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