The Federal Energy Regulatory Commission has approved a new “Highway/Byway” method of sharing costs for new electric transmission in the Southwest Power Pool (SPP) region, which includes all or parts of Arkansas, Kansas, Louisiana, Missouri, Nebraska, New Mexico, Oklahoma and Texas.

This approach, which assigns costs of high-voltage transmission regionally and lower-voltage locally, will help SPP and its members build a stronger transmission grid that will benefit the entire region.

“Sharing costs and benefits of more transmission highways and byways will increase our ability to deliver lower-cost power to customers, allow us to make the most efficient use of the region's diverse generating resources, and help us meet state and federal policy goals such as increased use of renewable energy,” said SPP President and CEO Nick Brown. “The electric grid is in use every second of every day, so the economics of transmission aren't just long term but instantaneous. A robust grid optimizes economics and improves electric reliability.”

SPP analyses demonstrated that large-scale extra high-voltage highways provide benefits across a wider region; thus, costs will be assigned to electric utilities across the SPP footprint based on their historic use of the region's transmission system. Lower-voltage byways benefit smaller areas within the region; a formula will be used to assign costs more directly to the utility in whose service territory (zone) the project is located and that will receive the most benefit from the project.

The new cost-sharing method will apply to transmission-expansion projects approved by the SPP board of directors, including a set of priority projects conditionally approved in April 2010 pending successful implementation of the highway/byway policy.

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