Arkansas grid operator SPP lowers planning reserve margins, awards first competitively bid transmission project

Southwest Power Pool’s (SPP) board of directors on Tuesday (April 26) approved a recommendation to lower the regional transmission organization’s (RTO) planning reserve margin and announced the grid operator’s first competitively bid transmission project in western Kansas.

According to SPP officials, the reduction of the RTO’s planning reserve margin from 13.6% to 12% will lower capacity requirements in SPP by about 900 megawatts (MW). The reduction is expected to save the organization’s load-serving members approximately $90 million annually, or $1.4 billion over the next 40 years.

“This action greatly illustrates the power of our stakeholder process,” said Lanny Nickell, SPP’s vice president of engineering. “Our staff and stakeholders worked together diligently to assess and confirm the feasibility and benefits of lowering our reserve margin, and thanks to their consensus-building efforts, our entire region will now benefit from improved reliability and capacity savings.”

The board also accepted the recommendation of an industry expert panel (IEP) complying with the Federal Energy Regulatory Commission’s (FERC) requirement to remove federal rights of first refusal for certain transmission projects. After scoring 11 competitive proposals, the board chose Mid-Kansas Electric Cooperative to be designated as the transmission owner responsible for construction of the “Walkemeyer” project, an estimated 22.6-mile, 115 kilovolt (kV) line from Walkemeyer to North Liberal in western Kansas. Oklahoma Gas and Electric was designated as an alternate if Mid-Kansas is unable to construct the project.

“SPP is very proud to have seen this competitive paradigm to completion for the first time. The effort was reflective of our commitment to our stakeholder process while meeting the expectations of Order 1000. We will work with our stakeholders to identify lessons learned and continually refine this new, competitive process,” said Paul Suskie, SPP’s executive vice president of regulatory policy and general counsel.

Construction of the Walkemeyer project will now follow SPP’s standard process, in which SPP staff will issue the designated transmission owner a notification to construct the approved transmission project, officials said.

In addition, the board approved 86 transmission upgrades representing $363 million in new engineering and construction costs, pending further evaluation of seven of those projects to assess their ability to optimally meet the region’s needs.

Proposed as part of SPP’s 2016 Integrated Transmission Planning Near-Term Assessment to address 262 projected reliability needs on the RTO’s transmission system, the portfolio of planned development includes a $20.5 million project to address needs in the Tulsa, Okla., area; a $30.5 million project to address needs near Woodward, Okla., through construction of a new substation and 138kV line; and a $145.7 million project to construct new substations and 115kV lines to address needs near the Bakken shale formation in northwestern North Dakota.

The further evaluation directed by the board is expected to be completed in July.