Cardinal-Hickory Creek: Power line costs soar amid Inflation, legal challenges

As required under the construction permit, the owners of the Cardinal-Hickory Creek line notified the Public Service Commission Friday that the cost would exceed the authorized $492 million price tag by more than 10%. They say the total cost is now unknown.

The PSC permit does not require additional approval for price overruns.

“Rising costs are presently a reality in all industries, and the Cardinal-Hickory Creek project is no exception,” said Alissa Braatz, a spokesperson for American Transmission Company, one of the line’s three co-owners.

Meanwhile, opponents of the line between Dubuque, Iowa, and Middleton are asking a federal appeals court to temporarily halt construction on either side of the Mississippi River while the court considers whether the line can cross the river as planned.

The utilities, which have so far spent about $277 million on the project, say the price of steel has essentially doubled in the four years since construction costs were estimated, while the aluminum and steel wires have gone up 68%. Shipping costs have raised the price of glass insulators by about 10%, according to the filing.

Utilities also cited the ongoing cost of litigation, including one state and three federal cases that have spurred multiple appeals, including one before the state Supreme Court.

Legal costs were not detailed in the notice, though public records show the PSC has paid more than $800,000 this year in attorney fees for one former commissioner involved in the case.

Braatz said the court battles will ultimately pay more because of the “misguided pursuit” against a project approved by multiple state and federal agencies.

“We continue to find it perplexing that an environmental organization is challenging a vital project like Cardinal-Hickory Creek that’s needed to deliver clean, renewable power for our region’s energy consumers,” she said.

The litigation has also created uncertainty around the construction schedule.

Braatz said the utilities can’t estimate the total cost of the line until the appeal process is completed and federal agencies issue a final determination on whether and how the line can cross the river.

Despite the cost increases, Braatz said the project still will provide net economic benefits to customers.

At its original cost estimate, the owners estimated the line would save customers between $23 million and $350 million over 40 years, though PSC staff found the savings for Wisconsin consumers would likely be negligible after accounting for solar development that has far outpaced underlying assumptions.

Because the project is expected to benefit the entire Midwest grid, the costs are spread over multiple states, with Wisconsin ratepayers covering about 15% of the total.

Howard Learner, the lead attorney for conservation groups suing to stop the line, called the project “a runaway trainwreck” that was approved based on “lowball” cost estimates.

“The PSC should protect consumers, do its job fairly and reconsider the economics when the transmission companies are saying that their construction costs are increasing ‘more than 10%’ and they can’t even predict now what the ultimate costs will be,” Learner said.

Regulators in Wisconsin and Iowa have not granted similar requests.

Last week, opponents of the line asked the federal appeals court to temporarily halt construction while it reviews a lower court ruling that bars the line from crossing the Upper Mississippi River National Wildlife and Fish Refuge, which covers 261 river miles between Rock Island, Illinois, and Wabasha, Minn.

Opponents contend the utilities are creating two “segments to nowhere” in an effort to pressure the courts into allowing the crossing.

Earlier this month, the same appeals panel denied the utilities’ request to suspend Judge William Conley’s order blocking a proposed land swap, which he ruled was an attempt to evade the congressional mandate of the refuge.

The utilities say the ban will delay the completion of the line, further increasing construction costs and limiting output from new clean energy projects.

The appeals court is expected to hear arguments this fall.