Climate and energy

Those of you trying to keep track of the players in the Kansas transmission picture probably are wishing we could set up some version of fantasy football, with data tracking systems to keep tabs on all the players, issues, regulators, the game schedule, etc.

That is beyond my power (ha). But since this has been de facto transmission week on the CEP blog, I’d like to add to the mix this contribution from SNL writer Kerry Bleskan. SNL is a subscription news service (you can sign up for a free trial, it’s good stuff for industry types), but they have kindly allowed us to clip from one of her articles.

Kerry’s summary is a lot better than the fantasy football approach (if you’d like to read a .pdf of the full article, you can download it here). As she notes:

In a Sept. 2 order relevant to applications from both Westar Energy Inc. and ITC Great Plains applications to build a 180-mile section of transmission line called the V-Plan, the KCC gave its staff 30 days to write a report that summarizes the issues involved and propose a process and procedural schedule for resolution.

Here’s the chronology, as well as the major players:

ITC, an ITC Holdings Corp. subsidiary, applied to build the project April 11, and on Sept. 2 announced a collaboration with Mid-Kansas Electric Co. LLC and its generation and transmission arm, Sunflower Electric Power Corp., to build the parts of the line outside Westar’s service territory.

Westar is also proposing a collaborative effort, a new joint venture called Prairie Wind Transmission LLC. Westar’s partner is Electric Transmission America, which is in turn a joint venture between American Electric Power Co. Inc. and MidAmerican Energy Holdings Co. The new venture filed its application with the KCC May 19.

Wait, it gets even more complicated. What happens with this transmission case will likely affect other transmission cases in the future. This means other utilities with potential transmission issues also have an interest in the outcome. Therefore, they have the status necessary to intervene in the case.

The KCC’s order allows the two companies to intervene in each other’s cases. Others granted intervenor status include the Southwest Power Pool Inc., Great Plains Energy Inc. subsidiary Kansas City Power & Light, Sunflower and Mid-Kansas.

Mid-Kansas and Sunflower stressed in their intervenor filing that they had discussed the V-Plan with ITC but were not relinquishing their right of first refusal.

The Kansas Citizens’ Utility Ratepayer Board was approved as an intervenor in Westar’s application but not yet in ITC’s, pending a statutory comment period. CURB applied for the consideration Aug. 28.

SPP and CURB have their own interests as well. SPP is trying to carry out a giant planning process to smooth out and upgrade the grid in their territory - primarily KS, OK, and part of TX, also one of the most wind-rich areas in the country. Do they want one state to mess up their plans? Probably not, is my guess.

So what are these parties going to debate? The right of first refusal. According to Kerry:

A major issue in the proceeding concerns an incumbent utility’s right of first refusal: Once a project is deemed necessary, local transmission-owning utilities get the first crack at it. If the locals decide not to build the project, outside companies such as ITC then have their chance.

The concept was written into the KCC’s decision allowing ITC to operate as a utility in the state.

ITC’s Sept. 2 cooperation announcement touched on the concept, stating that Westar had been invited to build the Medicine Lodge-Sedgwick County segment of the transmission line, as that segment runs through the utility’s service territory.

Westar filed for consolidation of the three dockets, saying they are essentially one project, and to dismiss the ITC’s application based on Westar’s right of first refusal. The two companies then filed two rounds of heated responses and replies.

The KCC tabled the issue Sept. 2, saying simply that it “declines to rule on these two issues at this time and takes them under advisement.”

I would have to add - a week or two ago I sat in on a DOE conference call about their major new wind study, showing that the U.S. could potentially get 20% of its electricity from wind by 2030.

One of the major barriers to accomplishing this goal was cited as the “balkanization” of the U.S. electrical grid. This argument is that there are simply too many competing territories and regulators to get the grid in shape in a timely manner.

Right now, the case study of Kansas does not exactly refute this argument.

If this is the problem, what is the solution?

Obviously a lot of different things could happen. As always, one concern is the power of the unknown variable(s). The eminent domain power of the federal government under the Energy Policy Act of 2005 strikes me as a pretty significant variable. This provision allows the condemnation of transmission lines in corridors of national interest, which are areas of congestion.

Like everything, there’s probably an easy way and a hard way to go about transmission. In general, I’m not a big fan of hard ways.

Another note. The intervention of SPP into the case is very, very interesting.

Why? Because SPP is in effect an agent of the federal government. Through SPP, the federal government has already approved ITC Great Plains building part of the V plan. Now a state government agency - the KCC - is getting involved.

So. When it comes to transmission questions, who ultimately has jurisdiction?

Might this question lie further down the road, pending the KCC decision? The transmission world (already a confusing place) is changing. Could these jurisdictional issues soon shift as well?

I simply mention it. It also occurs to me that Kansas - we seem to have a gift - is once more on the front line of the energy debates. It is conceivable that how this transmission question plays out here could also have an impact on how it plays out in other parts of the nation.

However. There’s a hopeful, positive way to look at the current Kansas transmission situation. Arguably, this is a moment of unparalleled opportunity. Our state has yet another amazing opportunity to lead the rest of the country in exploring innovative solutions to energy dilemmas. Right? Right.

In the next six months, this is what we want the rest of the country to say: Can’t figure out your transmission problems? Don’t worry! Look at what Kansas did! They figured it out!

OK. Clearly time for the weekend. Everyone take care.

— Maril Hazlett, www.climateandenergy.org