Louisiana Public Service Commission staff on Dec. 27 filed with the commission its report on Southwestern Electric Power Company’s (SWEPCO) application for the certification of the Leaside Way Transmission Project (LWTP).
Staff concluded that no approval is required under the commission’s General Order and that any commission approval of the LWTP is not intended to modify the requirements or exemptions as set forth in the General Order – which lays the groundwork for the commission to exercise its jurisdiction over the certification of certain transmission facilities in Louisiana to achieve the regulatory goal of promoting safe and reliable utility service at the lowest reasonable rates.
The General Order requires commission approval of any major transmission facility with a cost of construction projected to exceed $20m, staff said, adding that had this been an economic project rather than a reliability project, certification would be required since the estimated cost of the LWTP exceeds $20m.
The LWTP does not require certification under the General Order, staff said, noting that while the project qualifies as a “transmission facility” under the General Order, it is subject to an exemption. One section of the General Order exempts transmission facilities that are needed primarily or entirely for reliability purposes. Staff added that the LWTP qualifies for that exemption since it is needed to maintain and improve reliability in the southwestern part of Caddo Parish, La.
Staff noted that it recommends that the commission find that the LWTP is in the public interest since the project is needed for reliability purposes and is a cost-effective solution to current and future reliability needs.
As noted in the filing, the LWTP consists of building a new 138/69-kV substation (Leaside Way) along with three newly configured 138-kV transmission lines: the Leaside Way to Southwest Shreveport; Leaside Way to Stonewall; and Leaside Way to Western Electric.
The current Southwest Shreveport to Western Electric line would become the Leaside Way to Southwest Shreveport line and the Leaside Way to Western Electric line. Staff added that the current Stonewall Tap would become the Leaside Way to Stonewall line. Also, the Leaside Way substation would replace the Summer Grove 69-kV transmission line and would be located at the common connection point for the three new 138-kV transmission lines.
Staff added that there is expected to be a net increase of 0.5 miles in 138-kV transmission lines and a net reduction of 4.7 miles in 69-kV transmission lines is expected.
The project’s total cost is estimated at $24.7m, and American Electric Power’s (NYSE:AEP) SWEPCO would provide the funding, staff said, adding that the total cost allocated to the Louisiana jurisdiction is estimated at $9.1m. The initial annual revenue requirement is expected to be about $0.9m after applicable Southwest Power Pool (SPP) revenue credits are considered. Staff also noted that the average retail customer using 1,000 kWh per month is expected to see an increase of about 0.13%, which equates to an increase of about 14 cents per month.
In its application, the company said that the LWTP is needed to maintain and improve reliable service to about 26,653 customers, representing about 200 MW of load, in the southwest Caddo Parish area. Staff added that according to SWEPCO, the project would reduce time delays and voltage drops during faults that impair service. The project is expected to maintain and improve reliability for residential and commercial customers, as well as for industrial customers with tightly controlled processes, such as the Calumet Specialty Lubricants LLC Refinery in southwest Shreveport, and for the Willis Knighton Hospital South, staff said.
The project is expected to improve reliability due to a reduction in transmission line exposure from falling trees and tree debris, staff said, adding that according to company records, there have been 27 momentary and 13 permanent outages on the two transmission lines that will be replaced or rerouted, the Summer Grove 69-kV transmission line and the Shreveport to Stonewall to Western Electric 138-kV transmission line, over the past nine years.
Staff noted that the company also anticipates that the project would postpone the need to rebuild the Karnack to Baldwin to Woodlawn 69-kV and the North Marshall to Woodlawn 69-kV transmission lines. Both rebuilds have been identified as solutions to address overload conditions that are expected to occur by 2026 that have been identified in SPP’s recent 10-year ITP10 Summer model. Staff added that savings to ratepayers resulting from the postponement of the rebuild costs is expected to be about $17m total company, which would offset the capital costs for the LWTP.
Among other things, staff said that it recommends that SWEPCO must file into the record of the proceeding the post-construction report, as required by the General Order.