May 16, 2006

MADISON - The Citizens Utility Board (CUB) today asked the Public Service Commission of Wisconsin (PSC) to investigate flaws in the design of the Arrowhead-Weston transmission line that could result in damage to Wisconsin's power plants and cause blackouts in the upper Midwest.

In a letter to the PSC, CUB states that as a result of engineering mistakes by Wisconsin Public Service Corp. (WPS), Minnesota Power Co., and American Transmission Co. (ATC), the Arrowhead line contains serious flaws in its electrical design which have never been eliminated even as construction on the line proceeds today. The line as designed is undersized in capacity and will not perform as expected and as ordered by the PSC in its decisions regarding the line in October 2001 and December 2003. The failure of the Arrowhead line to work properly when called upon could lead to major damage to power plants and cause region-wide blackouts in the upper Midwest.

"The Public Service Commission needs to investigate the flaws in the design of the Arrowhead transmission line and order the utilities to ensure that the line will prevent blackouts, not cause them," said Charlie Higley, CUB's executive director.

CUB has been involved in proceedings at the PSC regarding the Arrowhead line since it was first proposed by WPS and Minnesota Power in 1999. ATC became a co-applicant to the project in 2001. The PSC approved the project in October 2001 and again in December 2003. The line is being constructed by WPS under contract to ATC, which will own and operate the $420 million line when brought into service in 2008.

Larry Thiele, an independent consulting electrical engineer, authored an in-depth analysis detailing the design flaws of the Arrowhead line. Thiele's analysis is attached to CUB's letter to the PSC. Thiele was hired by CUB in 2003 to provide expert testimony regarding whether the Arrowhead line was properly designed. For the last several years, Thiele has voluntarily continued examination of the design and expected performance of the line.

Thiele's analysis shows that WPS, Minnesota Power, and ATC failed to design the Arrowhead line to comply with industry standards and PSC orders that require a line to perform properly, especially while other emergency events (known as contingencies) are taking place.

In particular, Thiele's analysis shows that the Arrowhead line will not work properly if an outage occurs on the King-Eau Claire-Arpin transmission line, the only high-capacity line connecting Wisconsin directly to Minnesota. Should the King-Eau Claire-Arpin transmission line drop out of service, the Arrowhead line is supposed to handle power flows from Minnesota without causing it or other transmission lines to carry too much power (known as "thermal violations") or to cause unstable power flows that could inflict damage to power plants and cause blackouts (known as "voltage stability violations").

Thiele's analysis shows that the utilities failed to properly design the Arrowhead line to meet expected contingencies, especially ones that threaten the transmission system's voltage stability. Thiele's analysis concludes that the utilities:

* Failed to design Arrowhead with enough electrical capacity to prevent voltage stability problems;

* Plan to connect the Arrowhead line to the Minnesota transmission system at the wrong place, which will further aggravate the voltage stability problems caused by the undersized Arrowhead line;

* Failed to initially test for and detect the voltage stability problem in Arrowhead's design, and when eventually discovered, failed to bring these concerns to the attention of the PSC during licensing;

* Failed to perform the proper analyses to determine whether the use of a special transformer, which is intended to partially compensate for Arrowhead's insufficient capacity, will actually work to prevent voltage stability problems; and

* Designed Arrowhead in such a way that its operation in emergency conditions will be extremely complicated and prone to failure.

Last year, Thiele raised concerns about flaws in the Arrowhead line with the North American Electric Reliability Council (NERC), which is responsible for oversight of the reliable operation of North America's transmission system. NERC ignored its responsibilities by rejecting Thiele's complaint without investigation and telling him to take his reliability concerns back to the PSC.

CUB urges the PSC to investigate the design flaws in the Arrowhead transmission line and order the utilities to comply with its orders and with industry standards, otherwise the reliability of Wisconsin's electric system will be threatened by this poorly-designed transmission line.

###

The Citizens Utility Board of Wisconsin is a member-supported nonprofit organization that advocates for reliable and affordable utility service and that represents the interests of residential, farm, and small business customers of electric, natural gas, and telecommunication utilities before regulatory agencies and the courts.