by Luke Jones
Posted 4/28/2014 12:00 am
Updated 6 months ago
A $2 billion, 750-mile transmission line project has been altered so that Arkansans will benefit from the wind energy highway that will be built through the state in coming years.
The project, called the Plains & Eastern Clean Line, won’t break ground until 2016, but the company behind it — Clean Line Energy Partners — announced this month that it would build a $100 million convertor station along the line’s route, somewhere in central Arkansas.
The station will allow local utilities to benefit from the power traveling along the lines and potentially allow Clean Line to become a utility in Arkansas.
Clean Line is a private transmission company in Houston. It develops projects that connect renewable generation points between states.
The Plains & Eastern project is one of five Clean Line transmission projects underway in the country, and the only one that passes through Arkansas. It has been in the works for the past half-decade and will build a transmission line intended to connect the Midwest’s wind resources to Arkansas and other states in the South with less potential to generate wind. About 3,500 megawatts of power in Oklahoma would become available to these states.
“In western Oklahoma, specifically in the Oklahoma panhandle, there’s a huge wind resource,” said Michael Skelly, president of Clean Line. “You can generate wind power and electricity at a very low cost. It’s typical to develop more projects in western Oklahoma without expanding the grid. At the same time, you have customers in Arkansas and the Southeast who are buying wind energy today and would like to buy more of it.”
Those customers could include Arkansas’ utility cooperatives, for example. The hugely expensive job makes sense for Clean Line, Skelly said, because the company gets paid for providing transport to transmission operators and other energy companies throughout its network. The new line would mean many new customers for the company.
“What our project will do is help expand that market and connect the resources with customers in those states,” Skelly said.
But as initially planned, the project would have had little effect on Arkansans beyond creating some jobs through the construction period. The line traveled from Oklahoma east through Arkansas, but Clean Line’s electricity wouldn’t have stopped in Arkansas along the way.
This was the basis of the Arkansas Public Service Commission’s 2011 denial of Clean Line’s attempt to be recognized as a utility in the state. Becoming a utility would have meant the company could have used eminent domain in creating the route for its new lines.
However, that changed when Skelly announced the convertor station at this month’s Little Rock Sustainability Summit at the Clinton Presidential Library. The company has a similar convertor station in the middle of the Oklahoma panhandle, where much of its wind power is coming from, and where the company was approved to be a utility.
“It looks like a substation, but it’s actually a fairly highly specialized facility which takes our electricity, which is direct current, and converts it to alternating current,” Skelly said.
The result, then, is that the AC electricity can be transmitted to local energy companies, giving power companies more opportunity to buy wind energy that can sometimes be cheaper than other power sources.
“Arkansas is buying around 250 megawatts of wind from Oklahoma and Kansas today,” Skelly said. “It will be able to double that.”
For perspective, Arkansas Electric Cooperatives Corp. currently receives about 51 megawatts of power from a wind farm in Kansas and intends to increase that to 201 megawatts by the end of this year. The company has access to about 3,000 megawatts of power total from all generation sources.
A single one-megawatt wind turbine can power, on average, 240 to 400 homes in the United States.
But still remaining is the question of whether the new station will mean the company will again attempt to become recognized as a utility, now that the project will affect Arkansans more directly. The company recently applied for utility status in Tennessee, through which the Plains & Eastern line will travel.
A spokesman for the company said the station “was a significant change in the scope of the project” that was “not initially intended” for it.
However, the company remained silent on whether it will try for utility status again. PSC records show no activity from Clean Line since it was denied in 2011.
However, Skelly did say that the company must complete its permitting process before considering approaching the PSC again.
Like other projects that have to be approved at multiple governmental levels, it takes years to complete.
“We’ve been doing this for about five years,” Skelly said.
A lot of the job, he said, is getting the word out about the job to county officials, state agencies and environmental groups to determine the route of the line.
“Because this is an interstate project, it has to go through the federal permitting process,” Skelly said. “We’re in the middle of that [process]. What it basically does is look at a series of routes, and we take all that information which our different stakeholders use to come up with a route.”
Currently, the U.S. Department of Energy is working with states and local agencies to gather input on the line’s proposed route.
The permitting process overall, Skelly said, is expected to conclude in spring 2015.
“We hope to break ground in a year after that — at some point in 2016,” he said. “This is like any large infrastructure project. It takes a long time to work through the issues and come up with a proper design and take into account the stakeholders’ interests. These things take a long time. As things go, we’re moving at a reasonable pace.”
When construction actually starts, the project is expected to generate some local economic activity in the state.
He said it would also indirectly create more work for wind industry companies in Arkansas — LM Wind Power, for example, which has a turbine blade manufacturing plant in Little Rock, could have more customers as more wind farms are built following the line’s completion.
“The wind energy associated with it … will facilitate the construction of another roughly $6 billion to $7 billion of new wind projects that cannot be built today,” Skelly said.
It will also create some construction jobs. About a year ago, Clean Line surveyed some of the proposed line areas and identified about 44 companies in the state that could be suppliers for the project. In particular, General Cable will supply all of the cable for the line.
General Cable, a publicly traded company based in Highland Heights, Ky., has a 330,000-SF factory in Malvern, where the 20 million linear feet of cable will be manufactured. According to General Cable, the job could be worth $100 million, depending on commodity prices.
“I think it’ll keep their factory humming for a year and a half,” Skelly said.
“We are keen for this project to create as many jobs as possible in Arkansas,” he said. “We’re fortunate that there are companies like General Cable who will make the wire right there in Arkansas.”
The job overall will be “pretty labor intensive,” Skelly said. “We’ll have hundreds of jobs building the line. In Arkansas, those are the direct impacts.”