Power struggle
OG&E objects to decision allowing ITC Great Plains to build in state
OG&E objects to decision allowing ITC Great Plains to build in state

By Jack Money

Published: June 6, 2008

The first round in a battle over what companies will have a chance to build future high-power transmission lines in Oklahoma nearly is over.

A Corporation Commission administrative law judge recommends designating a company that just builds, owns and operates high-voltage power lines as a public "transmission-only” utility within the Sooner State.

But exactly how that company — ITC Great Plains — might be regulated is a question mark, simply because no rules for regulating that type of utility exist.

Commissioners will consider the case next.

ITC filed for the status last year, saying it hoped to be recognized by the Corporation Commission so the company could pursue building high-voltage power lines across parts of the Sooner State.

Oklahoma Gas and Electric Co., a subsidiary of OGE Energy Corp., sought to block ITC's request, arguing the outside company would not be accountable to either the state or its residents if designated as a public utility.

The battle at the Corporation Commission may just be a preview of other battles to come.

Both companies have informed the Southwest Power Pool — the federal government's designated regional transmission organization overseeing system reliability for Oklahoma, Kansas and parts of other surrounding states — that they want to be involved in building pieces of needed upgrades to the region's high-voltage power network.

OG&E seeks to build needed upgrades within Oklahoma. But ITC Great Plains officials have indicated they are interested in building out the Oklahoma's part of the needed work, too.

Right now, OG&E is permitted through power pool rules to have a right-of-first-refusal on proposed transmission lines within its service territory. Company officials feared it could have lost that right in the case before the commission.

The Oklahoma Electric Power Transmission Task Force Study conducted by the power pool and released in April identified at least about $3.4 billion of expansion needs for high-voltage transmission lines and associated equipment to handle the expected wind power.

Part of the needed power grid work is called the "X Plan” by the power pool and utilities, and is an efficient transmission expansion plan for delivering wind energy created in the Central and South Plains to the existing electric grid.

The X Plan has been approved by the power pool's board and incorporated into a larger study of needed upgrades.

Power pool officials said the X Plan calls for a new line running from Spearville, Kan., south to Comanche, Kan., then back northeast to Wichita, Kan.

Further south, another line is needed between Comanche and Mooreland, and between Mooreland and Tuco, Texas. Another line is needed from Mooreland into Oklahoma City.

In August 2007, OG&E expressed its interest to SPP about building the Oklahoma parts of the X Plan.

ITC Great Plains submitted a letter expressing its interest about building the Kansas part of the X Plan the month before, and a witness for ITC in the corporation commission case said ITC is interested in building parts of the needed improvements for Oklahoma's power grid, too.

Judah Rose, managing director of ICF International, a company that advises numerous power companies and financial institutions, testified on ITC's behalf, saying both Oklahoma and the Southwest Power Pool would benefit if the Corporation Commission designates ITC as a transmission-only public utility.

"An independent transmission company brings different perspectives, capabilities and orientation in light of its lack of generation that can provide a vital complement to traditional utilities,” he testified. "It has no incentive to prefer its own generation over other sources and benefits directly from increased energy flows and use of its transmission facilities.

"It would provide an additional source of input into Oklahoma's regulatory process which will benefit Oklahoma's participation in regional transmission planning and development and provide the commission additional avenues for implementing policy,” he said.

Rose noted that ITC Great Plains not only has proposed to construct, own, operate and maintain the northern portion of the X Plan, but also has committed to build, own and operate the southern part of the same plan, including that within Oklahoma.

Philip Crissup, director of regional transmission affairs for OG&E, testified in the case that his company was concerned about adverse effects on the reliability of the state's transmission system if an outside company built the additions.

"If ITC Great Plains is granted public utility status in Oklahoma and begins constructing, owning, operating and maintaining transmission facilities here, it will not have any accountability to retail customers or to this commission,” Crissup said.

He also noted in his testimony OG&E's plans to build transmission lines from northern Oklahoma into Kansas and from the Mooreland area in northwest Oklahoma to Oklahoma City.

"From OG&E's perspective, we are doing our part to address needed transmission expansion in Oklahoma,” he said.

William L. Humes, an assistant attorney general, testified that his office had no concerns about ITC's request.

"The attorney general believes that having more providers of service, transmission or otherwise, creates greater competition within the state and results in benefits to ratepayers,” he said.

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