The Minnesota Public Utilities Commission has voted to approve the sale of the transmission assets of Interstate Power and Light by ITC Midwest LLC. The MPUC's determination was made effective yesterday.
The decision now clears the way for ITC Midwest to purchase 6,800 miles of transmission lines and stations in Iowa, Illinois, Minnesota and Missouri from IPL. ITC Midwest is a subsidiary of ITC Holdings Corp ; IPL is a subsidiary of Alliant Energy Corp.
ITC Midwest signed an agreement in January to purchase, own and operate IPL's 34.5 kV and above transmission lines and station facilities in Iowa, Illinois, Minnesota and Missouri for approximately $750 million, subject to various adjustments at closing, and pursuant to all regulatory approvals. The MPUC decision was the final regulatory approval needed for the transaction; ITC Midwest and IPL received prior approval for the transaction from the Federal Energy Regulatory Commission (FERC), the Federal Trade Commission and the states of Iowa, Illinois and Missouri.
"We are delighted with the outcome of the Commission's decision and the trust the state has placed in ITC's ability to establish a robust, reliable transmission system in Minnesota," said Joseph L. Welch, president and CEO, ITC. "We are, in fact, gratified by the confidence and importance that all of the regulatory agencies have placed in the independent transmission model and our ability to successfully operate and manage a regional electric grid in the Midwest.
"ITC's ownership will bring the benefits of independent transmission - improved reliability, less congestion, creation of an open energy market and facilitation of renewable resources - to the states of Iowa, Illinois and Minnesota," Welch continued. "It will further ensure that critical capital investments are made in the high-voltage electric systems in these states. These investments are essential for supporting future economic growth in Midwestern communities. ITC Midwest will leverage our industry expertise and experience on behalf of its customers."
ITC's purchase of IPL's transmission assets represents the company's first purchase of high voltage electric lines outside the state of Michigan. Since its inception in 2003, ITC has pursued aggressive improvements in the transmission system in Michigan's Lower Peninsula. The company is successfully implementing a seven-year, $1.6 billion capital improvement plan in the state. It is also exploring construction of an extra-high voltage 765 kV line that would link the state to 765 kV service lines in Ohio and Indiana, thus producing an extra-high voltage regional transmission infrastructure that would facilitate lower energy costs, higher reliability and renewable resources.
"ITC Midwest ownership of the transmission system in Minnesota will result in significant investments in the state's electric grid," Welch noted. "Project commitments will reduce known constraints on the system and reduce energy costs to customers approximately $40 million per year.
"We look forward to working with each of the states to address their energy needs and put the benefits of independent transmission to work for customers in this region," Welch concluded.
ITC Midwest and IPL expect to close on the acquisition of the transmission assets by year end.