A company that hopes to connect wind farms in the Oklahoma Panhandle with utility customers in Tennessee filed an application Friday with the federal government to establish rates for the project.
Clean Line Energy Partners plans a $2 billion high-voltage, direct-current transmission line across Oklahoma, through Arkansas and into Memphis, Tenn. Its application with the Federal Energy Regulatory Commission asks for permission to negotiate rates and sell service for the 600-kilovolt transmission line, called the Plains and Eastern Clean Line.
Michael Skelly, president of Houston-based Clean Line Energy, said he expects the FERC application process to take fewer than six months.
“There are a lot of dimensions to a project like this,” Skelly said. “There's a regulatory piece, there's a technical piece, a permitting piece and grid interaction. This is part of the commercial piece.”
The 750-mile project will transmit wind power to a Tennessee Valley Authority substation in Memphis. FERC approval will let Clean Line negotiate arrangements with either wind producers in the Oklahoma Panhandle or utilities in the southeastern United States, Skelly said.
“They can buy capacity on the line, and that commercial arrangement would be the underpinning to what we're doing,” he said. “(FERC) doesn't set our exact tariff, but they make sure we use an open process and they make sure our rates are just and reasonable.”
The company wants approval to sell 75 percent of the capacity for the transmission line to customers at either end of the project, with the remainder sold under what's called an “open-season” process. In May, Clean Line received FERC approval for its Rock Island Clean Line, a similar transmission project from Iowa to Illinois.
In the meantime, Plains and Eastern Clean Line representatives continue to meet with landowners, government officials, tribes and other stakeholders as it studies a proposed route for the transmission line from Oklahoma to Tennessee. More meetings are planned for later this year.
“We've been at it several years and it continues to move along,” Skelly said. “In March and April, we did a period of round-table discussions with county officials and interested stakeholders at locations between the Oklahoma Panhandle and Memphis. Public outreach is a big part of what we do.”
Plains and Eastern Clean Line already has agreements with Claremore-based Pelco Structural LLC to manufacture the monopoles for the transmission lines. The Oklahoma Corporation Commission last year approved Clean Line's application to become a “transmission-only” public utility. The company had a similar application rejected by Arkansas regulators but continues to seek other options to operate in that state.
Wind producers face an uncertain future after the expiration of a federal production tax credit at the end of this year. The incentive allows for a 2.2 cent per kilowatt-hour tax credit for electricity generated by wind. It dates to 1992, but Congress has let it expire a couple of times since then. Wind power groups said without the credit, it will be harder to secure the financing for the up-front costs of construction, leases and machinery for wind farms.
Skelly said Clean Line is taking a long-term view to the tax credit's expiration.
“We're optimistic that there's a place for this low-cost, clean energy over the long term as part of the U.S. energy portfolio,” Skelly said. “We think there will be some sort of incentive for a cleaner energy base; it may the form of the production tax credit, it may take some other form over the next few years.”
We're optimistic that there's a place for this low-cost, clean energy over the long term as part of the U.S. energy portfolio.”