The Federal Energy Regulatory Commission has unanimously approved Prairie Wind Transmission's request for key rate components in its proposal to build a 230-mile, 765-kV transmission line, extending from the Wichita area west to the Dodge City area and south-southwest to the Kansas-Oklahoma border from Medicine Lodge.
Prairie Wind Transmission is a joint venture between Westar Energy, Inc. and Electric Transmission America. ETA is a joint venture between wholly owned subsidiaries of American Electric Power and MidAmerican Energy Holdings Company.
FERC approved the following rate components:
- A return on equity of 12.8 percent, which includes incentive adders for participation in the Southwest Power Pool and investing in new transmission facilities that will reduce the cost of electricity and promote the public interest by providing for the interconnection and delivery of renewable generation in the SPP;
- The inclusion of 100 percent of construction work in progress (CWIP) in rate base during the development and construction period of the project after the formula rate becomes effective;
- The recovery of prudently-incurred investment costs in the project in the event that the project must be abandoned for reasons outside the company’s control;
- Regulatory asset treatment of pre-commercial expenses not included in CWIP that have been incurred to date, as well as expenses incurred going forward until the formula rate becomes effective.
FERC set aside for hearing the establishment of the formula rate and associated protocols.
“This is a significant milestone in our plan to build the first 765-kV line west of the Mississippi River,” said Kelly Harrison, president, Prairie Wind Transmission, and vice president, transmission operations and environmental services, Westar Energy. “The new line will provide reasonably priced and reliable electricity to customers, better access to renewable generation, significant environmental benefits and value to shareholders.”
Following the receipt of all necessary regulatory and cost allocation approvals, the new line is expected to be in service by the end of 2013.