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June 26, 2010

Texas company asks to be Okie public utility

By Murray Evans Associated Press

OKLAHOMA CITY — A Texas company planning a $3.5 billion transmission line project has applied to become a public utility in Oklahoma.

The application by Plains and Eastern Clean Line Oklahoma, which is an affiliate of Houston-based Clean Line Energy Partners, with the Oklahoma Corporation Commission is only the second of its kind ever attempted, commission spokesman Matt Skinner said Friday.

The company filed a similar application with the Arkansas Public Service Commission in May. Clean Line Energy Partners said the filings are a key part of the development of a project that will include about 800 miles of overhead, high-voltage, direct current transmission lines running from the Oklahoma Panhandle through Arkansas to Tennessee. The lines would be capable of transmitting up to 7,000 megawatts of electricity.

The goal of the project, which could take five to seven years to complete, is to take advantage of abundant wind energy potential in Oklahoma, said Clean Line President Michael Skelly.

“The bigger trend here is people are trying to solve the challenge of getting more renewables on the (electric) grid,” Skelly told The Associated Press.

“Transmission is the big obstacle to continued development of the wind energy industry. We need major efforts in order to start to harness all that wind out there.”

There are 12 operational wind farms in Oklahoma — all located west of Interstate 35 — and three more projects are under development this year, according to state Department of Commerce spokesman Jason McCarty. The U.S. Department of Energy ranks Oklahoma ninth nationally in wind resource production, McCarty said.

Skelly said Clean Line doesn’t yet have buyers lined up for power that would be carried by the transmission lines, “but there is a lot of interest out there in Oklahoma wind from customers further east.”

Clean Line would be able to fund the project without seeking cost recovery from Oklahoma ratepayers because the company eventually could charge the beneficiaries who ship and receive electricity on the company’s transmission lines, Skelly said.

Skinner said the only other similar application ever received by the Corporation Commission was from Kansas-based ITC Great Plains. In September 2008, the commission issued an order allowing ITC Great Plains to operate as a transmission utility in Oklahoma and to build, own, operate and maintain transmission lines in the state.

Such “unusual” applications to become a public utility are the result of growth in the state’s wind energy sector, Skinner said.

“You need transmission lines from the place where the wind energy is the best,” Skinner said.

The Clean Line proposal is not on a list of priority projects approved by the Southwest Power Pool, a Little Rock, Ark., organization which manages an electric grid across Oklahoma, Kansas and parts of Texas, New Mexico, Nebraska, Missouri, Arkansas and Louisiana. Because of that, SPP spokeswoman Emily Pennell declined comment on Clean Line’s proposal.

Pennell said that the SPP is “continually doing transmission expansion planning” and that it is possible Clean Line’s proposal could someday be a part of the SPP plan.

Skelly said the Clean Line transmission lines “will serve new projects that will not get built unless we build our line.” He said he expects new wind farms would be built in the Panhandle if the Clean Line project proceeds.

How long the application process to become a public utility might take is uncertain, Skinner said.

The case will go before one of the commission’s administrative law judges, who will hear evidence from all parties to the case, for and against, Skinner said.

That judge will then make a recommendation to the three-member commission, who will make the final decision.

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