OMAHA, Neb. — SPP has approved its sixth competitive project under FERC Order 1000, a 345-kV transmission line in Oklahoma bringing “needed congestion relief” north of Oklahoma City.
There’s more to come. SPP also said it has classified two more transmission projects as meeting the criteria for being considered competitive upgrades.
SPP’s Board of Directors on May 6 endorsed an industry expert panel’s (IEP) recommendation to select Transource Oklahoma, with Transource Energy, to build the proposed 38.4-mile, 345-kV transmission line. Transource expects the Mathewson-Redbud project to cost $72 million and plans to energize the line in 2027.
The board also approved a bid from incumbent transmission owner OG&E Transmission, with ITC Great Plains, as the alternate builder. Their bid, the only other one submitted, had an estimated cost of $84 million. That proved to be the deciding factor.
OG&E and ITC both voted against the recommendation in the Members Committee’s advisory vote to the board. Five other members abstained from the 12-2 vote.
The IEP, comprising industry experts independent from SPP, unanimously recommended the Transource proposal. It said that while both bids were “capable” of financing, constructing, operating and maintaining the project, Transource’s bid “presented an advantage primarily based on lower costs.”
“Because there were only two proposals, the determining factor was the cost of the project,” it said.
“We felt good with that result,” Steve Strickland, the IEP’s chair, told the board and members. “We believed either respondent was capable of producing the project.”
The panel determined the project’s lifetime cost, as measured by the present value revenue requirement, would provide more than $14 million in savings to SPP customers. It said the OG&E-ITC bid provided a “more robust” engineering design that added costs and risks that “negated most, if not all, of those benefits.”
The five-person IEP met virtually and in-person after the Mathewson-Redbud project reached the criteria to be classified as a competitive upgrade. The project first was identified in the 2023 Integrated Transmission Planning (ITP) assessment as an economic project with projected costs of $110 million; it was pulled from the portfolio because some of its upgrades would qualify as a competitive upgrade. (See “MEAN Appeal of ITP Fails,” SPP ‘All Over’ Addressing Resource Adequacy.)
The panel evaluated the two bids through SPP’s competitive TO selection process, required under Order 1000. It scored the bids based on engineering design, project management, operations, rate analysis and finance.
SPP Director Irene Dimitry said OG&E, the incumbent TO, will handle the substation upgrades. That lowered the initial estimate.
Transource said it was “excited to get to work building this new transmission line” and support Oklahoma’s growing economy.
The developer is a partnership between American Electric Power and Evergy, focused on developing and investing in competitive projects nationwide. AEP owns 86.5% of the company.
SPP’s board annually forms a pool of industry experts that might be called upon to review, rank and score the competitive proposals. The grid operator already has solicited candidates for this year’s IEPs.
The panels will evaluate two projects that were part of the 2024 ITP:
- the 345-kV Belfield-Maurine-Underwood-Laramie River project, a 438-mile line that runs from the Laramie River in Wyoming up into the Dakotas and has an estimated cost of $1.1 billion; and
- the 345-kV Elm Creek-Tobias project on the western side of SPP’s footprint, an 85-mile segment valued at $887 million.
According to a report by consulting firm Concentric Energy Advisors critical of Order 1000’s success, MISO and CAISO have considered nearly 40 competitive projects between them. SPP has considered the third most (10) and approved of six:
- North Liberal-Walkemeyer
- Sooner-Wekiwa 345 kV
- Wolf Creek-Blackberry 345 kV
- Minco-Pleasant Valley-Draper 345 kV
- Crossroads-Hobbs-Roadrunner 345 kV
- Mathewson-Redbud 345 kV
The North Liberal-Walkemeyer project later was withdrawn.
The 2024 ITP was SPP’s largest portfolio in both size and value in its 20 years as a transmission planning coordinator. The plan includes 89 transmission projects, representing 2,333 miles of new transmission and 495 miles of rebuilds — including 1,900 miles of the RTO’s first 765-kV lines — to address increasing load growth and changes in the region’s generating fleet. SPP expects the portfolio’s benefits to exceed costs by a ratio of at least 8-to-1. (See SPP Stakeholders Endorse Record $7.65B Tx Plan.)
