MidAmerican looks to become a player in wind sector

DES MOINES, IOWA - When MidAmerican Energy announced it would join the Midwest Independent Transmission System Operator effective September 1, the news didn't have the same impact on the public as if, say, Notre Dame had joined the Big Ten Conference.

MidAmerican's 770,000 customers in Iowa won't see a change on their bills, and the Des Moines utility promises that electric service will still be dependable.

But within the world of electric utility generators, transmission systems and wholesale power dealers, long-independent MidAmerican's move to join the Midwest transmission grid, commonly known as MISO, is a sign that utility plans to be a major force in wind energy.

"MidAmerican has the wind generation," said Robert Latham of Cedar Rapids, a consultant who helps municipal utilities and businesses buy wholesale electricity. "If it wants to truly be a national player in the new wind-based transmission system, it needs to be part of a regional transmission organization like MISO."

Latham notes that MidAmerican's embrace of MISO will simplify what has been a patchwork electricity grid in Iowa.

"For the first time, the entire state of Iowa will be in a single regional transmission authority, and that will help smooth out the flow of electricity, especially from western Iowa to eastern Iowa," he said.

The move will end decades of aloofness by the Des Moines utility and its predecessors, Iowa Power and Light Co. and CalEnergy, from MISO and predecessor regional transmission organizations.

MISO is a nonprofit consortium of electric utilities and independent generators and is one of eight such systems covering the United States. From control centers in St. Paul, Minn., and Carmel, Ind., MISO serves as the traffic cop for high-voltage movements of up to 131,306 megawatts of electricity between utility systems and entire states from central Canada through Iowa and Illinois to Detroit and Cleveland.

A megawatt can power 300 to 1,000 homes, depending on their size and the season.

MidAmerican won't have to build new transmission lines or connections. But it will have to do extensive information technology work before September 1 so its internal control systems can properly talk with the MISO systems.

The Des Moines utility stayed independent of transmission organizations for years because, blessed with a 30 percent surplus of generating power over its average daily demand, it really didn't need help in getting power to its customers in Des Moines, Sioux City, Fort Dodge, Waterloo, Iowa City and Davenport.

MidAmerican could afford to let other utilities in need of extra power, most notably Alliant Energy of Cedar Rapids, approach it to buy surplus power.

MISO this year opened an "ancillary services market," which is a trading platform that utilities use to buy electricity from one another. By joining the network, MidAmerican and its wholesale customers no longer have to pay MISO tariffs to move electricity on and off MidAmerican's transmission network.

"The new ancillary services market was an important factor in our decision to join MISO," said MidAmerican President Bill Fehrman.

Latham said MidAmerican's presence on MISO would help resolve a growing problem for Iowa's electricity grid: the need to move surplus electricity from MidAmerican's big generators in Council Bluffs and Sioux City into relatively electricity-poor eastern Iowa.

Most of MidAmerican's 1,300 megawatts of wind generation - ranking it No. 1 in wind generation among U.S. utilities - is also west of Des Moines.

"Alliant Energy and municipals in eastern Iowa that have needed electricity often have had to buy it more expensively from utilities outside of Iowa because MidAmerican and its wholesale customers had to pay the extra fees to move power onto the MISO system," said Latham. "Now, MidAmerican will be a member, and the power can move more smoothly and with less expense."

The more intriguing factor in MidAmerican's entry into MISO is the planning for major new transmission systems to carry wind power from the Plains to Chicago and points east.

President Barack Obama called for such a megaline in his Earth Day speech in Newton. Iowa Gov. Chet Culver heads a group of Midwestern governors calling for an expanded transmission system to carry wind power out of the Midwest to urban customers.

ITC Holdings Inc. in Michigan already has early approval from the Federal Energy Regulatory Commission to start raising money for what will be a $12 billion, 3,000-mile transmission line.

The line could carry 765 kilovolts of wind energy, double the capacity of the biggest lines now in Iowa, from the Dakotas to Chicago. ITC owns the transmission system that serves Alliant Energy's system in the eastern half of Iowa.

MidAmerican isn't sitting out the wind transmission game. It has formed a joint venture with AEP of Columbus, Ohio, to build and operate high-voltage transmission lines in Texas, Oklahoma and Kansas in the southern half of the Midwestern wind belt.

Fehrman sidestepped questions about a possible MidAmerican bid for a big transmission line through Iowa, but he said: "Until now, wind power has been thought of as something for local use. The industry now is thinking about ways to move wind energy long distances."