Transmission Line Project in Southern Wisconsin Will Cost Almost $90 Million More

Friday, August 4th, 2023 -- 9:01 AM

(By Danielle Kaeding, Wisconsin Public Radio) A disputed transmission line project running across southern Wisconsin will now cost roughly $90 million more than its owners expected due to rising material costs, land acquisition expenses and ongoing legal challenges.

According to Danielle Kaeding with Wisconsin Public Radio, American Transmission Co., ITC Midwest and Dairyland Power Cooperative are building the 345-kilovolt Cardinal-Hickory Creek transmission line that runs more than 100 miles from Dane County to Dubuque County in Iowa.

The project's co-owners told the Wisconsin Public Service Commission in a filing on Friday that they expect the cost to build the $492 million power line to grow by $89.8 million or 18 percent beyond the initial price tag.

Alissa Braatz, an ATC spokesperson for the project’s co-owners, said in a statement that it’s critical for them to be wise with rising costs on behalf of their energy consumers, investors and owners.

"And we commit to managing escalating costs to the greatest extent possible," Braatz said. In the filing, the utilities highlighted "inflationary cost increases" in the cost of construction materials, labor and land acquisition since project estimates were developed in 2018.

The Public Service Commission approved the project the following summer. According to the filing, the price of steel for ATC and ITC Midwest increased on average roughly 112 percent for steel poles.

In addition, the cost of aluminum and steel for conductor wires rose an average of about 59 percent. Labor costs for ATC also went up around 12 percent while ITC Midwest saw an increase of roughly 32 percent from 2018.

Land acquisition costs also increased 95 percent in Dane and Iowa counties due largely to increasing land values. Wisconsin’s Citizens Utility Board first raised concerns about the project’s rising costs last year when its owners noted the price tag had grown by more than $49 million.

"This shows that the cost did continue to climb over the last year, and we still don't actually today know what the ceiling is on how expensive this project is ultimately going to be," Tom Content, the board’s executive director, said.

He said experts raised concerns about whether the benefits of the project would outweigh the costs when the transmission line was first approved. The project was initially anticipated to create between $23 million and $350 million in economic benefits over its 40-year lifespan.

Wisconsin ratepayers were expected to pay up to $72.7 million or about 15 percent of the cost to build the line. The remaining cost would be spread out over the region managed by the Midcontinent Independent System Operator, which oversees the power grid in 15 states.

Solar projects have also experienced higher costs as the COVID-19 pandemic created supply chain constraints. Prior to the global health crisis, Content said the Elm Road Generating Station owned by We Energies cost $150 million more than that project's initial price tag of $2.15 billion.

The Citizens Utility Board has urged the Public Service Commission to provide more oversight of the line’s construction, saying it should order utilities to provide an estimate of total costs.

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