because MSCPA owns transmission rights. This leaves Hillsdale and other MSCPA members in a better position than the rest of Michigan, Rose said.
“Way back about 30 years ago, when MSCPA was created, one thing we purchased is an investment in the power transmission itself,” said Glen White, general manager of MSCPA. “Fast forward 20 years. Because we have existing transmission rights, our rights extend around old consumer territory.”
Because of those rights, he said, MSCPA members will not have to pay for the new projects MISO intends to build. Some of these projects are as far away as the Dakotas.
“The rest of the state –– for example: Detroit Edison Company is part of [MISO] –– will have to pick up the tab,” White said.
And the tab for building the transmission lines, White said, will be approximately $7 billion according to engineers. Michigan will have to pay for 20 percent of the total cost. While he could not estimate the cost to consumers, he believes “the cost would be significant.”
The rest of the state will incur the cost even though Michigan law requires all renewable energy it consumes to be produced in state, Rose said.
Even if Michigan could use the power, both Rose and White agreed the energy could not travel from the plain states here.
“As far as effectively using the power in Michigan, no. It probably won’t get as far as Chicago. Electrons just fall off with distance,” White said.