OK Gubernatorial Candidates Cite Need for Improved Power Transmission System

Article excerpt

Due to dramatic planned growth in power generation in Oklahoma, the state must find a way to improve its transmission system or risk losing those new plants and an important component of economic development, according to gubernatorial candidates.

"The debate in the Legislature over the past few years has been centered around retail deregulation," said Sen. Brad Henry, D- Shawnee. "I think it's time we look at this issue of transmission."

"All of the transmission system in the country is antiquated. Ours is no more so, no less so, than any other state," said former Congressman Steve Largent, R-Tulsa. "But I think it would be an important investment for the state of Oklahoma to look at ways that we can modernize and add capacity in the bulk power grid in the state of Oklahoma."

Policy-makers believe Oklahoma could become a major power exporter if its transmission system is improved. Although the state has not deregulated its retail electric market, close to 20 new power plants or peaking units may be added to Oklahoma's system in the next few years. Since 1998, the Oklahoma Department of Environmental Quality has issued permits for construction of facilities that would add more than 13,000 megawatts of power generation in Oklahoma.

Most of the power producers have been lured to the state by federal incentives that provide rapid depreciation for facilities built on former or current Indian lands. Projects not located on Native American lands depreciate over a 20-year period. Under the federal act, set to expire next year, the depreciation schedule takes only 12 years - which saves power plant owners millions.

However, the onslaught of new power plants could create an energy glut in Oklahoma, since generation capacity is expected to outpace in-state consumption. According to a report prepared by the Oak Ridge National Laboratory and submitted to the Corporation Commission last November, consumer demand in Oklahoma is expected to grow 26 percent by 2010, totaling 14,340 megawatts. Total existing and proposed generating capacity is predicted to hit 25,690 megawatts by 2010, with a large fraction expected to come online in the next four years.

The report estimated that Oklahoma would have a 26 percent power reserve margin in 2010 even during hours of peak demand - a level that is not economically feasible for most power producers. A 10 percent reserve margin is the norm.

Because supply would exceed in-state demand, much of the electricity generated in Oklahoma would have to be sold to out-of- state buyers. But the state's existing transmission system isn't capable of transmitting the expected surplus across state lines.

There are currently only seven 345 kV lines that cross the Oklahoma state line, according to the Southwest Power Pool. Those lines can accommodate 4,200 MW of interstate transmission. An additional 345 kV line is planned for 2006, which could provide an additional 600 MW of transmission capacity. There is also one 230 kV line that crosses into the panhandle of Texas, with an estimated capacity of 200 MW. There are also 14 other 138 kV lines that cross the state border that could be used for interstate energy transfer.

When all existing and proposed interstate transmission lines are included, Oklahoma could have an interstate transmission capacity of about 6,050 MW by 2010 - leaving 37 percent, or 3,500 MW, of projected surplus power essentially stranded in Oklahoma.

For some officials, that scenario holds both peril and promise. Henry believes the state could become a national "transmission hub" if the transmission system is improved. He noted that the state's central location and abundant supply of natural gas to power electric generation makes Oklahoma a logical place to produce much of the power needed in the region surrounding Oklahoma.

However, paying for new transmission line is a politically touchy subject. …