Energy In-depth: MISO selects St. Louis power generator for first competition transmission project

Editor’s note: Each Friday, Talk Business & Politics provides “Energy In-depth,” a round-up of energy and regulatory news.

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MISO SELECTS ST. LOUIS POWER GENERATOR FOR FIRST COMPETITION TRANSMISSION PROJECT
The Midcontinent Independent System Operator (MISO) announced Tuesday (Dec. 20) that Republic Transmission, LLC has been selected through its competitive selection process to develop the Duff-Coleman EHV 345kV competitive transmission project in southern Indiana and western Kentucky. St. Louis-based Republic is a wholly-owned subsidiary of LS Power Associates, a privately held power generation and transmission operator. The Duff-Coleman EHV 345kV competitive transmission project is MISO’s first competitive transmission project under its FERC approved Order 1000 competitive developer selection process. The project is part of the MISO Transmission Expansion Plan 2015 (MTEP15) and is expected to be in-service no later than January 1, 2021.

Republic’s proposal includes one proposal participant, Big Rivers Electric Corporation, a member-owned not-for-profit generation and transmission cooperative headquartered in Henderson, Ky. In addition, LS Power and Hoosier Energy have entered an agreement for Hoosier Energy to acquire a percentage of ownership in Republic Transmission and provide operations and maintenance for the segment of the project in Indiana.

Republic was selected from a group of 11 qualified developers. MISO evaluated each proposal according to its competitive developer selection process based on four FERC-approved criteria used in the evaluation process, including cost and design, project implementation, operations and maintenance, and participation in the planning process.

ENERGY DEPARTMENT TO BEGIN SELLING CRUDE OIL FROM U.S. STRATEGIC STOCKPILE IN EARLY 2017
The Department of Energy’s (DOE) Office of Fossil Energy recently announced that it will sell crude oil from the Strategic Petroleum Reserve (SPR) as early as January 2017. The announcement came after a Continuing Resolution by Congress that included a provision for DOE to sell up to $375.4 million in crude oil from the SPR was enacted into law earlier this month.

This sale is the first of several planned sales totaling nearly 190 million barrels during fiscal years 2017 through 2025. These sales reflect provisions in several recent statutes, including sections 403 and 404 of the Bipartisan Budget Act of 2015 (BBA), the Fixing America’s Surface Transportation Act (FAST Act), which became law in December 2015, and the 21st Century Cures Act (Cures Act), which became law earlier this month.

As the largest stockpile of government-owned emergency crude oil in the world, the SPR was established to help alleviate significant disruptions in oil supplies from events such as major geopolitical events affecting oil supply, severe weather, and unplanned production, transport and delivery outages. Located in four storage sites along the Gulf of Mexico, the SPR holds more than 695 million barrels of crude oil as of Dec. 16, or about 97% of its 713.5 million-barrel design capacity.

SWEPCO SEEKS $69 MILLION YEARLY RATE HIKE IN TEXAS TO PAY FOR EPA RETROFITS
AEP Southwestern Electric Power Company (SWEPCO), a unit of American Electric Power, has submitted a request to the Public Utility Commission of Texas (PUCT) to increase the company’s Texas rates by approximately $69 million annually. If approved, new rates could go into effect in mid-to-late 2017.

The primary need for new revenue is to cover $34.4 million annually for additional investment in environmental controls at four major power plants, including the Flint Creek Plant in Gentry, Arkansas. The investments are necessary to comply with new U.S. Environmental Protection Agency (EPA) regulations, company officials said.

If approved by the PUCT, overall rates would increase annually by approximately $69 million, an average hike of about 12.7%. That means residential customers in Texas using 1,000 kilowatt-hours per month would see an estimated increase of $12.67 per month, or 13%. SWEPCO, headquartered in Shreveport, La., serves 530,000 customers, including 184,000 in East Texas and the Panhandle, 230,000 in northwestern and central Louisiana and 116,000 in western Arkansas.