Officials of Southwest Power Pool Inc., which serves more than 4 million customers in Oklahoma and surrounding states, organized a committee that will work toward creation of a Regional Transmission Organization.

Denise Bode, chairman of the Oklahoma Corporation Commission, said a high priority of the regional agency would be the allocation of costs for the construction of new transmission lines to assure the reliability of service.

"This is critical for the average consumer, for the small business, for industrial growth in our region," she said at the Oklahoma City meeting. "Having abundant supplies of energy at affordable prices is fundamental to our new high-tech economy."

In one of several indirect references to the blackout last August in the Northeast, Bode said the reliability of reasonably priced power is important to the future economic growth of the Southwest, which has never suffered a widespread power outage.

"The new high-tech industries having been burned, perhaps in terms of reliability elsewhere, should be excited about this because we are the largest natural-gas-producing region in the country," she said. "We are building a significant new amount of electric generation. Like the car without a highway, we now have to build that highway to move that electricity."

Many of the new generation plants being built in the Southwest are gas-fired, which is considered a cleaner source of energy than coal-fired plants. And the Southwest is the major source of natural gas in the United States.

In an order issued last February, the Federal Energy Regulatory Commission gave the Southwest Power Pool, a group of 48 electric utilities, the go-ahead to begin formation of the RTO. FERC has encouraged regional group coordination and planning for the past five years. The agency's approval was conditioned on the power pool creating the committee and taking other steps to ramp up the RTO for final approval.

In the two-day meeting concluded Tuesday in Oklahoma City, regulatory officials from the eight states organized the committee and discussed policies. A major concern in the discussions was the future construction of transmission lines to strengthen reliability in the region.

Sandy Hochstetter, chairman of the Arkansas Public Service Commission, said the allocation of costs for future transmission is a major concern of Arkansas Gov. Mike Huckabee and many other southern governors.

"This is an opportunity for us to take a very strong state leadership role in determining what the cost-allocation policy should be," she said.

Hochstetter said the committee wants to encourage the allocation of costs to those who will benefit, improve reliability, minimize the impact on consumers and promote a more "robust wholesale market" for electricity.

"I'm a firm believer that we can use the (regional standing committee) to bridge this gap, this gulf we have between state and federal governments over these regional transmission issues," she said.

In the wake of last August's blackout, which affected an estimated 50 million people, there were calls from some in the industry for more federal intervention to settle disputes between states and others over new transmission lines.

FERC Chairman Pat Wood III said in a conference call Tuesday that regional cooperation from groups like the new Southwest committee is important to resolving disputes about transmission lines and other issues.

"We all know that new transmission does need to be looked at and most likely be built to gain the efficiencies that have been talked about in the region, but that will take money and we want to make sure it's thoughtfully spent and the right people pay for it," he said. "We can clearly get there, but we will get there much more swiftly and thoughtfully if the people who approved the power lines in the first place -- the state regulators -- are in the driver's seat when we're deciding how we're going to pay for them."

Wood said his agency's role is to step in only when there's a dispute that the parties cannot resolve.

"FERC's role at that stage is to break any ties or handle it when people can't work it out," he said.

The Southwest Power Pool, which has been a regional reliability council since 1977, has members in Arkansas, Kansas, Louisiana, Missouri, Mississippi, New Mexico, Oklahoma and a small part of Texas.

Most of Texas is in a grid administered by the Electric Reliability Council of Texas Inc., and separate from the rest of the nation. ERCOT serves about 85 percent of the state's electric load and oversees the operation of more than 75,000 megawatts of generation and 37,000 miles of transmission lines.

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