SPP OKs $7.7B transmission plan targeting ‘generational challenges’ with power supply and demand | Utility Dive

The projects have benefit-cost ratios of at least 8 to 1 and are expected to pay for themselves within three years, according to the Southwest Power Pool.

The Southwest Power Pool board of directors on Tuesday approved a slate of 89 transmission projects with an estimated cost of $7.7 billion, aimed at addressing “reliability, economic, policy and operational needs” across its 14-state operating footprint

The 2024 Integrated Transmission Plan is the “single largest portfolio, in terms of size and value,” that SPP has proposed in its 20-year history, the grid manager said in a statement. The plan includes 2,333 miles of new transmission and 495 miles of transmission rebuilds.

SPP’s footprint “is facing a generational challenge as the need arises to balance new sources of demand, like data centers, crypto mining, mining, and oil and gas production, with the retirement of conventional resources that use coal and natural [gas] as fuel sources,” according to the plan.

The plan addresses “uniquely sharp load increases in New Mexico” by recommending a 765-kV line be developed from the panhandle of Texas to southeastern New Mexico, “delivering much needed energy to a remote area of the region.” Rapid load growth in North Dakota and South Dakota will be addressed through a network of new and upgraded lines across both states, it said.

SPP said its winter storm resiliency analysis also identified transmission projects that “improve system voltages throughout the approved target areas,” including transmission necessary for generation from outside of this area to reliably reach the loads.

“Increasing imports is especially important when the limited natural gas supply restricts local generation or transmission congestion prevents local generation from coming online,” the report said. “SPP also identified projects that increased the transmission system’s ability to transfer power from north to south within the SPP footprint by approximately 1.5 GW. This further increases resiliency against extreme winter storms by enabling SPP’s northern generation facilities which are hardened to withstand extreme temperatures to deliver power to the southern portion of SPP’s footprint.”

Ahead of the board’s decision, SPP said its Markets and Operations Policy Committee voted in support of the plan with 95% approval.

“The high degree of consensus among our stakeholders in support of such a significant infrastructure investment demonstrates the quality of this remarkable planning effort which is expected to provide significant value for years to come,” SPP Executive Vice President and Chief Operating Officer Lanny Nickell said in a statement.

The projects “are expected to quickly pay for themselves and provide benefits exceeding costs by a rate of at least 8-to-1 while improving grid resilience in the face of extreme weather events,” SPP said. By reducing costs, the projects will create savings of $10.55 to $11.47 on the average retail residential monthly bill, according to the plan. The projects are expected to be “cost beneficial within the first year of being placed in-service” and to pay back the total investment “within the first three years.”

“The magnitude of the 2024 ITP is larger than we’ve seen before, but the time is right,” said SPP Vice President of Engineering Casey Cathey.

“We’re seeing a large increase in demand for power throughout the nation and our region. Events like Winter Storms Uri and Elliott have highlighted the need for increased transmission capacity to ensure that all customers continue to receive reliable electricity service in the most challenging times,” Cathey said.