On Thursday, the Southwest Power Pool (SPP), a regional transmission organization that maintains and operates the electric grid across nine states, approved five “priority projects” that could form a model for future efforts to plan and share the cost of new transmission infrastructure. The projects, costing a total of $1.14 billion but delivering $3.7 billion in total lifetime benefits, would reduce congestion on existing power lines, better integrate the power pool’s east and west regions, and facilitate development of renewable energy for the grid.
In the press release, SPP President and CEO said:
“Traditionally, we have built transmission infrastructure in a reactive way – incrementally ‘patching’ the electric grid by building just enough least-cost transmission to keep the lights on.”
“Our members are now shifting to a new vision of enabling transmission. We want to proactively build a robust ‘transmission superhighway’ that will benefit customers not just of one utility, but across the entire region. We need an electric grid that will meet near- and long-term needs, and allow us to better manage many uncertain future scenarios such as carbon policy, varying fuel prices, growth in electricity demand, and state or federal renewable energy standards.”
Pending FERC approval, SPP will employ a novel cost allocation policy called the “Highway/Byway model.” Under the model, the entire region’s ratepayers share the cost of large lines (300 kV and above). The costs for lines between 100 kV and 300 kV, so-called byways, would be 33% covered by the region as a whole and 67% covered by the local area or state. Smaller lines will be paid for by developers. FERC is expected to approve the approach.