Preliminary 50-Year net economic benefit of the Badger Coulee Transmission Line Project to ATC ratepayers
Future Scenario |
With MISO MVP Cost Sharing*
[$ - Millions - 2010] |
Without MISO MVP Cost Sharing
(Completed prior to MVP designation)
[$ - Millions - 2010] |
Robust Economy |
$962 |
$578 |
Green Economy |
$829 |
$446 |
Regional Wind |
$762 |
$379 |
Carbon Constrained |
$626 |
$242 |
Limited Investment |
$496 |
$112 |
Slow Growth |
$230 |
-$153 |
Robust Economy: High energy and peak demand rates and moderate wind generation expansion
Green Economy: High energy and moderate peak demand rates and high wind generation expansion
Regional Wind: Moderate energy and peak demand rates and high wind generation expansion
Carbon Constrained: Low energy and peak demand rates and moderate wind generation expansion
Limited Investment: Slightly below moderate energy and peak demand rates and low wind generation expansion
Slow Growth: Low energy and peak demand rates and low wind generation expansion
*The MISO Board of Directors approved the Badger Coulee project's Multi-Value Project (MVP) designation on Dec. 8, 2011.
These are preliminary results. ATC's planning analysis is an ongoing process, and ATC will provide updated results for this project as appropriate. ATC may also change its planning assumptions or methodology with respect to this project and any such change may alter the results of its analysis. ATC's definitive planning analysis will be set forth in its CPCN Application for this project.
May 23, 2011 |
MISO MVP cost sharing reduces the estimated $425 million Badger Coulee project costs for ATC ratepayers by approximately 85 percent. ATC studies project that current plausible futures would result in a net savings for ATC ratepayers as a result of completing the Badger Coulee project.
Badger Coulee Transmission Line Project economic analysis
A Strategic Flexibility methodology was utilized to set up the analytical framework of the economic analysis for the Badger Coulee Transmission Line Project. Strategic Flexibility is an analytical approach used to assist organizations in making major investment decisions in an uncertain environment. The premise of Strategic Flexibility is that, because we do not know the future, high-cost transmission projects should be tested against a range of plausible futures. These plausible futures are to bound the range of plausible outcomes, and not to identify the most likely future. The project is tested against each of the futures and should be chosen only if it is successful in most of the futures. The objective is to identify projects that are economically robust across a range of plausible futures.
ATC developed six scenarios that were designed to bound the range of plausible futures for the Badger Coulee project. Through this process, six futures were identified and developed so that they are sufficiently different from each other and would capture a wide range of plausible outcomes. ATC built the futures by identifying variables or drivers that would most impact the results of the Badger Coulee economic analysis and determining how those drivers would behave in each scenario. The plausible futures were designed to describe possible market conditions that could exist in 2020 and 2026.
The drivers identified by ATC are:
- Load growth inside and outside of the ATC footprint
- Total small coal retirements or conversions to natural gas within the ATC footprint
- Expected generation additions within the ATC footprint
- Amount and source of renewable energy consumed in Wisconsin
- Natural gas, coal and fuel oil prices
- Environmental regulations
- Applicable renewable portfolio standards in Wisconsin and regionally
- Nearby extra high voltage transmission projects and regional transmission overlays
- Expected generation additions outside the ATC footprint
Badger Coulee Transmission Line Project 2020 futures matrix (PDF)
Badger Coulee Transmission Line Project 2026 futures matrix (PDF)
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Arrowhead-Weston