HOUSTON, July 15 (Reuters) - Oklahoma City-based OGE Energy Corp (OGE.N) said on Tuesday it formed a joint venture to construct a high-capacity transmission line in western Oklahoma to accommodate generation from proposed wind farms.
OGE and Electric Transmission America formed Horizon Transmission LLC to construct 765-kilovolt lines from Woodward, Oklahoma, 120 miles northwest to Guymon in the Oklahoma Panhandle and from Woodward 50 miles north to the Kansas border.
One cost estimate for both projects is $500 million.
“These extra-high voltage lines will not only help unlock the wind potential and opportunities for investment in Oklahoma, but also will provide a valuable renewable source of electricity to Oklahoma’s utility customers,” said Pete Delaney, OGE Energy chief executive officer, in a statement.
Electric Transmission America is a joint venture of subsidiaries of American Electric Power (AEP.N) and MidAmerican Energy Holdings Co, a unit of Warren Buffett’s Berkshire Hathaway Inc (BRKa.N)(BRKb.N).
OGE will own 50 percent of Horizon Transmission LLC. The partnership share capital costs related to the projects.
The new lines will complement a separate 345-kv project announced early by OGE’s Oklahoma Gas & Electric utility.
Another 765-kv line in Kansas has been proposed by an Electric Transmission partnership with Westar Energy WR.N.
That $600 million project, named Prairie Wind Transmission, calls for a line from Wichita, Kansas, west to near Dodge City, Kansas, and then south to the Kansas-Oklahoma border.
OGE said the the projects underscore the role of Woodward as an important hub for wind development, an area where power lines can collect power generated by wind and transport it to cities within the region and beyond.
The projects encompass the first two segments of an Extra-High-Voltage Overlay Study plan released in March by the Southwest Power Pool (SPP), a grid agency that oversees power flow in parts of eight states, from the Texas Panhandle to Missouri.
Development of a cost-allocation program that spreads construction costs among all utilities in the SPP region is extremely important, said OGE spokesman Brian Alford.
SPP expects to file for a federal tariff later this year, said Julie Parsley, a Texas Public Utility Commissioner who also serves as liaison to the SPP.
Parsley told Texas regulators earlier this month that resolution of the thorny issue of cost-allocation issue will allow major transmission expansion projects to move forward, relieving years of congestion.
“This is the best way to get things done,” Parsley said. “Everybody wins and everybody pays.” (Reporting by Eileen O’Grady; Editing by Christian Wiessner)