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Study finds billions of dollars of economic benefits from just one transmission project

New transmission projects like Southern Cross save money and help create a more reliable power system.
Study finds billions of dollars of economic benefits from just one transmission project

A recently released study finds that Pattern Energy Group LP’s proposed Southern Cross transmission line will spur $3.9 billion in economic benefits. Mississippi, Louisiana and the greater southwest stand to gain over both the short and long term, according to researchers.

Benefits to Louisiana and Mississippi

The study, conducted by Moss Adams LLP, found wide-ranging positives for Mississippi and Louisiana. In the short-term, there will be nearly $1.5 billion of direct economic impact from expenditures incurred during development and construction. These include things like land acquisition payments and clearing and construction costs.  The direct investments will also create more than 650 jobs throughout the projects development and continued operation.

In fact, Southern Cross has already been engaged with communities along the project route, seeking local suppliers and contractors. The direct impacts will lead to further indirect and induced impacts to the tune of an another $1.4 billion over the project’s life. This includes things like lodging and meals paid for by workers, and more money spent in the local economy. Southern Cross will also have direct fiscal impacts on the states where it’s built. It is estimated that over the 30-year life of the project over $441 million will be paid in property taxes.

Benefits to Texas and the Southeast

The Southern Cross transmission line will span about 400 miles between Louisiana and Mississippi. It will have a baseload capacity over 2,000 megawatts. The direct-current transmission line will connect two non-synchronous electrical systems, in Texas (ERCOT) and the Southeast (SERC). It will also provide bi-directional flow. So while the line will mostly be used to deliver low-cost wind energy from Texas to the Southeast, should conditions warrant, Southern Cross could carry electricity to Texas as well.

Enabling market competition via Southern Cross will lead to more efficient dispatch of generation in both ERCOT and SERC. It’s another example of how long-distance, high-voltage transmission lines like Southern Cross provide benefits to consumers on both ends of a project. ERCOT will benefit from the ability to export excess wind generation and will allow for better use of the CREZ transmission lines, saving money for Texas consumers. Southern Cross will also deliver economic benefits to the southeast through lower expected wholesale energy costs from cheaper, cleaner Texas wind. From a reliability perspective, the line offers flexibility to bring energy in both directions if either system need it.

Southern Cross is the first of its kind in many ways. It will be one of the first overhead DC transmission lines built in the United States in almost two decades. It’s a great example of how private capital can be leveraged to provide clean, reliable power while saving consumers money. Check out this video to learn more about how wind power helps keep the lights on.

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Betsy Rosenblatt Beck is the Director of Transmission Policy at the American Wind Energy Association. Betsy manages AWEA’s transmission efforts by promoting transmission investment and advancing rules and operations to better accommodate wind on the grid. Betsy has previously worked on electricity and renewable energy policy for Ranking Member Cantwell on the Senate Energy and Natural Resources Committee. She has also worked at FERC in offices of Enforcement and Commission Norris. Betsy earned a BSE in Materials Science and Engineering from the University of Pennsylvania.

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