Tres Amigas Wants to Take Cheap Electric Power Away from Hard-Working Texas Families

Michael Giberson

I spent the middle of last week in Austin at the University of Texas-Law conference on wind, solar and geothermal energy law, and as a side bonus got to hear some informal, Austin-based commentary on the Tres Amigas proposal to interconnect the Eastern, Western, and Texas electric grids. It will give you some idea of the thinking in the state capital that I heard the term “Dos Amigas” used more than a few times.

During the pre-conference “fundamentals” discussion, in response to a question that asked whether stronger transmission links to other states would help accommodate added growth in Texas wind power, a current member of the Public Utility Commission of Texas arose from the audience, climbed onto the dais, and took the microphone to say, among other things, “ERCOT is just fine the way it is.” The other main point of his comment was to suggest that the Southwest Power Pool, which has long covered the wind resource rich Texas Panhandle (with relatively weak links elsewhere, but a plan to beef up those links), would ably serve to sell the wind resource out of state while not compromising ERCOT’s jurisdictional status with respect to the feds.

Later in the conference a speaker offered a Texas policymaker’s view: ERCOT has its well-regarded CREZ plan to spend $5 billion on transmission enhancements primarily intended to allow wind generation in far west Texas, central west Texas, and the Texas panhandle to be delivered downstate to consumers in the Dallas, Houston, Austin, and San Antonio regions. If those lines link to Tres Amigas, then the prospect arises that consumers elsewhere will – in effect – “drink our milkshake.” Texas policymakers don’t want other consumers to drink our milkshake, especially after ERCOT consumers spend $5 billion to build there own transmission “straw” into the Panhandle region.  (Yeah, I watched “There Will Be Blood” a week or so ago, hence the milkshake and straw references. The presenter did not use this language.)

Peter Behr, writing for ClimateWire, has a more journalistic report on the debate over Tres Amigas. Behr reports that Occidental Petroleum – a large power consumer within the ERCOT region – has actively opposed the Tres Amigas project in filings at FERC, as has the Texas Industrial Energy Consumers. I haven’t read their filings, but apparently they believe ERCOT power prices will be higher on average with Tres Amigas than without, and as consumers they prefer lower prices.

In my opinion, however, they are more likely to get slightly lower (and somewhat less volatile) prices with better links to the rest of the grid.  That’s the way market expansion usually works.

Tres Amigas posts its FERC filings and related documents on its website. Here are links to a couple of the opposing views filed at FERC.  The “Supplemental Protest of Occidental…” includes the expert witness testimony that Behr discusses in his story:

Not all Texas policymakers oppose Tres Amigas. Member of Congress Randy Neugebauer (R-TX) sent FERC a letter indicating the project would encourage investment in renewable power and urging the Commission to give the project a “fair and deliberate view.”  And, as the ClimateWire story suggests, developers aiming to exploit the extensive power generation potential of the region are strongly behind the project.

6 thoughts on “Tres Amigas Wants to Take Cheap Electric Power Away from Hard-Working Texas Families

  1. Do Texas politicians complain when people in neighboring states buy Texas beef, and drive up the price of Texas BBQ? I guess it’s just too much to expect consistency.

  2. No, Tres Amigas is a DC link. DC doesn’t allow interstate commerce, and therefore can’t affect prices on either side. Right? Blocking Tres Amigas on the basis of the effect on the local power market wouldn’t constitute restraint of trade, because there is no trade across the DC links into ERCOT now , and because there is sufficient precedent in blocking the line from PV into SoCal. But that was AC, where electrons don’t actually move across state lines; they just wiggle. This one is DC, where the electrons actually DO move. Thank goodness the net electron flow is zero, or there might be a product crossing state lines. Oh, wait, electron flow is net zero in AC, too! Oh, how do we ever get anything done? Politics overrules economics, but ignores physics. 😉

  3. I’m in favor of keeping ERCOT and associated power systems and markets, etc., mostly under the regulatory authority of the PUC of Texas. However, I think the time has come to carve out explicit federal legal authority by which ERCOT continues to be regulated by the PUC of Texas without having to interfere with interstate commerce. Actual legal authority would avoid the need for these little filings asking FERC’s continued forbearance every time an ERCOT-linked entity wants to do something around the ERCOT/rest-of-the-fricken-modern-world boundary.

    Regularize the arrangement and allow ERCOT and Texas to continue the very useful “laboratory of democracy-stye” exploration and experimentation with market designs that differ from FERC-regulated RTOs. We need more experiments, not fewer, but let’s do it on the up and up so we don’t have to impede trade to allow it.

  4. My Dear D.O.U.G.,

    Missed out on Physics 101, did you? Skipped all the classes? Now hear this. AC or DC, makes no difference. Electrons flow, just like the earth moves. Go back to that class and learn the difference between and amp and a volt.

    As for all those who worry about prices going up, repeat the above exercise for Econ 101. When you open markets, prices go down, not up. Wanna keep prices high and control the market, close your borders, as ERCOT has surely done. As for Occidentals problem, they don’t want cheaper electric power replacing their expensive oil and gas, especially since they aren’t in the wind energy business as some other oil companies (BP and Exxon come to mind) have done.

  5. Note: the snide “Tom” above is not this Tom.

    This Tom made it far past Econ 101, where they let you in on the “secret” that many (and I believe most) markets are not efficient, and Econ 101 level analysis does not apply. Econ 101 results are normally only a rough approximation of reality, and they are often simply wrong.

    I also made it a ways past Physics 101, and I agree with D.O.U.G. In alternating current, electrons will wiggle, and some will drift, but they are not going to flow. Net electron flow is zero, in either case.

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