FERC approves $10B grid upgrade for wind projects

The U.S. Federal Energy Regulatory Commission (FERC) approved the financing plan behind a $10 billion to $12 billion project that would enable utilities to transport wind energy around the U.S.

The Green Power Express Project aims to install 3,000 miles of extra high-voltage transmission lines to move wind energy generated in the upper Midwest to customers in the Midwest and East. Estimates are that 12 gigawatts of wind energy could travel on the transmission lines.

Much of the country's wind power potential lies in remote areas, far from the demand of urban areas. But the current transmission lines aren't capable of carrying those loads, necessitating the 765-volt lines that developers plan for the Green Power Express Project.

Energy producers typically have to pay to connect their projects to the energy grid, but connecting the remote wind farms would be cost-prohibitive, said ITC Holdings (NYSE:ITC), which is developing the project through its holding company Green Power Express (see California making it easier to connect renewables to grid). 

FERC ruled that the project is eligible for incentives because the project is "not routine by any measure" and will greatly benefit the nation's energy supply. FERC approved a 12.38 percent return on investment for equity that Green Power Express puts in the project, also allowing Green Power to recover some costs by charging ratepayers.

Green Power Express now plans to work with the Midwest Independent Transmission System Operator to develop a funding mechanism from the seven states involved in the project.

Shares of ITC were down a little more than 1 percent to close at $42 today.

FERC has been criticized for being too conservative with new sources of energy, such as marine power, but the organization has loosened some of its restrictions in recent years (see Marine power companies applaud possible FERC changes.)