Southwest Power Pool Proposes Highway-Byway Method For Regional Grid

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The Southwest Power Pool Inc. (SPP)'s board of directors, as well as its regional state committee (which comprises regulatory commissioners from seven states), has filed with the Federal Energy Regulatory Commission (FERC) a new highway-byway cost-sharing method for electricity transmission in the SPP region, which includes all or parts of Arkansas, Kansas, Louisiana, Mississippi, Missouri, Nebraska, New Mexico, Oklahoma and Texas.

If approved, the highway-byway method will replace several existing cost-allocation methodologies. Currently, for upgrades required to maintain grid reliability, one-third of the costs are paid for by all electric utilities in the SPP region, and utilities that benefit directly pay the remaining two-thirds. If a utility wants to sponsor a transmission project that will provide economic benefit (such as allowing its customers better access to low-cost generation), it must pay 100% of the costs, and once the project is built, the utility can recover some costs through others' use of the project.

In 2009, SPP created a balanced portfolio of transmission upgrades for which benefits exceeded costs across the region, and the costs of these specific projects were shared regionally. SPP also approved a new cost-allocation method for transmission projects needed to add wind energy to the grid, and two-thirds of these costs are allocated regionally.

SPP requested that FERC, in its decision on the highway-byway proposal, grant an effective date 60 days after the filing date.

SOURCE: Southwest Power Pool

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