Climate + Energy Project

Not to be alarmist, but after sitting in on a couple of days of SPP working group conference calls, it is at least clear that some significant opposition is coalescing to the Priority Projects. The projects could be in danger of facing construction delays that could drag on for years.

A major Kansas line – Wichita to Spearville, which would be built by Westar and ITC Great Plains – is one of the priority projects. Even if the SPP Board approved this line as early as January, it would likely be 2014 before the it was completed. By then, we will also likely have a national RES – and we want the transmission infrastructure to be in place, so our region and state can jump right in to these national markets.

If the line is delayed, we miss out. We all miss out. The SPP misses out on markets, and our state and region misses out on jobs.

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The Priority Projects are a batch of lines and stations that have long been studied and identified as crucial links in the SPP’s planned extra high voltage (EHV) system. They will benefit the entire SPP footprint by reducing grid congestion, integrating the east and west sides of the region, and by serving major interconnection needs.

The project’s exact cost allocation mechanism is not yet decided, but it will likely involve some percentage of costs being socialized across the SPP footprint, since these lines benefit the entire region. That means that Kansas ratepayers will not have to pay for the full costs of the e Wichita-Spearville lineall by themselves.

Yep. That’s part of the problem for some SPP members – paying for regional lines.

There are other arguments as well. One major line – ha – of resistance appears to be based in a clash between local (or zonal) and regional planning. Transmission used to be a very local concern, which helps to explain why our current grid is very patchwork. Regional planning for a backbone of extra high voltage is new to many people’s thinking. (Planning for the entire Eastern Interconnection could really get interesting, couldn’t it?)

Another argument is that there won’t actually be that much wind development in SPP. OK, calm down, if you are a Kansan – or Oklahoman, or Nebraskan, or Texan – who just jumped out of your chair and screamed at your computer screen. Keep in mind, we see wind developers all over the place, and we personally know hundreds of farmers and ranchers working on wind leases. However, there are also parts of the SPP footprint where this is not happening.

I just heard you scream again, telling me to look at all the signed interconnection agreements and the generation/ interconnection queue. (For those of you who don’t know, that’s how wind developers sign up to get access to transmission.)

Yes, SPP has more than 6,000 MW of signed interconnection agreements for transmission – legal contracts, mind you. Yes, thousands of megawatts more are still in the queue awaiting study for interconnection. Wind development in SPP is likely to go well over 10,000 MW. I believe that the Joint Coordinated System Study even projects a potential of something like 60 GW wind for SPP by 2024, doesn’t it?

(OK. I guess you can scream.)

Many of those who disagree with the Priority Projects are also now objecting to the modeling assumptions that went into the studies of their costs and benefits. I definitely recall sitting in on conference calls, though, where those assumptions were debated fairly exhaustively. My own sense was definitely that the assumptions grew out of a process where stakeholders had the opportunity to object and discuss them prior.

Another concern – so much new transmission being built at once has the potential to adjust balance sheets across the footprint. In good ways and bad, depending on where you stand. For every utility that has an opportunity to gain access to lower cost electricity due to better transmission, there’s is also another utility who is possibly no longer able to sell electricity at that higher price, due to more competition. A more competitive market will change how people do business.

Another element I found interesting – disagreement over the right blend of supply and demand in the transmission planning process. Some utilities within the SPP footprint might feel they do not want to buy wind. The next step in that thinking appears to be, then why build so much transmission for wind development. On the other side, wind developers want to sell wind, but not necessarily to utilities within the footprint. These developers have a right to transmission to get their product to market. The question was raised whether the two interests are balanced in the Priority Projects planning process. This discussion also relates to a conflict between local and regional interests, and how those are balanced in transmission planning more generally.

These arguments go way past the Priority Projects, of course. They are also aimed at the larger Integrated Transmission Planning process. However, the Priority Projects appear to have become proxies for that larger and often contentious discussion, and there is a possibility the projects could crash and burn as a result.

On the Cost Allocation Working Group phone call the other day, one of the participants stated that the Priority Projects were all but dead.

How true is that? Unclear. Other indicators will come from the Regional and State Committee meeting on October 26, and the SPP Board of Directors meeting on October 27. Not sure of the meaning of “dead,” either – does that mean killed outright, delayed for further study, delayed for other reasons?

The individual projects will likely still have to be built at some point – we can’t have an extra high voltage backbone system without them – but the question will probably be when. And for some of these Priority Projects lines, it’s already been quite a long wait.

— posted by Maril Hazlett, www.climateandenergy.org