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Study labels CapX2020 effort a success and model to follow

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Study labels CapX2020 effort a success and model to follow

CapX2020,the 11-utility effort that is building 800 miles of high-voltage transmissionlines across Minnesota and into neighboring states, is a model that otherindustry participants can follow for success, an academic study concluded.

The Universityof Minnesota's Humphrey School of Public Affairs in late April published astudy, led by Elizabeth Wilson, a professor of energy and environmental policyand law, reviewing the CapX2020 effort, launchedin 2004. The participating utilities, including investor-owned, municipal andcooperative utilities, are building four 345-kV lines and one 230-kV lineacross Minnesota and in bordering regions of North Dakota, South Dakota andWisconsin in the first major expansion of the regional grid since the 1970s.The last of the projects, with a combined estimated cost of $2.1 billion, areexpected to be completed and in service in 2017. They are both improvingreliability of the regional grid and providing access to new generationsources, including renewables.

"Thework of the CapX2020 group set a precedent for the way coordinated development,permitting, and construction of new high-voltage transmission lines should bedone," the study, based in part on interviews with 32 people — utilityofficials, regulators, engineers, grid planners, and advocates — said in itsconclusion. "As multistate transmission planning becomes increasinglycommon, it will serve as a successful example that other regional groups canfollow."

Fivekey characteristics, which the study said are similar to the "collectiveimpact theory" outlined in 2011 by consultants John Kania and Mark Kramerof FSG and published in the Stanford Social Innovation Review, have led to thesuccess of the CapX2020 effort.

One,participating utilities shared common goals. "In addition to thereliability needs, CapX2020 participants shared the need to meet staterenewable energy standards. They recognized that new high-voltage transmissionalso helped reduce the cost of complying with those requirements," thestudy said, noting the largest utility in the region, , could not financeand obtain permits for all of the segments on its own.

Two,participating utilities were willing to cooperate to achieve a common resulteven if, in some situations, not every participant benefitted equally. This wasimportant because the participants vary in size and business model.

Three,relationships between participants were enhanced. Utilities in the regionalready had a history of working together, but, the study said, "All theCapX2020 participants interviewed for this report agreed that the members trulyfelt a deep level of trust with one another. They called themselves a 'faith-based'organization — not in the religious sense — but rather in that they felt 'comfortablebeing uncomfortable' with each other. They built on and strengthened theirexisting relationships as they developed confidence in each other."

Four,participating utilities established a group governance structure, within alegal framework, that led to most decisions being made by consensus.

Finally,participating utilities were committed to transparency and engagement ofstakeholders. "Instead of operating in isolation, the group made it apoint to engage with stakeholders early and often. The strategy of getting outand meeting with as many different stakeholders as possible in as many placesas possible was part of the CapX2020 approach to hear and understand diversestakeholder perspectives," the study said. "In each of the fourstates where CapX2020 built transmission lines, robust public interaction alongwith a responsive regulatory process sensitive to public concerns enabled theCapX2020 projects to be successful."

Otherfactors that helped the CapX2020 effort succeed, the study said, werelegislation passed in Minnesota in 2005 that made investment in transmissioninfrastructure more appealing and the maturation of the 'splanning process. The latter led to two CapX2020 projects being designated asMISO multivalue projects, thus eligible for financing across the entire MISOregion.

TheCapX2020 participants, in their spring 2016 newsletter highlighting theUniversity of Minnesota study, also provided updates on the two remainingprojects. The last 38-mile segment of the Hampton-Rochester-LaCrosse , between Hampton and PineIsland in southeastern Minnesota, is scheduled to be energized in September,and 70 miles of 345-kV linebetween Big Stone City, S.D., and Brookings, S.D., are due to be energized in2017.

Alongwith Xcel Energy, participating utilities are the ,Dairyland Power Cooperative,Great River Energy,ALLETE Inc.subsidiary Minnesota Power Inc.,Minnkota Power Cooperative,Missouri River Energy Services,Otter Tail Corp.subsidiary Otter Tail Power Co.,Rochester (Minn.) PublicUtilities, the SouthernMinnesota Municipal Power Agency, and .