Major power project clears first of many state regulatory hurdles

Source: Hannah Northey • E&E • Posted: Friday, October 28, 2011

Oklahoma regulators approved a $3.5 billion transmission project today that would connect wind farms in the Great Plains with customers in Southeastern states.

The Oklahoma Corporation Commission decision allows Texas-based Clean Line Energy to conduct business as a public utility plan its high-voltage direct-current (HVDC) power line to link turbines in the Oklahoma and Texas panhandles and western Kansas to the grid in Tennessee.

The “Plains & Eastern Clean Line” project still faces state regulatory hurdles in Arkansas and has not yet submitted an application in Tennessee.

Although no route has been identified, the project is expected to span 800 miles and carry 7,000 megawatts. The developer said the project would tap more than $14 billion worth of new renewable-energy projects that face grid constraints.

Oklahoma Corporation Commission Chairwoman Dana Murphy stressed that her agency has not given Clean Line permission to use eminent domain power for its project. “The power to decide whether Clean Line may take any real property after proper payment is in the hands of the district courts,” she said.

But the commission did order its public utility division to develop new regulations for the power line.

“We expect the rules providing for closer regulation of Clean Line and other transmission-only utilities to be ready for legislative approval during the upcoming legislative session,” Murphy said.

Clean Line has yet to file an application in Tennessee and is facing opposition in Arkansas, where regulators refused to grant the project “public utility status” because the power lines cross through the state without serving customers there (Greenwire, Feb. 24).

Clean Line is planning to work with regulators in Oklahoma, Arkansas and Tennessee, but the company is also eyeing unique alternatives on the federal level that have never been used before, said Jimmy Glotfelty, the company’s executive vice president.

Glotfelty said during an interview that Clean Line has submitted an application with the Department of Energy to enter into a partnership with DOE and a federal marketing administration under Section 1222 of the Energy Policy Act of 2005. Under the provision, the Energy secretary could act through a federal marketing administration to build and operate new transmission projects within the administration’s footprint if the project met certain criteria, including reducing congestion or meeting electricity demand.

Such a partnership would allow Clean Line to pay for environmental analyses, land acquisition and other development activities related to the project, but the Southwest Power Administration (SWPA), the regional power marketing administration, would have federal authority to site the line, Glotfelty said.

SWPA is one of four power marketing administrations, independent companies within DOE that market wholesale electricity for the West, Southeast, Southwest and Northwest.

Although Clean Line would prefer to find a solution with the states, such a partnership could help the company get the transmission project built faster, Glotfelty said. States would be still be involved in the environmental review process, and the project would have to be consistent with regional transmission plans, he added.

DOE and SWPA were not immediately available for comment.

“Right now in Arkansas, we’ve been turned down to be a utility because we don’t serve state customers,” Glotfelty said. “Until we can find a way around that, this would allow us to move forward to get transmission built.”