The Federal Energy Regulatory Commission (FERC) has approved a new highway/byway method of sharing costs for new electric transmission in the Southwest Power Pool (SPP) region, which includes all or parts of Arkansas, Kansas, Louisiana, Missouri, Nebraska, New Mexico, Oklahoma and Texas.
The approach assigns costs of high-voltage transmission regionally and lower-voltage transmission locally. SPP analyses demonstrated that large-scale, extra-high-voltage highways provide benefits across a wider region, so costs will be assigned to electric utilities across the SPP footprint based on their historic use of the region's transmission system.
Lower-voltage byways benefit smaller areas within the region. A formula will be used to assign costs more directly to the utility in whose service territory (zone) the project is located and that will receive the most benefit from the project, according to SPP.
‘Wind energy is facing gridlock in a few regions that is holding up tens of thousands of megawatts of clean, domestic renewable energy,’ says Denise Bode, CEO of the American Wind Energy Association. ‘We therefore applaud and support FERC's determination to work through stakeholder concerns and establish a policy that gets transmission built. We also applaud FERC's recognition of the need for grid planning principles that are designed to meet renewable energy goals.’
The highway/byway proposal was created by the SPP Regional State Committee (RSC), a FERC-recognized group of state regulatory commissioners from Arkansas, Kansas, Missouri, Nebraska, New Mexico, Oklahoma, and Texas. The RSC is tasked by FERC with setting certain SPP policies, including cost-allocation mechanisms.
The new cost-sharing method will apply to transmission expansion projects approved by the SPP board of directors after June 19, including a set of priority projects conditionally approved in April pending successful implementation of the highway/byway policy.