Michael Giberson
On Thursday, Texas utility regulators selected nine companies to build portions of the nearly $5 billion-worth of transmission to better connect existing and anticipated generating resources in the western part of the state to the large consumer load centers in the east, central and southeast parts of the state. (Most of those existing and anticipated generators are wind powered, but so far as I know nothing in the rules would prevent a company from building a coal plant in west texas and getting access to the grid.)
This map posted on the PUCT website shows the approximate assignment of lines to companies. Note that one project in the McCamey area was assigned to STEC, but is not shown on the map. Click on the image for a larger view.
In the Fort Worth Star-Telegram, Jim Fuquay reports:
On Thursday, the Public Utility Commission of Texas identified nine organizations to build various segments of about 2,400 miles of power lines in the nearly $5 billion project. Transmission capacity now barely covers half of the state’s 8,000 megawatts of wind power, leading to curtailments among wind farms roughly half the days of the year.
Still, wind provided nearly 5 percent of the state’s electricity last year, the operator of the state’s biggest electric grid reported last week.
While you may wonder about the companies abilities to finance $5 billion in spending, Fuquay quotes Jim Owen at the Edison Electric Institute as pointing out that regulated transmission lines should be able to secure financing.
“Utilities are hugely capital-intensive,” Owen said, adding that speculative power-generation projects are running into roadblocks. “But if you have a regulated revenue stream, it helps significantly with the financing.”
Ah yes, the pleasures of doing business with captive consumers. The consumers have to rely on the wisdom of the regulators to keep a check on regulated utilities. It is often also worthwhile for consumers to keep an eye on regulators.
In this particular case, while I haven’t looked at the underlying analyses too carefully, I think if you assume state and federal incentives for renewable power development continue, then the transmission additions makes sense for consumers. Captive consumers throughout ERCOT will see an increase in the “wires” part of their bills to repay the expense of building the transmission, but these same consumers are likely to see more than offsetting reductions in the cost of buying power.
Notes: Related stories appeared in the Dallas Morning News, Reuters, and Greentech Media. You can find the map displayed above (and much, much more) via the PUCT Interchange site. Click the “Login” button at the top right; on the next screen enter the control number 35665, and click “Search Now”; scroll down, the map is item #1274.