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x ~~ ~ i i <br />4~ ~ s <br />,. <br />~~4 - ~ ;~ r CAPX 2020 <br />~s. Y <br />~ ~ " A INTERIM REPORT <br />tt , i' - DECEMBER 2004 <br />-~ <br />'i ~- A .;Y <br />. . <br />--, `urC ulation <br />e contmum wth ' <br />s forese o to the tat <br />Tanner s e <br />s <br />e o <br />p g ~' p p , econom and <br />y <br />~^~-~ , ~ .for electricity Through 2020, Minnesota electric utilities predict an annual average <br />~~ '~ ~~ ~~~ ~ ~ pur customers' demand for electricity of 2.49 percent,2 far above the national <br />~€~~ <br />., k~~. p~, 18 percent per year. ~ Meeting this increased demand is expected to require an <br />,~ ~ ~ QO megawatts of generating capacity. To provide context for this amount, the <br />" ' generating station in Minnesota -the Sherburne County (Sherco) plant near Becker - <br />~~M14, - de a ~ota1 of a roximatel 2 300 me awatts of eneratin ca aci <br />.~ ; ~5 ~~ s- PP Y g g g p ty <br />onto the projected increased need for electric generating capacity; customers' <br />' '"~ "~ ~'d for power quality has increased. Sophisticated electrical equipment and new <br />.~~ ~ <br />,ps111ess customers, such as high-speed data processing centers, require highly reliable <br />` ,w ¢ ~1~ efetty service. To meet these requirements, transmission and distribution infrastructure <br />s~ 1~ must,be nesigned to meet increasingly higher power quality standards. <br />~'~,k' ~~ <br />»~ ,ti - <br />2.~~apX°°.2020: provides further background and detail regarding customer requirements and <br />~i~ro,}ected demands in Attachment A. <br />~`;'©iIRACURRENT SYSTEM <br />besigned and built in the 1960s and `70s, the high voltage transmission facilities (230 <br />'~ kilovolts and above) act as the supporting structure, or backbone, of the bulk electric system, <br />moving electricity from power plants to load centers. The system is designed to maintain <br />reliability even when faced with various contingencies that arise due to weather or other <br />~facfors that temporarily may remove a particular transmission facility from service. The <br />majority of these facilities were built in the 1970s, with the last of this class built in <br />,connection with construction of Unit 3 at the Sherco power plant, which began operating in <br />1987. <br />;>Lttility planners historically designed the regional transmission grid with sufficient capacity <br />rand network capability to support the system and meet long-term growth requirements. The <br />':grid has served Minnesota well; since 1987, only shorter, lower-voltage transmission lines <br />have -been built, typically to meet local, load-serving needs. <br />'Attachment B contains additional information regarding our current transmission system, <br />planning processes and regulatory structure. <br />A CHANCED MARKET <br />€ Thirty years ago, when the transmission backbone was designed and built, the region's <br />f electric-utilities jointly planned the addition of new generation and transmission facilities. In <br />1992, Congress deregulated the wholesale electric power supply Indus <br />try, making generation <br />a competitive market while sttll regulating transmission facilities as the nation's electric <br />2 Demand studies include information from the following utilities: Alliant Energy, Great River Energy, <br />Dairyland Power Cooperative, Minnesota Power, Missouri River Energy Services, Otter Tail Power Company, <br />Southern Minnesota Municipal Power Agency/Rochester Public Utilities and Xcel Energy. <br />ETA., growth in electric sales for 200?-2025 (http:f/www eia.doe.gov/oiaf/aeoielectricity html) <br /> <br />4 <br />