By Tom Kleckner

RAPID CITY, S.D. — SPP’s first competitive project under FERC Order 1000, approved by the Board of Directors with some fanfare in April, is being canceled because of falling load projections.

The Markets and Operations Policy Committee last week accepted staff’s recommendation to withdraw the project’s notice-to-construct. The 22.6-mile 115-kV line from Walkemeyer to North Liberal in southwest Kansas was awarded to Mid-Kansas Electric. The board is expected to finalize the decision when it meets next week. (See SPP Awards First Order 1000 Project — But it May Not Be Needed.)

Al Tamimi, vice president of transmission planning and policy for Sunflower Electric Power, which operates Mid-Kansas, said the line was no longer needed because of a drop in forecasted loads from oil and gas exploration. Mid-Kansas officials said they had seen a 27% slide in load forecasts within the project’s region since the initial study was done three years ago.

Mid-Kansas asked SPP to re-evaluate the need for the transmission line when it won the construction bid in April. Staff’s analysis indicated the area’s load projections had dropped from 173 MW to 25 MW. Even when the project is removed from the planning models, staff found there would be no thermal or voltage violations until 2070.

The Walkemeyer project’s noncompetitive first phase, a new 345/115-kV substation and transformer and a 1-mile line to the Walkemeyer 115-kV station, will still be built.

The transmission line “was very dependent on the highest load forecast. We told you this 14, 15 months ago,” Tamimi said. “I don’t care whether it’s a FERC 1000 project or not, if the load is not there, why am I going to do” the project?

Mid-Kansas’ bid was chosen from 11 evaluated by a panel of industry experts, who were compensated for their time.

Millions Wasted?

Bob Burner, director of commercial transmission development for Duke Energy, questioned why SPP issued the solicitation, noting Mid-Kansas’ re-evaluation request came after bidders “had gone through the effort and expense to submit proposals to the [request for proposals], probably at the expense of hundreds of thousands of dollars.”

“Millions,” murmured one stakeholder.

“Developers in a project do accept reasonable risk,” Burner said. “I don’t know the solution, but there has to be something better than what we just went through.”

“I understand that as a participant in this process, I participate at some cost,” Westar Energy’s John Olsen said. “Maybe we can reimburse minimal costs in the future to those who participated in that solicitation.”

Southwestern Public Service’s Bill Grant, chair of the Competitive Transmission Process Task Force, said his group will seek improvements to the competitive process in their future meetings.

“This is a difficult conversation that needs to happen. We will look at whether we can reimburse participants,” Grant said. “Maybe there was a point where we could have raised a caution flag before going through the rest of the process. I don’t know that FERC will allow us to pass those costs on to customers.”

Other Projects

The MOPC also accepted staff’s recommendation to withdraw an NTC for a 115-kV reactor and approve a rebuild of a 138-kV line near Shreveport, La. Staff indicated the reactor would no longer be needed before its break-even point, and that rebuilding the Linwood-South Shreveport line would save $3.55 million without the reactor. American Electric Power will build the project.

However, members rejected a recommendation to replace a 115-kV line in western North Dakota with a 345-kV line as part of SPP’s re-evaluations of the 2016 Integrated Transmission Planning Near-Term assessment.

Basin Electric Power Cooperative requested a re-evaluation of its planned 33-mile transmission line between a pair of substations because of what it called inaccurate models and siting difficulties. Staff recommended replacing the original 115-kV project with a 345-kV line to address a nearby load pocket, but it failed on a roll call vote.

A follow-up motion to approve the 345-kV line, but operate it at 115 kV, was also rejected. The 345-kV project is estimated to cost $63.6 million, the other $50.9 million.

Members did approve a staff recommendation to issue three NTCs and withdraw two NTCs for projects deferred in April, all part of the 2016 ITPNT portfolio.

The withdrawn NTCs included AEP’s 69-kV rebuild in West Texas, estimated to cost $31 million, and Westar’s new 230-kV substation and transformer in Kansas, pegged at $21.7 million. AEP did get NTCs for a pair of 69-kV line rebuilds in West Texas, projected to cost a combined $10.4 million, while SPS received an NTC for a 115-kV line, substation and transformer at $11.6 million.

The MOPC also unanimously approved staff’s recommendation to re-set the baseline cost for a pair of projects outside the bandwidth. A Westar 69-kV rebuild and a Mid-Kansas 138-kV line are both more than 20% under budget.