The Southwest Power Pool, which oversees the power grid in southern and midwestern U.S. states, said Tuesday it has approved more than $1 billion of transmission projects to be developed from Nebraska to Texas.

The projects will improve the regional electric grid by reducing congestion on power lines, expanding power-transportation opportunities across the grid, and allowing new renewable and other power generation to be added to the grid, the group said.

To ensure the projects are built promptly, the SPP has asked federal regulators for permission to spread the costs of the projects among utilities that will benefit from the increased power-shipping capacity and electric reliability. Under the plan, filed with the Federal Energy Regulatory Commission earlier this month, project costs will be assigned to electric utilities across the entire SPP system, based on the utilities' historic use of the region's transmission system.

Utilities that own existing transmission lines and substations in the project areas will be given the "right of first obligation" to build the projects, said SPP spokeswoman Emily Pennel. If a utility chooses not to build a project, the SPP will select one or more other developers to build it, Pennel said.

The approved projects include: 345-kilovolt lines between Spearville and Wichita, Kan., estimated to cost about $360 million, which the SPP will first offer to Sunflower Electric Power Corp. and Mid-Kansas Electric Co. LLC--utilities owned by rural electric cooperatives--and Westar Energy Inc. (WR), which owns the existing transmission infrastructure.

A 345-kV line between Comanche County, Kan., and Woodward, Okla., estimated to cost about $110 million, will first be offered to Sunflower, Mid-Kansas and OGE Energy Corp. (OGE) unit OG&E, according to the SPP.

A 345-kV line between Woodward, Okla., and Hitchland, Texas, estimated to cost $250 million, will first be offered to OG&E and Xcel Energy Inc. (XEL) unit Southwestern Public Service Co.

A 345-kV line between Nebraska City, Neb., and Sibley, Mo., projected to cost $300 million, will first be offered to municipal utility Omaha Public Power District and Great Plains Energy Inc. (GXP) unit Kansas City Power & Light.

A 345-kV line between Valliant, Okla., and Texarkana, Texas, estimated to cost $130 million, will first be offered to American Electric Power Co. Inc. (AEP), as will an $840 million project to install new equipment in Tulsa County, Okla., the SPP said.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@dowjones.com
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