CONSUMERS to help pay for multibillion-dollar power line expansions

Sunday, August 5th 2001, 12:00 am

By: News On 6

TULSA, Okla. (AP) _ Utilities will have to spend billions of dollars putting in new power lines to meet the growing demand for electricity in the coming years, an industry survey says.

Consumers will likely pay part of the tab.

At least $56 billion _ equal to half the expected investment in new power plants nationwide _ will be needed to improve transmission systems over the next decade, according to the EPRI, formerly the Electric Power Research Institute.

Transmission lines draped from high steel towers ferry electricity from power plants to local distribution systems that connect to homes and businesses.

With electricity demand continuing to rise in the information age, more transmission capacity is needed to accommodate growing sales from new and existing power plants.

``The transmission piece of this is a sleeper issue that people aren't focusing on,'' said Jim Owen with the Edison Electric Institute, an industry trade group that commissioned the study. ``People are looking at the power plant issue and the supply issue.''

Hundreds of new generating plants, including 19 in Oklahoma, are being built or proposed, but there is little construction of new transmission lines.

``The transmission capacity is not capable of accommodating all these (new) plants,'' said Jim Wilson, manager of government relations for OG&E, Oklahoma's largest utility.

Transmission glitches have contributed to California's electricity crisis and officials have warned of possible outages from overloaded lines in northern New Mexico.

In Oklahoma, constraints in past summers forced limited power curtailments to some industrial customers. Interruptions, allowed under supply contracts, were necessary so power on full transmission lines could be used elsewhere during periods of peak demand, said Ken Zimmerman with the Oklahoma Corporation Commission.

Stuffed lines have hindered summertime shipments from Kansas into Oklahoma. Conductors between Oklahoma and Arkansas are nearing capacity, officials said.

Transmission systems are highly interconnected among utilities grouped into regional power pools originally formed to ensure reliable supplies. Sales between utilities and between utilities and independent generation companies have become common in systems that have become open-access toll roads for power sellers and buyers.

The Federal Energy Regulatory Commission sets rates that utilities can charge to ship power for outside companies, and utilities say they need to charge more to fund transmission line construction.

Acquiring new rights of way across private land and building the towers and lines can cost up to $1 million a mile, although some systems can be expanded by installing larger conducting cables on existing towers.

The Southwest Power Pool, which includes power companies in Oklahoma, Arkansas, Kansas, Louisiana and parts of Texas, Missouri and Mississippi, estimates roughly $243 million could spent for six major transmission expansions.

One 275-mile line from the Texas Panhandle to central Oklahoma could cost up to $80 million.

Taken together, the projects would enhance shipments over the entire grid because the system is so interwoven. A new transmission line in Oklahoma could help accommodate power shipments elsewhere, said Bruce Rew, the power pool's coordinating manager.

The regional power pools are being folded into four or five larger regional groups by the FERC. The larger transmission organizations will oversee expansion and continue to coordinate power sales.

While the lights were flickering in California earlier this year, Oklahoma lawmakers postponed deregulation for two years pending further study of generation and transmission capacity. A task force report is due out by November 2002.

Independent power generation companies pay now to hook up to existing transmission grids. But generators and utilities are debating how much each should pay to fund additional expansion to enable interconnected grids to accommodate more sales.

However the bickering plays out in the next few years, consumers could shoulder part of the financial share delegated to utilities, which can pass some costs along if regulators approve.

``All our costs are normally passed through to ratepayers,'' said Alan Decker, director of regulatory affairs for AEP-Public Service Company of Oklahoma, a division of Columbus, Ohio-based American Electric Power.

After the larger regional pools are formed, the FERC will set tariffs that could effectively determine how the cost of adding transmission capacity would be shared, Decker said.

Even if Oklahoma consumers can eventually chose between different power supplier, the distribution and transmission systems would continue to be regulated because they are natural monopolies.