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Clean Line's Grain Belt hits snag as regulators delay decision

US transmission developer Clean Line Energy Partners’ 4GW Grain Belt Express mega-project has hit a potentially serious snag in Missouri, with state regulators reportedly waiting to make their final decision until the legal battle over an unrelated transmission project has been resolved.

A prolonged delay would be a big blow to the long-gestating Grain Belt project, because the scheduled phase-out of the wind production tax credit (PTC) would change the economics of some of the Kansas wind farms set to take advantage of the proposed 780-mile (1,255km) line.

“Any significant delay in issuing a decision could be a de facto denial of the application,” Clean Line wrote in a response to the Missouri Public Service Commission (PSC) last week.

Missouri the lone holdout

Grain Belt seeks to flow wind power from western Kansas – among the best places in North America to build wind farms – into Missouri and then over to the Illinois/Indiana border, where it could be sold into the vast PJM wholesale electricity market in the eastern US.

The project is at the vanguard of a bulge of proposed high-voltage direct current (HVDC) lines that are designed to bring wind from the central US to distant population centres hungry for low-cost renewable power, a number of them backed by Houston-based Clean Line.

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Grain Belt suffered a multi-year setback in 2015 when Missouri regulators rejected it, citing the lack of customers for the wind power in their state. The project is designed to deliver 500MW of power to Missouri and the remaining 3.5GW to states farther to the east.

But Clean Line resubmitted its application and has spent two years making the project more attractive to Missouri – including a 2016 announcement that a Missouri utility collective will buy substantial amounts of power off Grain Belt, saving its customers an estimated $10m each year. This week Clean Line added Columbia, Missouri's fourth most populous city, to the list of entities planning to buy power from Grain Belt.

Missouri is the only holdout among the four states Grain Belt would traverse, and the project hinges on the state PSC’s final decision on whether to grant the developer a so-called certificate of convenience and necessity (CCN), which would allow it to use eminent domain to obtain land if necessary.

Clean Line has said it hopes to avoid needing to use that power, and instead wants to come to terms privately with landowners.

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Clock ticking on the PTC

Clean Line had expected the Missouri PSC’s decision in May, and told Recharge earlier this year that that timing would still allow associated wind projects to quality for the PTC.

But last week the PSC said no decision has yet been made because another legal battle involving a transmission project in Missouri could potentially impact Grain Belt's fate, the Missouri Times reported.

Earlier this year a Missouri appeals court rejected the CCN that had been granted to the Mark Twain transmission project, backed by the Ameren Transmission Company of Illinois. That case may now be taken up by the state's Supreme Court.

Clean Line rejects the notion of legal overlap between the two projects.

In its response to the PSC, dated 1 June, Clean Line argues that there are “important substantive distinctions” between the two, and there is no “procedural or substantive impediment” to regulators making a decision on Grain Belt now.

Wind developers planning to make use of Grain Belt “must make substantial capital commitments in 2017 to begin construction on their wind farms in order to qualify for the currently available value of the federal PTC”, Clean Line notes.

“Because that value will decline in 2018, a lower production tax credit will increase the cost of that Missouri utilities pay for power delivered by the project."

Columbia's power-purchase agreement would see the city paying just $21/MWh for wind power brought to Missouri on the Grain Belt Express, with a 2% annual escalator, according to local press reports.

The transmission project would take two to three years to build, create 1,500 jobs during construction, and result in substantial amounts of work for local companies and manufacturers.

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