On Monday, April 19, the Southwest Power Pool (SPP) filed with FERC to adopt a new method for sharing cost for electric transmission in the SPP Regional Transmission Organization footprint, which includes all or parts of Arkansas, Kansas, Louisiana, Missouri, Nebraska, New Mexico, Oklahoma, and Texas.
If FERC approves, SPP will replace the existing base plan funding cost allocation methodology with a new “Highway/Byway” method.
The new methodology determines who pays for new transmission development based on the voltage class of the project:
- Highways (300 kV and above): Costs will be assigned to wholesale customers across the entire SPP footprint based on their historic use.
- Byways (below 300 kV): Costs are mostly assigned to the utility in whose service territory (zone) the project is located.
With their announcement, SPP representatives stressed the need for new transmission to make the best use of the region’s generating sources and described their cost allocation policy as one that not only enhances reliability, but also reduce costs for utilities and their customers.
According to Regional State Committee member and Arkansas Public Service Commission Chairman Paul Suskie,
“Building new transmission will bring many benefits, such as reducing congested bottlenecks on the electric grid, increasing grid reliability and efficiency, and creating jobs during the construction and operating phases. This Highway/Byway cost sharing methodology will provide a regional solution for building out the regional electric grid that will meet our needs into the future.”
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