Regulators approve $500M Cardinal-Hickory line over charges of bias from opponents

Wisconsin regulators gave final approval last week to the proposed $500 million Cardinal-Hickory Creek power line in Southwest Wisconsin amid project opponents’ accusations of bias.

The Wisconsin Public Service Commission signed off on the project on Thursday after agreeing unanimously in August that the work is needed. Once built, the proposed 345 kv transmission line will run from the Cardinal Substation in Dane County to the Hickory Creek substation in Dubuque, Iowa. The project also calls for the construction of a new substation, named Hill Valley, in Grant County.

The commission’s decision on Thursday came just four days before a statutory deadline for the project. PSC regulators had 360 days to approve or reject the line. If they took no action, the project would have automatically advanced. The line, which is to be operated by American Transmission Co., ITC Midwest and Dairyland Power Cooperative, had previously won the approval of the Mid-Continent Independent System Operator, or MISO.

In opposing the project, critics have generally argued that circumstances have changed since the plans for Cardinal-Hicks were initially approved eight years ago. They’ve also questioned whether there really is a need for a new transmission line that could vary in cost between $474 million and $560 million.

Separately, two members of the PSC board have been accused of having conflicts of interest, a charge the commissioners eventually rejected. Specifically, the Driftless Area Land Conservancy and the Wisconsin Wildlife Federation raised questions in mid-September about the impartiality of PSC Commissioner Mike Huebsch and Chairwoman Rebecca Valcq. Valcq, the groups noted, had worked for 15 years as an attorney for WEC Energy Group, which has a 60% stake in ATC, and represented the company while she was an attorney at Quarles & Brady.

Huebsch, for his part, is a member of the advisory committee for the Carmel, Indiana-based MISO, which regulates the electric grid in the Midwest. The groups argue that Huebsch was “communicating with and advising” MISO outside the commission’s regular hearings. Huebsch led the commission’s deliberations on the Cardinal-Hickory project even as MISO intervened in the case.

“The commissioners’ entanglements present conflicts of interest and at least an appearance of bias and lack of impartiality when the totality of the circumstances are considered,” according to the groups.

Huebsch and Valcq each disputed that they had conflicts of interest and refused to take themselves off the case. Huebsch said that he had never spoken about the proposed transmission line with MISO officials, only had “high-level” talks about general policy.

Valcq, meanwhile, said she had never represented ATC or any other parties in the Cardinal-Hickory project and wasn’t involved in planning the project before joining the PSC.
MISO approved the Cardinal-Hickory line in 2011 along with various other “multi-value projects” that were intended to transmit renewable energy and lower general energy costs. The Cardinal-Hickory project is the only one of these projects not yet built.

Critics of the project have noted that demand for electricity has been relatively flat in recent years even as advances in small-scale solar energy and battery storage have threatened to undermine the need for a new transmission line for renewable power. Environmental groups have meanwhile expressed concerns about the line’s possible environmental effects on the state’s driftless region and about the proposed use of eminent domain to acquire land.

Criticism has been coming from many places. In an unprecedented step, attorneys general in Michigan and Illinois filed letters in July asking the PSC to block the project. That same month, three Republican state lawmakers, after hearing from their constituents, asked regulators if they had fully considered the necessity of the project. And on Friday, four Democratic lawmakers — Sen. Jon

Erpenbach, of West Point; Rep. Dave Considine, of Baraboo; Rep. Dianne Hesselbein, of Middleton; and Rep. Sondy Pope, of Mt. Horeb — issued a statement expressing their disappointment with the PSC’s decision.

“The transmission line received opposition from local units of government, concerned constituents, and advocacy groups, and will continue to receive backlash over the substantial impacts that the line may have,” according to the statement. “Those that opposed the transmission line were well-organized and extremely knowledgeable. We were impressed by how involved and effective our constituents were during this process. While we are all surprised by these results, we are thankful for all of the effort and adamant opposition.”

The cost of the Cardinal-Hickory project would be shouldered by ratepayers in 12 states. Wisconsin ratepayers, for instance, would pick up 15% of the total, while their counterparts in Illinois would take on 10% and those in Michigan 21%.

Even with the PSC’s blessing, the project cannot move forward without approval from the U.S. Fish & Wildlife Service, the U.S. Army Corps of Engineers and the Iowa Utilities Board. If it clears those hurdles, construction on the project could begin as soon as 2021.