Southwest Power Pool Transmission Plan Caught in Catch-22

Sep 18, 2007 - Journal Record - Oklahoma City

Planning for the future of electricity generation in Oklahoma is kind of like debating over which came first: the chicken or the egg.

No one wants to build power plants in remote areas where there are few customers and no transmission infrastructure to get that power onto the grid. On the other hand, no one wants to build transmission infrastructure in areas where there are no power plants or few customers to serve. And no one wants to build anything until they have a plan in place for recouping their costs.

"So what, do you build it and they will come?" Jay Caspary, director of engineering for the Southwest Power Pool, asked members of the Oklahoma Electric Power Transmission Task Force on Friday. "And how do you pay for that? It's a real chicken-and-egg thing here."

SPP, the organization charged with overseeing electricity issues for an eight-state region that includes Oklahoma, is working on a 10- year, $1.4 billion transmission expansion plan. The plan includes several million dollars' worth of assumptions and estimates, but despite the uncertainties involved, the plan is certainly better than nothing, Caspary said.

"Keep in mind that to do nothing has a cost," he said. "We need a 20-year outlook, because now we're just doing incremental, reactive stuff." SPP officials are trying to envision what they would like the region to look like in 10 or 20 years, and build a plan to make that vision a reality.

A key component of the expansion is what is known as the X Plan, which is designed to build wind generation capacity throughout the Central and South Plains area in the shape of an 'x'. The plan anticipates that Oklahoma will lead the nation in wind generation by the year 2024.

Plans to build up wind generation capacity within SPP's footprint are included in a broader project known as the EHV Overlay. The Federal Energy Regulatory Commission has ordered regional transmission organizations like SPP to coordinate with each other and interconnect their systems, creating an interstate transmission superhighway.

If the SPP identifies a specific construction project as one that is necessary to ensure the reliability of the electricity grid, SPP will allow the builder to recoup 67 percent of their costs from the ratepayers who directly benefit from the project. The other 33 percent of the cost will be borne by all ratepayers in the SPP region. But electricity companies face a challenge in convincing SPP that a project intended to serve a need projected for years down the road should qualify as a reimbursable "reliability" project today.

The Kansas Electric Transmission Authority contracted with SPP on a study to examine how Kansas can best fit into the nationwide electricity system. The study predicts the development of more than 1,500 megawatts of wind generation in Kansas. The extent and timetable of the plan is highly sensitive to changes in the price of natural gas, said Caspary. A $1 increase in the price per unit of natural gas could triple the cost benefit of the alternative energy components of the X Plan in Kansas, the study found.

SPP heralded the commitments energy producers and others have already made to help bring the X Plan to fruition. Oklahoma Gas and Electric Co. has offered to build the western half of the X Plan into the Texas Panhandle, and Public Service Company of Oklahoma's parent company AEP has indicated interest in building a huge portion of the national overlay project "subject to socialized cost recovery." ITC Great Plains has offered to build transmission for specific portions of the project in Kansas, Oklahoma and Texas.

Oklahoma Secretary of Energy David Fleischaker said policy leaders in Oklahoma should support a federal plan to require all states to include renewable energy sources as part of their electricity generation portfolio. States in the Western region with few renewable resources would have to buy wind-generated power from Oklahoma to meet the requirement, he said.

To start the planning process in Oklahoma, task force members voted to create a subcommittee "to come up with assumptions" regarding the state's long-term electricity goals, said Rep. Gus Blackwell, R-Goodwell. The task force has until January to prepare a report for the Legislature.

Originally published by Janice Francis-Smith.

(c) 2007 Journal Record - Oklahoma City. Provided by ProQuest Information and Learning. All rights Reserved.