Michigan South Central Power Agency board members authorized managers to seek a legal opinion on a purchase option to buy more transmission rights from International Transmission Corporation /Michigan Electric Transmission Company.
General Manager Pam Sullivan said former MSCPA manager Paul Beckhusen mentioned the option was in the memo of understanding with ITC to build the grid-tie between the Jonesville Road substation and Union City substation. MSCPA had a right to purchase 20% of that grid line.
Beckhusen spearheaded the effort to build this third grid connection for Coldwater before leaving to become senior vice president of power supply and energy marketing at American Municipal Power, Inc.
The $35 million line, north along I-69, was completed in late 2019. The investment should make the price $7 million. The option was good for only three years.
This purchase could mean more savings for members if the extra transmission can be added to MSCPA's current ownership.
The power agency purchased 121.5 megawatts over the decades before the grid consolidated into ITC/METC ownership. It won a legal battle to preserve its ownership rights.
MSCPA pays $2,231.17 a month for transmission under its grandfathered rights. When members use over the 121.5 MW it is billed $6,236.65 per MW a month.
Legal will need to determine transmission costs over the new grid line if purchased by MSCPA.
Coldwater and Marshall bought Union City's 4.86 megawatts of transmission for $500,000 over eight years at 0% interest as part of Union City village leaving its MSCPA membership. The other remaining members, Hillsdale and Clinton, have excess transmission rights, which they sell to other members.
If legal and financial recommends MSCPA proceed, members could add to the transmission of MSCPA.
Before ITC/METC existed in 1980, MSCPA paid Consumers Energy $6.5 million to buy 90 megawatts of transmission capacity over its lines to tie its then five members together with the now-demolished Endicott 55-megawatt generator at Litchfield.
In 2005, the Federal Energy Regulatory Commission issued a final order allowing MSCPA to purchase an additional 31.5 megawatts of high energy electrical transmission to serve its members.
MSCPA won a lawsuit in 2001 against Consumers Energy to allow the purchase amid a changing power market and regulatory framework. MSCPA paid $1.8 million from its reserves to make the second purchase.
The transmission purchase has saved the members millions in transmission costs each month. The ownership is one reason why MSCPA member rates have been lower than investor-owned power suppliers in Michigan.
MSCPA owns more than transmission rights. It owns about eight miles of actual 138kV lines near Grand Rapids. It must pay ITC for the actual maintenance cost of that section of the line.