ITC Great Plains' plans to invest in transmission infrastructure improvements in Kansas are one step closer to reality because of two important industry decisions rendered last week that prioritize the state's electric projects and more equitably address cost recovery associated with these projects.
By the action of its Regional State Committee, Southwest Power Pool, Inc. (SPP), the organization overseeing regional transmission planning in several states including Kansas, has approved developing a new rate structure for qualifying capital projects that apportions the costs of the projects over a broader geographic area, commonly referred to in the industry as a "postage stamp rate". SPP also approved its 2008-2017 Transmission Expansion Plan (STEP) document, which includes two high-voltage transmission projects sponsored by ITC Great Plains.
Both SPP actions will have a positive impact on ITC's push to improve electric reliability, facilitate renewable resources and support ongoing economic growth in Kansas.
"We are pleased that the SPP Regional State Committee has voted to create a progressive cost recovery system that will ensure transmission investment can remain ahead of the curve and meet current and future demands on the transmission grid while spurring regional economic growth," said Carl Huslig, president of ITC Great Plains. "We look forward to collaborating with SPP on projects that will strengthen the high-voltage grid in Kansas and help address the state's energy challenges."
ITC Great Plains announced last year that it would pursue the approvals needed to build two new transmission projects: a 180-mile high voltage line running between Spearville, Kan., and Axtell, Nebraska that has been awarded to ITC Great Plains by the Kansas Electric Transmission Authority (KETA); and the Kansas V plan, another 180-mile line connecting Spearville to Wichita.
ITC Great Plains is working through the process to qualify both projects for the balanced portfolio of projects for which the postage stamp rate is applicable. The company also will continue to pursue regulatory approvals with the Kansas Corporation Commission and the Federal Energy Regulatory Commission (FERC).
The postage stamp rate is SPP's first cost allocation mechanism for transmission infrastructure projects it designates as "economic." The effect of this postage stamp rate will be to spread the costs of these needed transmission projects across a broader customer base, thereby rendering financially viable projects that anticipate future transmission needs.