St. Paul, Minn. – The Minnesota Public Utilities Commission (Commission) approved the certificate of need and route permit for Minnesota Power’s high-voltage direct-current (HVDC) Modernization Project.
Commissioned in 1977, the existing 465-mile HVDC transmission system transports wind energy from North Dakota to Minnesota customers. The HVDC transmission lines and terminals require upgrades due to increased terminal outages and control system failures.
In Minnesota, the project will replace aging converter facilities at the Arrowhead Substation in Hermantown. The project will also construct three transmission lines, each less than a mile long, to connect the new converter station to a new substation and Minnesota Power’s transmission system. The project is approved with the option to increase capacity up to 900 megawatts (MW). Currently, capacity is at 550 MW.
The Commission agreed with the Administrative Law Judge’s findings that outages of the HVDC line impose costs associated with congestion, reserving transmission on another party’s system, replacement energy, and lost production tax credits. Assuming current failure rates, the estimated outage-related costs are at least $7 million per year and are likely substantially more.
“This existing transmission system is 47 years old and needs to be replaced. We also need to add new technology to ensure we have the necessary capacity now and into the future,” said Commissioner Hwikwon Ham.
In addition to replacing the existing HVDC terminal equipment, the project would include upgrading technology to support the reliable transition to clean energy. The project would also enable bi-directional line capability for flexible energy flow between the North Dakota and Minnesota terminals.
According to Ham, “The Commission is committed to its mission to improve the lives of all Minnesotans by ensuring safe, reliable, and sustainable utility services at just and reasonable rates. When we look at energy projects, we need to look holistically at customer energy prices. This project will bring cheaper renewable energy to Minnesota over the coming decades.”
HVDC lines are used to transport power over long distances. This line is one of the few HVDC transmission lines in the country. The company anticipates project costs between $600-940 million. Minnesota Power has secured state and federal funding to offset some of the costs. Construction could begin as early as 2024, with an in-service date between 2028 and 2030.
About
The Minnesota Public Utilities Commission regulates three cornerstone service industries in Minnesota's economy: electricity, natural gas and telephone. The Commission’s mission is to create and maintain a regulatory environment that ensures safe, adequate and efficient utility services at fair, reasonable rates consistent with State telecommunications and energy policies. It does so by providing independent, consistent, professional and comprehensive oversight and regulation of utility service providers. Learn more at mn.gov/puc.
