Dive Brief:
- Southwest Power Pool (SPP) leaders approved four over-budget transmission projects and sent three back to planners amid charges the cost estimation methodology applied to such projects by the regional transmission organization (RTO) is flawed.
- Of the 30 projects to which SPP committed for near-term and 10-year planning, costs of 23 are coming in higher than the acceptable 30%-above-estimate level, and costs for another three are lower than the acceptable 30%-below-estimate level, according to SPP officials. That leaves only four of the 23 projects in the RTO’s acceptable range for transmission project cost estimates, RTO Insider reports.
- American Electric Power’s Hobart-Roosevelt Tap-Snyder renovation in Oklahoma, which is a rebuild of a 10-mile, 69-kV line from Hobart to Roosevelt and of an 18.7-mile, 69-kV line from Roosevelt to Snyder, was estimated by a third-party engineer at $14.3 million but now is expected to cost $36 million, a 152% estimate inaccuracy.
Dive Insight:
Typical of the causes of transmission cost overruns, the Hobart-Roosevelt Tap-Snyder project required unanticipated right-of-way acquisitions, increased license and permit costs, added substation builds, and extra construction expenses in crossing the protected Mountain Park Wildlife Management Area.
The higher costs to meet AEP’s recommendation to design in a future 138 kV upgrade drew particular ire from SPP leaders because it seemed a ploy to get a higher capacity project budgeted in as a lower capacity line. SPP originally approved a 69-kV line, according to RTO Insider
SPP incorporates utilities and other generation, transmission, and distribution providers in 14 states across the Midwest and the South, from Minnesota and other Canadian border states to Louisiana and Texas on the Gulf Coast.
SPP serves 15 million customers and over 130 market participants, covers 370,000 miles of service territory, and operates over 48,500 miles of transmission in service to over 580 generating facilities which consume 18.9% gas, 58.8% coal, 11.8% wind, 7.9% nuclear, 2.5% hydro, and 0.1% other.
