STATE OF MINNESOTA

ENVIRONMENTAL QUALITY BOARD

Northern States Power Company - Minnesota and Northern States Power Company - Wisconsin (collectively referred to as NSP) and Dairyland Power Cooperative (Dairyland) have proposed to construct a 230 kilovolt (kV) transmission line from the Chisago County substation in Minnesota to the Apple River substation near Amery, Wisconsin. The line would be approximately 38 miles in length, about 15 miles of which would be in Chisago County. The line would have to cross the St. Croix National Scenic Riverway.

The Power Plant Siting Act, Minn. Stat. §§ 116C.51-116C.69, requires a permit from the Minnesota Environmental Quality Board (MEQB) to construct a high voltage transmission line, i.e., one of over 200 kilovolts. Minn. Stat. § 116C.52, subd. 4 (1996). Before the MEQB can act on a request for a routing permit, the agency must prepare an Environmental Impact Assessment and conduct public meetings and hold a contested case hearing.

The contested case hearing in this matter was conducted by Administrative Law Judge Richard Luis. The hearing began on October 27, 1998, and ended on December 14, 1998, after 25 days of hearing. In addition, four evening sessions were held to afford the public an opportunity to comment upon the proposed project and ask questions of the MEQB staff and the applicants’ witnesses. More than 300 exhibits were introduced into the record. Approximately 6500 pages of testimony by witnesses were transcribed.

In this Memorandum, the MEQB staff discusses the applicable law, including the Power Plant Siting Act and the Minnesota Environmental Rights Act and Environmental Policy Act. The staff also discusses the major issues that are presented in this hearing.

The Power Plant Siting Act provides, "No high voltage transmission line shall be constructed except on a route designated by the board." Minn. Stat. § 116C.57, subd. 2 (1996). That same statute provides, "A utility shall apply to the board in a form and manner prescribed by the board for a permit for the construction of a high voltage transmission line." A high voltage transmission line (HVTL) is one that is designed for and capable of operating at 200 kilovolts or more. Minn. Stat. § 116C.52, subd. 4 (1996).

The Minnesota Supreme Court has recognized the authority of the MEQB to require a permit to construct a HVTL. See People for Environmental Enlightenment & Responsibility (PEER), Inc. v. Minnesota Environmental Quality Council, 266 N.W.2d 858 (Minn. 1978) and No Power Line, Inc. v. Minnesota Environmental Quality Council, 262 N.W.2d 312 (Minn. 1977). See also Floodwood-Fine Lakes Citizens Group v. Minnesota Environmental Quality Council, 287 N.W.2d 390, 397 (Minn. 1979) (a power plant siting case).

The definition of high voltage transmission line also includes "associated facilities" within the definition. The MEQB has provided in its definition of high voltage transmission line that "Associated facilities shall include, but not be limited to, insulators, towers, substations, and terminals." Minn. Rules part 4400.0200, subp. 8. NSP is proposing to build a new substation, which NSP calls the Lawrence Creek Substation, in Chisago County as part of this project. Any permit issued by the MEQB for a HVTL will have to also authorize construction of a new substation at a particular location as part of this project in order for NSP to be authorized to construct the substation.

If NSP and Dairyland were to choose to build a transmission line of less than 200 kV, then a permit from the MEQB would not be required. However, in that event, local government would have zoning ordinances and conditional use permit requirements that would come into play and local approval would be required. Various federal agencies would also continue to have authority over any crossing of the St. Croix River and perhaps other rivers. Other state agencies, such as the Department of Natural Resources, might also have jurisdiction over such crossings.

As part of their application, Northern States Power Company and Dairyland Power Cooperative identified several possible routes between the Chisago substation and the St. Croix River, satisfying the requirement to propose at least two routes. See Minn. Stat. § 116C.57, subd. 2 and Minn. Rules part 4400.0600, subp. 1. Indeed, there are a large number of combinations of route segments that could be chosen between the Chisago County substation and the St. Croix River to comprise a complete transmission corridor. The applicants identified 27 possible route segments and the MEQB added another 12.

Further, the MEQB identified three other possible corridors, called System Alternatives since they don’t involve a Chisago County--Apple River corridor, to be evaluated in the Environmental Impact Assessment and considered in the hearing. See Exhibit 10. These System Alternatives are Rock Creek to Apple River, Arrowhead to Arpin, and the King Plant to Eau Claire. In addition, the MEQB must also evaluate alternatives to transmission for supplying power to the areas affected. The alternatives identified during the development of the EIA and at the hearing are generation and demand side management, including conservation. Finally, the no-build alternative must also be considered. No-build is essentially a decision that the transmission line is not needed.

All of these alternatives -- the Chisago line and all its possible routes, the System Alternatives, generation, conservation, and no-build -- must be considered in reaching a decision on whether to issue a permit and if so, for what route. However, whether or not the MEQB could issue a permit for construction of a facility at the end of this process depends on the final decision that is made.

For example, if the MEQB were to approve a Chisago to Apple River transmission line, the Board could select any one of the possible routes between those two points that have been identified, regardless of whether NSP and Dairyland have sought approval for those routes. The Power Plant Siting Act authorizes the MEQB to select which route to approve. Minn. Stat. § 116C.57, subd. 2 (1996) provides that "the board shall decide in accordance with the criteria and standards specified in section 116C.55, subdivision 2, and the considerations specified in section 116C.57, subdivision 4, which proposed route is to be designated." (Emphasis added.) The MEQB’s authority is broad enough to allow the Board to select a route that was not the choice of the applicants.

However, if the MEQB determines that the Chisago to Apple River route cannot be approved, because one or more of the System Alternatives is preferable under applicable law, then the MEQB can only deny NSP’s and Dairyland’s permit application. The Board cannot approve one of the System Alternatives as a part of this process. This is because there has not been complete compliance with the requirements of the Power Plant Siting Act with regard to the System Alternatives. For example, the Act requires the MEQB to hold a hearing in each county where the transmission line would traverse. Minn. Stat. § 116C.58 ("The board shall hold at least one public hearing in each county where a site or route is being considered for designation pursuant to section 116C.57.") The Board has not held a public hearing in the counties that the System Alternatives would traverse. Nor has the Board examined any specific routes on the Minnesota side of any of the System Alternatives. Nor have the applicants submitted at least two proposed routes between the end points, as they are required to do. Minn. Stat. § 116C.55, subd. 1. Further, a more detailed analysis of environmental impacts of the System Alternatives would be required before any routes could be sited. See PEER, 262 N.W.2d at 871 ("[B]efore it can choose between Route 3 and Route 7, it will have to produce an adequate EIS that can play a meaningful role in helping it to reach its ultimate decision.") For all these reasons, the MEQB could not permit one of the System Alternatives as part of this process, and NSP and Dairyland would have to reapply if they wanted a permit to build one of the System Alternatives.

If there is no need for the line, then, of course, the no-build option would be the choice and no permit would be issued. Similarly, if generation is a preferable option for reasons determined by the Board, then here too no permit for a HVTL would issue. However, the MEQB would not be able to issue a permit for a power plant as a part of this proceeding because NSP would have to submit an application for such a facility (assuming it was of a size that was within MEQB jurisdiction, greater than 50 MW) and the Power Plant Siting Act requirements would have to be followed. Indeed, on the facts in this record, it is possible that any new generating plant that NSP might build to serve local needs would be located in Wisconsin, in which case Minnesota authorities would not have jurisdiction.

Although the MEQB can determine the appropriate route for a new HVTL, the MEQB does not have authority to order a utility to build a particular transmission line. If the Board should reject a utility’s application for a preferred route, and issue an a permit for an alternative route, the utility could simply decide not to build the line. There is nothing in the Power Plant Siting Act that requires a utility to build a transmission line it does not want to build.

Minn. Stat. § 116C.53, subd. 1 (1996) establishes the general State policy for choosing transmission line routes. That statute provides:

In addition to this language from the Power Plant Siting Act, both the Minnesota Environmental Rights Act (MERA) and the Minnesota Environmental Policy Act (MEPA) apply to transmission line routing decisions. In the PEER case, the Minnesota Supreme Court said:

PEER, 266 N.W.2d at 865.

What the Environmental Policy Act and the Environmental Rights Act provide is that the State may not issue a permit for a project that would cause pollution, impairment or destruction of natural resources unless there is no feasible and prudent alternative to the project. Minn. Stat. § 116D.04, subd. 6 (1998) provides:

See also Minn. Stat. § 116B.04 (1998).

The Supreme Court also recognized in PEER that every HVTL is going to cause degradation of natural resources. Id., at 867, fn. 12 ("In its brief, the MEQC conceded that the construction of a HVTL would cause environmental damage wherever it were located. This was also recognized by the drafters of the PPSA.") In this case it is readily apparent that a 230 kV HVTL that would cross a wild and scenic river is a project that would cause pollution, impairment or destruction of a natural resource. No one should seriously question such a finding.

The question, then, is whether there is a feasible and prudent alternative to the Chisago line. NSP and Dairyland have the burden to show that there are no feasible and prudent alternatives. Opponents to the line, like the Concerned River Valley Citizens group and the Route Advisory Task Force and the cities, do not have to show that there is a feasible and prudent alternative. Once it is shown that an action will cause pollution, impairment or destruction of natural resources, the proposer of the action

Minn. Stat. § 116B.04 (1998). See also PEER, 266 N.W.2d at 867.

"Feasible and prudent alternative" is not a term that has been directly defined by the courts, nor is there a definition in the statutes. Essentially what is required under MERA and MEPA is that the MEQB must seek to minimize environmental impacts. As the Supreme Court said in PEER, "Implicit in the operation of MERA is the principle that environmentally damaging action cannot be taken if there is another, less damaging way to achieve the desired result." 266 N.W.2d at 873. If there is a less environmentally harmful way of satisfying electrical energy needs in the areas affected, the MEQB is required to reject the more damaging proposal.

It is not easy to determine whether there are any feasible and prudent alternatives to a proposal that will cause pollution, impairment or destruction of Minnesota’s natural resources. The following guidance from the Minnesota courts will assist the ALJ and the Board in conducting their analysis of the record:

The Supreme Court said that the Power Plant Siting Act and the environmental laws must be read together to "harmonize the need for electric power with the equally important goal of environmental protection." PEER, 266 N.W.2d at 865. If there is no need for a new transmission line, the law would command that the damage to the environment that would be caused by the line be avoided by not building the line.

In this case a Certificate of Need from the Minnesota Public Utilities Commission is not required because the line is too short in Minnesota (14 miles). The PUC has jurisdiction over 230 kV transmission lines only if they are 25 miles long or longer within Minnesota. Minn. Stat. §§ 216B.2421, subd. 2(b) and 216B.243 (1998). Therefore, need is a legitimate question for the MEQB to consider.

The question of need in this case goes to two points. The first is whether there is a need for a new transmission line to solve local energy needs. NSP and Dairyland have touted the new line solely for solving the local demand for more power in Northwestern Wisconsin and eastern Minnesota (Chisago County, Minnesota). If the need does not exist, the no-build alternative would be a feasible and prudent alternative that would avoid the environmental consequences of the proposed line.

The second issue that requires consideration relates to the fact that a transmission line to transfer bulk power from Minnesota to eastern Wisconsin is likely to be built in the foreseeable future. NSP and Dairyland claim in this proceeding that the demand for bulk capacity is not driving this project, but the MEQB cannot ignore the fact that another transmission line is likely to be constructed in the near term that could serve the needs of customers in Northwestern Wisconsin. It is entirely within the MEQB’s directive to consider the possibility that a second HVTL may have to be constructed in the near future if the Chisago line is approved, and to consider whether building one line to serve both purposes would minimize the environmental impact.

In the PEER case the Court said:

PEER, 262 N.W.2d at 868. Therefore, the Administrative Law Judge and the MEQB must be cognizant of which routes and which System Alternatives utilize existing rights-of-way.

It is not just transmission line rights-of-way that should be considered, but also other types of utility rights-of-way like highways and pipelines. The use of any of these existing utility rights-of-way is to be preferred to the creation of an entirely new corridor.

Minnesota law also requires that the MEQB not balance the impacts of one route against the impacts of another route. Some considerations are more important than others. The PEER court said that MERA "permits balancing only when one potential route will cause greater environmental and another greater human noncompensable damage." 266 N.W.2d at 870. For example, with regard to nonenvironmental factors, it is only those noncompensable factors that should be balanced against environmental impacts. Loss of residences are compensable, and must give way to environmental impacts like those on lakes or forests.

The Supreme Court in PEER explained how the Board is to consider the various factors associated with each possible route.

PEER, 266 N.W.2d at 869-70 (footnote omitted). See also State by Archabal v. County of Hennepin, 495 N.W.2d 416, 422 (Minn. 1993) and State by Powderly v. Erickson, 285 N.W.2d. 84, 88 (Minn. 1979).

Also, economic factors alone will not justify the selection of a route. Minn. Stat. §§ 116D.04, subd. 6 and 116B.09, subd. 2 (1996). In fact, both statutes recognize that the protection of the environment is of "paramount" concern. Paramount means "superior to all others." Floodwood-Fine Lakes, 287 N.W.2d at 399.

The MEQB has the authority to include necessary and reasonable conditions in any transmission line construction permit that it issues. The Power Plant Siting Act provides, "When the board designates a route, it shall issue a permit for the construction of a high voltage transmission line specifying the type, design, routing, right-of-way preparation and facility construction it deems necessary and with any other appropriate conditions." Minn. Stat.

§ 116C.57, subd. 2 (1996). The MEQB by rule has provided, "The permit may specify conditions for construction, right-of-way restoration, abandonment, maintenance, and any other conditions relevant to minimizing human and environmental impact the board considers necessary." Minn. Rules part 4400.1400.

Any permit issued in this proceeding would do more than just simply specify a route. It would contain numerous other conditions. Obvious examples of permit conditions would include the type of towers to be constructed along the line and whether the line was above ground or below ground. The crossing of the St. Croix National Scenic River would be an important issue to address in any permit authorizing a crossing of the river. More generally, any route permit would impose construction mitigation practices and reporting requirements. There would be boilerplate conditions regarding modification and compliance and periodic review. As long as the record supports the condition, the MEQB can include in its permit appropriate conditions to protect public health and the environment.

As part of the route selection process, the MEQB was required to prepare an Environmental Impact Assessment. Minn. Rules part 4400.1210, subp. 1. An EIA is similar to an Environmental Impact Statement and satisfies the requirements for environmental review of a proposed high voltage transmission line project. See Minn. Rules part 4410.7400 B.

In this case a draft EIA was made available to the public on September 8, 1998. Public meetings on the draft EIA were held on October 12 and 13, 1998. Numerous comments were submitted by the public during the comment period. The comment period continued through the end of the hearing - December 14, 1998. The staff has now completed a revised EIA by responding to the comments that were received and discussing new information that has become available since September 1998.

The MEQB has to ultimately determine whether the EIA is adequate. Minn. Rules part 4400.1210, subp. 6. This has to be done before the Board can issue a routing permit. While the entire EIA material has been included in the record of the contested case hearing, the adequacy of the EIA is not a matter for the Administrative Law Judge to determine. The ALJ could express an opinion on the adequacy of the EIA but it is not required.

The Administrative Law Judge has recognized that the first issue to be addressed is whether an additional transmission line from Minnesota to Wisconsin is needed to serve the local demand for power. If there is not a need for a new transmission line, because the need is not shown, or if other less environmentally damaging alternatives can supply the necessary power, then a permit for a new high voltage transmission line should not be issued.

Northern States Power Company and Dairyland Power Cooperative have stated that the reason this 230 kV line from Chisago to Apple River is needed is because there is demand for additional power in Northwestern Wisconsin and Chisago County, Minnesota, and the applicants cannot reliably meet the peak demand with existing facilities. The applicants have suggested that if the Chisago to Apple River transmission line is not approved, and the line is not built within a year or two, that customers in Northwestern Wisconsin may experience low voltage and perhaps even blackouts under single contingency situations, such as the loss of the Stinson substation or the Cornell to Holcomb 115 kV line. See Gonzalez, Tr. Vol. 5A, at 23.

Electrical demand is growing in Northwestern Wisconsin and Chisago County. NSP and Dairyland do have to address the issue of what to do to satisfy electrical demand in these areas in the future. But the ALJ and the MEQB must examine whether the situation is as immediate as the applicants maintain. Two aspects affect the immediacy of the situation: (1) the peak customer demand for power, and (2) the load serving capacity of the existing transmission system in the area.

The customer demand and the load serving capacity are important because they determine whether the utilities can reliably supply the electricity that is being demanded. If the demand is less than anticipated, or the load serving capacity can be increased by operational variables or other methods, then the construction of new facilities can be postponed. Timing is important because it determines whether the MEQB must decide today whether to authorize the construction of a new transmission line, or whether there is time for the Board to gather additional information and make a more informed decision. If a decision can be put off for a couple of years, the Board will be able to take into account developing events such as the deregulation of the utility industry and the construction of a HVTL to provide for the bulk transfer of electricity from Minnesota to eastern Wisconsin.

According to the applicants, the area of Wisconsin with the greatest need for additional load serving capacity, and the area focused on throughout the hearing, is the Northern Area. Because the demand in the Northern Area seems to be driving this matter, we turn first to an analysis of the situation in that part of the state.

A. Northern Area

In the staff’s view, NSP and Dairyland have overstated the severity of the situation in the Northern Area. The situation is not as desperate as the applicants would portray. There are at least two reasons for this. One, the forecasts made by the applicants are not holding true. Peak demand has been less than what the applicants have predicted. Two, the load serving capacity of the transmission system is higher than the applicants would assert. NSP and Dairyland can handle a larger demand for power, under a single contingency outage, than the applicants claim. Each of these factors is examined in detail below.

In their application, which was submitted in the fall 1996, NSP and Dairyland claimed that they would see a 3.5% annual growth rate in peak demand in the Northern Area from 1996 to the year 2000, and then a 1.5% growth rate after that. On the basis of that forecast, NSP and Dairyland predicted that the peak demand in winter 1997-98 would be 285 megawatts, in 1998-99 would be 295 megawatts, and in the year 2000 in the Northern Area, the peak demand would reach 316 megawatts. See Table 2-2 of the Application.

The actual peak demand in winter 1997-98 was 261 megawatts; the peak demand in January 1999 was 270 megawatts. See Table 4-1 in the revised EIA (Exhibit 12A). The actual data from the last few years indicate that NSP’s forecasts have overstated the peak demand for electricity in the Northern Area. NSP shrugged off these over zealous forecasts by stating that the forecasts are not important because the demand for the new line is there regardless of what the forecasted rate of growth is. See Gonzalez, Tr. Vol. 5A at 35. See also the prefiled testimony of David Barger of the Wisconsin Public Service Commission staff, Exhibit 106 at 12. However, the rate of growth does affect how soon the situation in the Northern Area becomes critical.

The applicants’ forecast is quite a bit higher than what was forecast in the Wisconsin Advance Plan 7 and Advance Plan 8 documents. Advance Plan 7 had a forecasted growth rate of 1.3% and Advance Plan 8 had a forecasted growth rate of 1.6%. Gregory Booth, the MEQB’s and Department of Public Service’s consultant, thought that NSP’s forecasts were simplistic and arbitrary. See the Booth Report, Exhibit 21. The actual growth from winter 1990-91 to winter 1998-99 was 1.8%. See Table 4-1 of the revised EIA.

In making forecasts, not only does the predicted increase affect the peak demand, but the historic peak demand used for the base year also affects the outcome. Here, if we use the actual peak demand of 270 MW for the year 1998-99, and predict peak demand in the future using the growth forecasts from the Wisconsin Advance Plans (the applicants predict only a 1.5% growth rate after the year 2000), we see the following results.

The Northern Area is a winter peaking area because of the cold weather. A colder winter than normal could result in a rise in the peak demand of about 4%. This would mean an increase of about 12 MW in the demand over the numbers shown above. Other cold winter numbers are shown in Table 4-4B of the revised EIA at page 10 of Section 4.

We can now turn to a discussion of the critical load level to see in what year the peak demand in the Northern Area is likely to reach the critical load level.

The critical load level was defined by NSP witness Richard Gonzalez as follows:

Tr. Vol. 5A at 21. The critical load level is normally expressed in megawatts. The critical load level is also referred to as the load serving capacity.

Mr. Donald Jones prepared a chart during his testimony to illustrate the critical load level in the Northern Area under various scenarios. Exhibit 73. With the Stone Lake to Bay Front line in operation, and reasonable generation at Bay Front, and the Stinson trip available, the critical load level in the Northern Area, according to Mr. Jones, is 308 MW. An additional 20 MW of generation is available at the Bay Front plant, although NSP does not like to use that generation because it is expensive. Exhibit 83 at 8-9. Assuming 308 MW is the critical load level, it is several years before that high a peak demand is likely in the Northern Area. According to Table 1 on page 15 of this brief, a 308 MW peak demand is not anticipated until at least 2007.

However, even 308 MW is not the most accurate figure for the critical load level in the Northern Area. NSP recently provided the MEQB staff with a revised Northern Area Protection Curve with the Stone Lake to Bay Front line in operation. This curve shows that the critical load level for the Northern Area is 326 MW with full generation. See revised EIA at Table 4-3B and pages 6-8 of Section 4. Using the forecast data shown in Table 1 on page 15 of this brief, it is more than ten years before a peak demand of 326 MW is expected.

The demand and the critical load level can be used to calculate the number of hours customers in an area are at risk of losing power in any given year. It is only if an outage of a transmission line or other equipment should occur (the so-called single contingency) at the identical time the demand exceeds the load serving capability, that low voltage or a blackout would occur.

The most recent Load Duration Curve provided by NSP and Dairyland is for 1995 and is reprinted in Figure 4-1 of the revised EIA. This Load Duration Curve was scaled up by the MEQB staff using various peak loads above 271 MW. See Figure 4-2 of the revised EIA. According to these scaled-up curves, the number of hours that the demand in the Northern Area is likely to exceed 281 MW (the critical load level according to the applicants, using only economic generation in the area) in a year is 35 hours at a peak demand of 310 MW. What can be concluded from this analysis is that the situation in the Northern Area is not as desperate as NSP and Dairyland have projected.

We turn next to a brief analysis of the situation in the other areas to be served by the Chisago line.

B. Northwestern Area, Western Area, and Eastern Minnesota.

The situations in these areas were considered during the hearing to be less critical than the situation in the Northern Area. While other parties may address the forecasts and critical load levels in these areas in more detail in their briefs, the staff only offers the observation that if the local need is to be the driving force, and the desire to provide for the bulk transfer of power to eastern Wisconsin is not a factor in providing power in these local areas, then each area can be addressed on its own merits. A single solution for all four areas may work to satisfy electrical power demands, but it is not mandatory to select a single transmission line to solve the demand for power in all four areas. Certainly the demand in Chisago County can be addressed without crossing the St. Croix National Scenic Riverway with a HVTL.

While NSP and Dairyland recognize that the Chisago project would provide some incremental benefit in transferring power from Minnesota to eastern Wisconsin, they assert that the reason the Chisago to Apple River line is needed is to address the local demand for power in Northwestern Wisconsin. See prefiled testimony of Donald Jones, Exhibit 70 at 11, of Bruce Staples, Exhibit 79 at 5, and of Rick Gonzalez, Exhibit 83, at 37. See also Jones, Tr. Vol. 3A at 51-52 and Gonzalez, Tr. Vol. 5A at 92-93. NSP does concede the likelihood of the extension of the line (probably Barron to Osprey) if this first segment is approved. See Gonzalez, Tr. Vol. 5A at 104. The staff of the Wisconsin Public Service Commission recognize that local needs are the "dominant reason" for pursuing the Chisago project. See David Barger, Tr. Vol. 6A at 51-52.

But the issue for the ALJ and the Board is: if another high voltage transmission line is to be constructed and this other line will do what the Chisago line is designed to do and provide for the bulk transfer of power to eastern Wisconsin, is there a need for the Chisago line? Why build two power lines over the St. Croix National Scenic Riverway if one line will suffice?

The evidence in the hearing record establishes that sometime in the near future some utilities will seek approval to build one or more high voltage transmission lines to transport electricity from Minnesota and other points west into eastern Wisconsin. This need for bulk transfer of up to 3000 MW (2000 MW from one direction, 1000 MW from another) of power to eastern Wisconsin is discussed in the Wisconsin Report to the Legislature, Exhibit 74, and in the WIREs Report, Exhibit 81. WIREs is called the Wisconsin Interface Reliability Enhancement study group. The WIREs group is a subcommittee of the Wisconsin Reliability Assessment Organization (WRAO). WRAO was an ad hoc group of utilities and public power agencies in Wisconsin that organized in 1997 to contend with reliability problems associated with outages of nuclear power plants. WRAO’s members include all the investor owned utilities in Wisconsin, members of the Wisconsin Public Service Commission staff, several municipal and cooperative utilities, and a few utilities from surrounding states. See the MAPP Regional Plan dated November 1, 1998, Exhibit 226 at 52.

About fifty different possibilities for transmission were initially investigated by Wisconsin. See Exhibit 74 and Exhibit 226 at 53. These possibilities have been narrowed down to 12 options. These options have been described in a number of documents and were discussed at some length during the hearing. See Exhibit 74 at 81 and Exhibit 226 at 54.

One of the so-called finalists for this bulk transfer line is a 345 kV line along the same Chisago to Apple River corridor that is proposed for the 230 kV line and then continuing on to eastern Wisconsin. Another possibility is essentially the Arrowhead System Alternative, although the line runs from the Arrowhead substation near Duluth to the Weston substation in central Wisconsin rather than to the Arpin substation. In addition to the 12 options described in these references, two other possibilities are under consideration -- a 230 kV line from Chisago to Weston, and a 345 kV line from King to Weston. See Exhibits 122 and 123 and Barger, Tr. Vol. 7A at 65-66.

Each of the 12 options assumed the Chisago-Apple River 230 kV line was in service. See footnote 5 to Table ES1 in the Report to the Legislature, Exhibit 74. However, that does not mean that the Chisago-Apple River line has to be built, or that this is the line the WIREs group will recommend; it simply means that in order to evaluate the electrical performance of each of the options, the Chisago to Apple River line was assumed to be in service in order to eliminate the local needs from the analysis. See Exhibit 226 at 54 ("The Chisago County - Apple River 230 kV line was included in the base case model to solve local area problems so that it would be clear that subsequent problems would be only due to increased transfer capability.")

The WIREs group is continuing its work in evaluating the various options. The WIREs group reported to the Wisconsin Reliability Assessment Organization (WRAO) early in April with its evaluation of the options. WIREs prepared a summary technical and cost report and an environmental report. These documents are publicly available but have not been included in this hearing record yet. WRAO has not yet released any report or made any recommendations on which line to promote but the WRAO draft report is expected in May, with a final report and recommendation by early in June. The MEQB believes that any report from WRAO must be made available to the Minnesota Environmental Quality Board before the Board makes a final decision. The parties will have to discuss how to arrange for inclusion of these documents in the record.

In December, 1998, Minnesota Power Company advised the MEQB staff that the company would be applying for a routing permit for a 345 kV line from Arrowhead to Weston. A copy of a letter from Minnesota Power Company to John Hynes at the MEQB dated December 11, 1998, was provided to the ALJ on February 22, 1999. See Exhibit 293. An application for authorization to build the line is expected by the MEQB in the next few months.

The ALJ should consider, as the Board will, whether it is advisable to make a decision on crossing the St. Croix River when a second decision on routing a HVTL is imminent. Gregory Booth’s words are worth repeating here:

Exhibit 30, at 10 (emphasis added).

While it may indeed be the applicants’ position that the Chisago to Apple River line is intended primarily to serve the local needs of Northwestern Wisconsin, the fact that another line from Minnesota to eastern Wisconsin to provide for the bulk transfer of electricity is likely to be built in the near term should be factored into the equation. The Power Plant Siting Act provides that in routing an HVTL the MEQB should consider "the future needs for additional high voltage transmission lines in the same general area as any proposed route, and the advisability of ordering the construction of structures capable of expansion in transmission capacity through multiple circuiting or design modifications." Minn. Stat. § 116C.57, subd. 4(10) (1998). If another HVTL should be required to provide for the bulk transport of energy, and such a line would also satisfy the local needs in Northwestern Wisconsin, the need for the Chisago to Apple River 230 kV line might not be demonstrated. The MEQB should consider whether it would be prudent to approve a high voltage transmission line crossing the St. Croix River near Taylors Falls when the need for the line may be satisfied by another line that will be built anyway in the next few years.

Minnesota law requires the MEQB to consider whether there are any feasible and prudent alternatives to new transmission lines that do not have the adverse human and environmental consequences associated with a high voltage transmission line. One possible alternative to the Chisago transmission line that may have less environmental impacts than crossing the St. Croix National Scenic Riverway with a HVTL is the installation of new generating units to serve the affected areas.

The possibility of installing additional generating capacity to serve Northwestern Wisconsin has not been examined in great detail by the applicants. Only two sentences in the application were devoted to additional generation in the Northern Area. Exhibit 1A at p. 2-19. The applicants concluded that at least two generators would be required in the Northern Area and additional transmission lines would be necessary. Id. In the other three areas, the applicants did say in their application that generation was "possible," but they summarily rejected generation because generation in one area would not address the need in the other areas. See id. at sections 2.2.8.5, 2.3.8.5, and 2.4.8.5. NSP did provide additional information about generation in response to requests by the Minnesota Department of Public Service, see Attachments 3-5 to the prefiled testimony of Richard Gonzalez, Exhibit 83, but the applicants may have been too quick to discard the generation option. A discussion of generation is included in the revised EIA at Section 5.3. Generation is worthy of more careful examination than the applicants have given it, particularly since they rejected generation before the Stone Lake to Bay Front line was approved.

There are a number of aspects involving generation that deserve analysis. First, the costs of generation have not been addressed in detail. NSP asserts that the cost of generation was a decisive reason for rejecting it. Jones, Exhibit 70 at 12 and Gonzalez, Exhibit 83 at 31. But the details on the cost of generation are sketchy. Mr. Jones said that he is "not aware of a cost figure that I can refer you to." Jones, Tr. Vol. 3A at 49. Mr. Hynes testified that the costs of generating facilities are coming down. See Hynes, Tr. Vol. 20B at 44-47. See also the prefiled testimony of David Blecker, Exhibit 197 at 89. A more detailed analysis of the costs of generation might show that generation is not more expensive than transmission alternatives.

Second, the applicants initially claimed that any power generated from a new facility, particularly one in the Northern Area, might become trapped and would not be capable of being transported to other areas. See prefiled testimony of Rick Gonzalez, Exhibit 83, Attachment 3 and Exhibit 101. But this concern is alleviated to a great extent by the construction of the Stone Lake to Bay Front line, which will allow for the transport of as much as 150 to 225 MW of power from new generation in the north. See Gonzalez, Tr. Vol. 5B at 64-65. Further, this argument ignores the possibility of installing more than one generating unit in various locations in Northwestern Wisconsin. There is no reason to think that a generating unit at the Wheaton plant near Eau Claire would be trapped, for example.

Third, there are more generating options available for consideration than simply installing new baseload plants to serve Northwestern Wisconsin. One generation option, for example, may be the installation of peaking units in the various areas of Wisconsin. The applicants have not given much thought to installing a small (perhaps 30 MW) peaking plant in any of the affected areas. See Gonzalez, Tr. Vol. 5A, at 70-72. Gregory Booth agreed that generation was not a complete substitute for transmission, but he recognized that the applicants had not explored the possibility of installing peaking plants. Exhibit 21 at 25-27. The installation of a 30 MW peaking unit in Northwestern Wisconsin, or several peaking units around the region, could indeed postpone the need for new transmission lines into the area. Such an approach could be cost effective. This option has not been investigated in enough detail to determine the environmental and electrical impacts of such an approach. The MEQB has discussed the possibility of installing two 65 MW units in the Northern Area. See page 4 of Section 5 of the revised EIA (Exhibit 12A).

Another aspect of new generation that has not been examined in any detail is the effect new baseload plants in other locations in Wisconsin will have on the load serving capability in Northwestern Wisconsin. Over 1200 MW of generation has been approved by the Wisconsin Public Service Commission. Some of these units are expected to be online by the end of 1999, and the rest by the end of the year 2000. See prefiled testimony of David Barger, Exhibit 106 at 13-14. Neither Wisconsin regulators nor the applicants have analyzed what effect these new generating units may have on satisfying the increasing demand for power in Northwestern Wisconsin. Mr. Gonzalez testified, "We have a saying -- all the generators serve all the loads." Tr. Vol. 5A at 56. Construction of a new generating plant does produce electricity that can be introduced into the overall transmission system. See the Mid-Continent Area Power Pool (MAPP) map, Exhibit 71.

Finally, the record shows that NSP is planning on the installation of several new generating facilities in the immediate future. NSP does not intend to build these facilities itself, but to bid them out. NSP indicates that it may bid out as much as 1200 MW in 1999. See NSP’s 1998 Resource Plan, Exhibit 172 at 8, Table I-3. There is no discussion in the record, however, whether any of these facilities could be located in Northwestern Wisconsin to meet peak demands in the region or at least postpone the need for additional transmission lines.

Generating facilities are not environmentally benign, of course. There is not much information in the record to compare the impact of any size generating plant with the various transmission lines under consideration. However, peaking plants are often natural gas fired, which would minimize environmental impacts. Also, the 1200 MW of new generation that Wisconsin authorities have approved are already under construction, and the various new facilities under consideration are likely to be built somewhere, regardless of whether a transmission line crosses the St. Croix National Scenic Riverway or not. The ALJ should give careful consideration to whether generation is a feasible and prudent alternative to a new transmission line that would result in less environmental impacts.

Another alternative to transmission that many persons asked about at the hearing but which does not appear to eliminate the need for more power to Northwestern Wisconsin is conservation. See testimony of Brian Zelenak, Tr. Vol. 2D at 178-187 and Neil Kennebeck, Tr. Vol. 3A at 221-224. Co-generation at industrial facilities was considered only in passing. See e.g., Tr. Vol. 3A at 225-226. While conservation and co-generation may not eliminate the need for new transmission facilities, demand side management will continue to be an element of the mix in planning for reliable energy in the future. See the Route Advisory Task Force Report, Exhibit 231 at 27 ("Another way to redefine the problem is to incorporate components of conservation, generation, transmission and distribution into an integrated state or regional energy plan for the first half of the 21st century.")

If it is determined that a new transmission line is needed quickly, and options for new generating facilities are not feasible and prudent alternatives, and waiting for the proposed location of a bulk transfer line to be identified is not appropriate, the ALJ will have to recommend, and the Board will ultimately have to decide, which of the four System Alternatives (Chisago, Arrowhead, Rock Creek, or King) is the least environmentally damaging. Every one of the System Alternatives would cross the St. Croix National Scenic Riverway. The decision on where to cross the St. Croix River is the most crucial, and the most decisive, decision that has to be made. Once a crossing is identified, the System Alternative is also determined. Because the river crossing issue is so important, we turn to that first.

A. The Crossing of the St. Croix National Scenic Riverway.

Each of the four System Alternatives would have to cross the St. Croix National Scenic Riverway. Of course, each Alternative would cross in a different location.

Three possible crossings have been identified for the Chisago Alternative: the north crossing just south of the Wild Mountain Ski Area, the dam crossing at the hydroelectric plant in St. Croix Falls, Wisconsin, and the south crossing at the Viking Pipeline crossing. See Exhibit 1 at 3-10 and 3-11 and Exhibit 12 at pp. 64-67 of Section 6. These crossings are all relatively close to the city of Taylors Falls at what is commonly called the dalles area of the river. Several photos of the dam crossing are in the record at Exhibits 285 and 289.

The Rock Creek Alternative would cross the St. Croix National Scenic Riverway at the Highway 70 bridge west of Grantsburg, Wisconsin. See the revised EIA at p. 24 of Section 5 (Exhibit 12A). Minnesota’s consultant Gregory Booth prepared a report evaluating the Highway 70 crossing. Exhibit 22.

The Arrowhead Alternative would also cross the St. Croix National Scenic Riverway system although it is actually the Namekagon River that would be crossed near Hayward, Wisconsin. See the revised EIA at p. 32 of Section 5.

With regard to the King Alternative, NSP has stated that there are actually four transmission corridors that would be affected, two of which would cross the St. Croix River. One crossing is at the King generating plant south of Bayport, and the other is near Afton State Park. See Exhibit 12 at p. 10 of Section 5. Both crossings are existing crossings. This Alternative requires an upgrade of the two lines from 115 kV to 161 kV. Several photos of the Afton crossing are in the record at Exhibit 292.

NSP and Dairyland prefer the Chisago project, of course, and their first choice for a river crossing is the dam crossing (Segment S). See prefiled testimony of James Alders, Exhibit 208 at 23 and 32. Their second choice is the pipeline crossing (Segment HH). Alders, Tr. Vol. 16B at 88. NSP and Dairyland would be happy with authorization to cross at either the dam or the pipeline. The Wisconsin Public Service Commission staff believes that a crossing at either location is acceptable. See Barger, Exhibit 106 at 10.

NSP does not want to cross the river at the north crossing (Segment M). Alders, Tr. Vol. 16B at 88. The National Park Service has also indicated that the north crossing is wholly incompatible with its policies. See letter from Anthony Anderson to Judge Luis, dated April 22, 1999, and Exhibit 78.

All of the possible river crossings for the Chisago project are controversial. Both Taylors Falls and St. Croix Falls object strenuously to any crossing for the Chisago project. See Exhibit 162. The cities do not want the line to cross at the dam, at the pipeline, or at the north. The Route Advisory Task Force solidly opposes the Chisago project. See Exhibits 9A, 9B, and 231. Practically every resident of Chisago County, Minnesota, and Polk County, Wisconsin who commented during the hearing opposes the line. The cities and the Concerned River Valley Citizens and the Route Advisory Task Force will make their positions plain in their briefs to be filed with the ALJ. Crossing the St. Croix National Scenic Riverway with a HVTL has always been controversial. The utilities learned this in 1986 when they studied the situation at the direction of the Wisconsin Public Service Commission. See Exhibit 93.

NSP and Dairyland are willing to undertake certain mitigating steps to minimize the visual impact of the line at either location. For example, the utilities will remove the four existing circuits at the dam crossing and replace them with two circuits, so there would be two fewer lines crossing at that location. At the pipeline crossing, the utilities are willing to bore underground from bluff to bluff to minimize the visual impact of the line and to install transition stations on the bluffs out of site from the river. See Bruce LeMar testimony at Tr. Vol. 12B at 41-48 and Exhibit 191.

The objections are that even with fewer lines at the dam crossing, there still will be visual impacts from the remaining lines. Also, the dam crossing, presuming NSP’s preferred route is followed from the Chisago substation, would send a 230/69 kV double circuit line diagonally through the city limits of Taylors Falls and right down the main street of St. Croix Falls. The underground crossing at the pipeline would require boring deep under the river in an area where an endangered mussel species is known to exist. See Exhibits 28 and 140.

Any river crossing would require approval from the federal government. The National Park Service has expressed the same concerns that many have expressed during the hearing, that any crossing of the St. Croix National Scenic Riverway will have adverse impacts, and while a crossing might be acceptable under certain conditions, the Park Service would prefer that some other alternative be pursued and recommends that additional studies be done. See April 22, 1999, letter and Exhibit 78. In its April 22 letter, the Park Service states, "If we determine that the project will have a direct and adverse impact on the values for which the Riverway was established, we will recommend that [federal] permits be denied."

The Minnesota Department of Natural Resources submitted a letter into the record stating that an overhead crossing at the dam or an underground crossing at the pipeline (provided it was installed by boring and not trenching) would comply with DNR requirements. Exhibit 24.

The applicants have not devoted much effort to examining the other possible river crossings. The State’s consultant -- Mr. Gregory Booth -- was asked to evaluate the river crossing work performed by NSP’s consultant, Black & Veatch, and a Highway 70 bridge crossing, which Black & Veatch did not consider. Although Booth studied a 161 kV line rather than a 230 kV line, his work is still helpful in considering other possible crossings. Booth concluded, with regard to a Highway 70 bridge crossing, "We have found that solid dielectric cable encased in conduit attached to bridges is an extremely effective method for accomplishing river and inlet crossings with the least amount of environmental impact and lowest capital investment." Exhibit 22 at 2. Booth recommended that the MEQB and NSP consider all bridge crossings as cost effective and feasible options to aerial crossings and directional underwater borings. Id. at 3.

The King Alternative crossings were not considered in any detail in this proceeding, although both crossings are already in existence. No new crossing is required, and the St. Croix River south of Stillwater is more developed than in the Taylors Falls area. The fact that a new bridge near Stillwater is being planned by state and federal agencies was mentioned as a possibility for a new line, see the Route Advisory Task Force Report, Exhibit 9A at 5, but this option has not been seriously examined.

The Hayward crossing of the Namekagon River with the Arrowhead Alternative was also not explored in any depth. This, too, is an existing crossing.

According to NSP and Dairyland, no problem is too big at the dam or the pipeline crossing with the Chisago project, but all the other crossings for the System Alternatives have insurmountable problems. They minimize any concern over the winged mapleleaf mussel in the river near Taylors Falls, but complain that the King System Alternative is difficult to construct. See Gonzalez prefiled Testimony, Exhibit 83 at 25 ("The King alternative . . . is difficult to construct. [I]t would require large amounts of uneconomic generation . . ."). They are prepared to run the 230 kV line through the cities of Taylors Falls and St. Croix Falls and across the river at the dalles, over the cities’ strenuous objections, but are concerned that the Wisconsin Department of Transportation will not allow the company to put a HVTL on the bridge on Highway 70. See LeMar, Tr. Vol. 16A at 64-65. David Dahlberg, Vice President of Northwestern Wisconsin Electric Company, also sees problems with crossing on the Highway 70 bridge. See Exhibit 77.

Whether or not a river crossing will be recommended depends on whether the ALJ and the Board believe that a new transmission line is needed immediately. If the need is not immediate, much helpful information will be constantly forthcoming. For example, the selection of a bulk transfer line by the utilities is expected shortly. Minnesota Power has already proposed the Arrowhead to Weston line. A new Stillwater area bridge is under consideration by government agencies. More generating facilities will be built in Wisconsin by Wisconsin utilities and in other locations by NSP in the next few years. The decision to cross the St. Croix National Scenic Riverway with a transmission line will never be an easy one, but the more information that is available and the more options that are explored, the better the decision will be.

Another issue with siting a HVTL is the extent to which a proposed route follows existing right-of-way. We turn to that issue next.

B. Use of Existing Rights-of-Way.

The Minnesota Supreme Court made it abundantly clear in PEER that the MEQB must avoid the creation of new transmission line routes if at all possible, that there should not be a proliferation of transmission line corridors. Therefore, the ALJ and the MEQB must consider the extent to which proposed routes and System Alternatives follow existing rights-of-way.

The two most likely routes between the Chisago substation and the St. Croix River are NSP’s proposed route to the dam and the route following the pipeline. NSP’s preferred route is Route 6 (Segments B, T1, T2, T3, T4, Z, BB, DD, R, and S). See prefiled testimony of James Alders, Exhibit 208 at 32 and Table 6-4e in the revised EIA (Exhibit 12A). The route is shown on Exhibit 184. This route would result in a crossing at the dam. The pipeline route is referred to as the Green Route (Segments B, T1, T2, T3, T4, Z, EE, GG, and HH). See prefiled testimony of Robert Cupit, Exhibit 256, and Table 6-4d of the revised EIA and the map, Exhibit 184. This route crosses the river under the water at the pipeline crossing.

Both of these routes follow existing rights-of-way nearly the entire distance. Essentially the only new right-of-way that either of these lines requires is the first mile of line leaving the Chisago substation (Segment B). See Table 6-2 in the EIA (Exhibit 12) and Exhibit 189A. However, additional width along existing corridors, whether highway, pipeline, or 69 kV line, would be required to construct the transmission line.

The System Alternatives also would pretty much follow existing rights-of-way. A description of possible routes for each System Alternative is included in the revised EIA, section 5. As with a Chisago to Apple River line, however, it is likely that the right-of-way would have to be widened to accommodate a higher voltage transmission line. Some new right-of-way may be required for some portions of various segments of each System Alternative. For example, new right-of-way for the Pine Lake to Apple River segment may be required with the King Alternative. See revised EIA at Section 5.4.4.2.4 at page 16 of Section 5.

Unlike the situation in the PEER case, the choices here are not so much between an existing corridor and a totally new corridor. Instead, the decision comes down more to a choice over whether and where a HVTL should be placed across or under the St. Croix River. With each of the System Alternatives, there are opportunities to maximize the use of existing right-of-way.

C. Other Environmental Impacts.

The are many environmental impacts associated with a transmission line independent of a river crossing. The MEQB has identified in its rules a number of environmental factors to consider in routing any HVTL. See Minn. Rules part 4400.1310, subp. 1. Any transmission line will impact forests, and wetlands, and farms, and homes, Generally, the longer the line the greater the environmental impact. However, it is not sufficient to simply select the shortest line. This is especially true when the St. Croix National Scenic Riverway must be crossed. But it is also true when a longer line performs other functions that the shorter line does not perform, and the longer line might eliminate the need for the shorter line. This could be the case with the Arrowhead Alternative. The Chisago project is only 38 miles long; the Arrowhead to Arpin line is 210 miles long. It is not helpful, however, to simply conclude that the Arrowhead Alternative has significantly greater environmental impacts than the Chisago project, when the Chisago line could ultimately be extended the same 210 miles or another line of similar length would have to be constructed later.

Information on the environmental impacts of the System Alternatives is found throughout the record. See the revised EIA, Exhibit 12A, and the Wisconsin Draft Environmental Impact Statement, Exhibit 25. James Alders identified a number of documents addressing environmental impacts of the System Alternatives. Tr. Vol. 16B at 61-63.

However, there is a great deal more information about the Chisago project and the various route segments than there is about the impacts of the System Alternatives. The MEQB prepared a comprehensive analysis of the possible impacts of the various route segments between the Chisago substation and the river. See Table 6-1 in the revised EIA. It is possible to compare the impacts of various routes for the Chisago project from the information in this table, keeping in mind that under PEER some impacts may be more important than others and cannot be directly balanced.

Some of the impacts of concern about the Chisago project that were addressed in the hearing include the impacts on the cities of Taylors Falls and St. Croix Falls. See Exhibits 280 and 283, the prefiled testimony of Mayor Lynn Longnecker and City Councilman Loren Caneday. A number of people at the hearing testified about visual impacts on the Sunrise River. See e.g. Exhibit 290, the prefiled testimony of Linda Christianson. We heard about impacts on campgrounds, Exhibit 146, and tamarack swamps, Exhibit 267C, and environmental centers, Exhibit 76. Residents along possible routes, of course, raised concerns about property values and noise and health issues. See the letters from the public included in Exhibit 26.

One of the difficulties in determining which System Alternative and which specific route has the least environmental impact is that there is not as much information in the record about Rock Creek, King, and Arrowhead as there is about the Chisago project.. The System Alternatives were examined in the EIA and the Wisconsin EIS but not in the detail the Chisago project was scrutinized during the hearing. The applicants did not gather much information about the impacts of the System Alternatives. People who live near the proposed System Alternatives did not appear at the hearing and offer comments.

Several Wisconsin utilities did prepare a report on the possible environmental impacts of the Arrowhead to Weston line. Exhibit 127, the Advance Plan 7 D23x Report. The Wisconsin Public Service Commission staff objected to the introduction of this report into the record. See Tr. Vol. 7B at 115-126. The MEQB staff believes that while Wisconsin’s concern must be taken into account, the report does offer some analysis of the Arrowhead Alternative that can be considered.

In the final analysis, it is extremely difficult to chose one route or one System Alternative over another on the basis of environmental impacts. Every Alternative, every route, will have environmental impacts. However, there appear to be no insurmountable environmental barriers to any of the routes or System Alternatives -- other than the St. Croix National Scenic Riverway. If it is once decided that a line must be built, and that it must be built now, the choosing of the river crossing essentially selects the System Alternative.

It is no surprise that a 38 mile line from Chisago to Apple River costs less than a 210 mile line from Duluth to Weston. But it is not particularly helpful to make that comparison. MAPP estimates, for example, that transmission construction to satisfy Wisconsin’s need for the bulk transfer of power will cost between $150 and $250 million. Exhibit 226 at 56. And a transmission line to Apple River from Minnesota may serve Chisago County better than a line coming down from Duluth, but again, such a comparison is not appropriate. The ALJ must ensure that the right comparisons are being made when data on costs and electrical performance are put forth.

If the Chisago project is to be considered as only serving the local need, then it should be compared with other projects than can serve local need. A 115 kV line across Chisago County may be all that is needed to serve increasing demands in the county. A 115 kV line is likely to cheaper than a 230 kV line along the same corridor. Perhaps the Northwestern Area does not even need any additional facilities at the moment. Then the cost for that situation is zero. Additional generation is planned for Wisconsin, and NSP intends to bid out additional generation next year. Perhaps these facilities will provide power for Northwestern Wisconsin.

Because NSP and Dairyland assert that the Chisago project is designed only to serve local needs, their analysis of electrical performance and costs always stops at Apple River. See Attachments to prefiled testimony of Rick Gonzalez, Exhibit 83. NSP only compared how the System Alternatives served the local need. Gonzalez, Tr. Vol. 51, at 73-75. In fact, NSP did not even conduct an analysis of the Arrowhead to Arpin line. Id. at 73. Even after the MEQB Board decided to include the Arrowhead to Arpin System Alternative in the analysis, the applicants did not conduct any meaningful review of the Arrowhead line.

The MEQB’s consultant Gregory Booth did attempt to rank the alternatives according to electrical performance. See Appendices to the Booth Report, Exhibit 21. The staff does not assert that the Booth analysis is complete or definitive, but it does indicate that the Chisago line is not the clear favorite that the proponents claim it is. In fact, according to Booth, the Chisago line may not even serve the local needs in the Northern Area as well as the Arrowhead line does. Id.

In the final analysis, costs (which include electrical performance since electrical performance is a cost factor) are not going to drive this decision. When the comparisons are made correctly, so apples are being compared to apples, the costs are likely to be within a narrow enough range that the Environmental Rights Act and the Environmental Policy Act will dictate that the least environmentally damaging alternative be chosen. There could very well be a number of feasible and prudent alternatives to the Chisago project, and if they are less environmentally damaging than the Chisago project, Minnesota law could mandate that the Chisago project be rejected in favor of one of these other options.

If a route is designated between the Chisago substation and the St. Croix River as part of this proceeding, the MEQB will issue a permit authorizing construction along the selected route. The permit will contain a number of conditions. (As explained earlier, a permit for one of the System Alternatives could not be issued as part of this proceeding.)

A critical condition, of course, is the designation of a river crossing and the kind of crossing that is allowed. If an overhead crossing is approved, the permit will specify the type and height of towers next to the river. If it is an underground crossing, the permit will have to address a number of issues, including trenching and boring, type of cable, size of conductor, and transition stations.

The permit will specify the route that is designated. The right-of-way for the route can vary from the minimum width needed to maintain the line up to one-half mile. A narrow route may be appropriate to restrict a river crossing, for example, or when sharing right-of-way with an existing right-of-way. A wider right-of-way might be used in a situation where an existing utility use must be accommodated or to allow the utility and the landowners to negotiate the exact location of the towers and the final right-of-way needed. In such event, once the line is constructed the line would shrink to the actual right-of-way needed, which is on the order of 75 to 110 feet. The permit will also specify the kind and height of the towers to be installed. There will be additional approvals from the MEQB that NSP and Dairyland will have to obtain during construction. For example, approval of a boring technique and mitigative measures would be necessary before any tunneling of the river could occur. NSP and Dairyland would have to submit specific plans and specifications as construction progressed.

A number of boilerplate conditions would also be included. These would relate to the life of the permit and when construction had to start and to various legal issues such as liability. The permit would contain conditions requiring NSP and Dairyland to report periodically to the MEQB as construction progresses.

A draft permit was not introduced into the record. If a route were to be designated as part of this proceeding, the MEQB would make a draft permit available to the utilities and the public in advance of any final action by the Board on the permit, and an opportunity to comment on the draft permit would be afforded all interested parties.

NSP also wants to construct a new substation as part of the Chisago project. NSP refers to the substation as the Lawrence Creek sub because NSP wants to build it in an area near Lawrence Creek. If a Chisago route is approved in this proceeding, a site for a substation will also have to be designated.

Four proposed sites have been identified by NSP. The sites appear on a number of the maps in the record, including Exhibit 184. The site of any new substation depends on the route that is selected. The two most likely sites are proposed sites Nos. 1 and 2, since these sites correspond to NSP’s preferred routes. If NSP’s preferred route to the dam is chosen, substation site No. 2 is the best location for the substation. If the pipeline crossing is selected, then substation site No. 1 is the logical site. See Alders, Tr. Vol. 16B at 81-82.

Neither of these two substations sites has any overriding liabilities that would disqualify it from being used for a substation. Understandably, nearby residents do not want a substation site near their property, but this opposition is not likely to result in rejection of the site.

The first question for the Administrative Law Judge to address is how immediate is the need for more power in Northwestern Wisconsin. If the ALJ determines that something must be done immediately, then the ALJ should proceed to analyze what is the best course to undertake. If the need is not there, the no-build decision is the proper decision.

If there is an immediate need for more power in Northwestern Wisconsin, the ALJ must determine whether NSP and Dairyland have shown that there are no feasible and prudent alternatives to the Chisago project. This will require an analysis of whether new generating facilities or other transmission line projects could satisfy the immediate need for power in the areas affected and result in less environmental impacts than the Chisago project. The ALJ is not constrained to find only one solution to serve all four areas.

If the ALJ determines that the Chisago project should go ahead, the ALJ must recommend a crossing of the St. Croix National Scenic Riverway. The choice essentially comes down to an overhead crossing at the dam in Taylors Falls or an underground crossing at the pipeline. The ALJ will then have to recommend a route from the Chisago substation to the recommended crossing.

There is new information relevant to the decision in this proceeding being generated all the time. At some point a decision has to be made on the basis of the information available. However, the MEQB staff believes that reports from the Wisconsin Reliability Assessment Organization regarding a recommendation on a high voltage transmission line for transferring bulk power from Minnesota to eastern Wisconsin are documents that must be available for the Board’s consideration when making a final decision. These reports are expected in June 1999. Arrangements must be made to enter these reports into the record. The staff believes that this can be done without causing further delay in this matter. The parties can contact the Judge when the documents become available to discuss the best manner in which to proceed.

Dated:  May 3, 1999