New Transmission Lines To Bring West Texas Wind To Dallas And Austin

Texas is the largest producer of wind energy in the United States by a wide margin.  In fact, Texas is one of the largest producers of wind energy in the world; producing more than all but a hand full of countries.   The development of the state’s wind portfolio has not come without its challenges and setbacks.  For a while it seemed that development of new wind capacity had gone too far; outpacing the ability of the state’s electricity infrastructure to make use of the electricity being generated by the wind turbines sprouting like dandelion weeds in West Texas.

This spurred a multiyear, multi-billion dollar, project to build giant new transmission lines to carry the abundance of West Texas wind energy to the electricity hungry population centers in the eastern part of the state; including the Dallas/Fort Worth and San Antonio metro areas.   The huge project has recently been completed and is expected to boost the state’s electricity infrastructure and further bolster the already impressive wind energy market in Texas.

The transmission lines were first conceptualized in 2005 when lawmakers ordered the PUC to create regions in the state targeted for renewable energy development.  The PUC designated 5 such zones known as Competitive Renewable Energy Zones (CREZ).

In total the project consisted of around 180 transmission projects with an estimated price tag of around $7 billion.  In the early days of the project the price was estimated at closer to $5 billion with 109 transmission projects.

The completed project is capable of transmitting 18,500 megawatts of electricity across thousands of miles of transmission lines. This increases the states capacity by some 50% and even further widens the gap between Texas and California, the nearest state in terms of wind energy capacity.

Wind is already a large and growing contributor to the electricity mix in Texas.  For example, on January 29th, 2013 wind accounted for fully one-third of the electricity needed across the state.   That displaces a significant amount of more carbon-intensive electricity generation such as natural gas and coal.  Natural gas is still the largest source of Texas electricity.

The integration between wind production assets and the state’s electricity grid is seen as a model for other electricity grids struggling to integrate renewable energy into existing infrastructures.   Texas has the benefit of having a more-or-less completely self-contained electric grid that is separate from most of the North American electricity infrastructure.  This allows Texas a level of control that other states don’t have. Not having to deal with a tangled knot of overlapping state and federal regulations and approvals has allowed the state to be successful in such a massive undertaking as the CREZ transmission project as well as other grid modernization initiatives.

The phenomenal growth in Texas wind capacity can be at least partially credited to the foresight of Texas planners who put these transmission plans into motion years ago.  Producers would have been quite reluctant to build new turbines without being assured of the infrastructure to sell their product to the more populous eastern half of the state.

Texans should expect to see new fees on their electric bills as the cost of the project is recouped.

See Also: Largest Federal Wind Farm To Be Built In Texas


Texas Electricity Rates Going Up – Again

In a move that was perhaps inevitable, the Texas Public Utility Commission has voted to double the current wholesale electricity price cap in Texas from the current $4,500 per megawatt hour to $9,000 per megawatt hour. This is the second wholes rate increase this year. Earlier in the year the commission voted to raise the then $3,000 price cap to the current $4,500 cap.

2011 Wholesale Electricity Rate Cap $3,000 per megawatt hour
2012 Wholesale Electricity Rate Cap $4,500 per megawatt hour
2013 Wholesale Electricity Rate Cap $5,000 per megawatt hour
2014 Wholesale Electricity Rate Cap $7,000 per megawatt hour
2015 Wholesale Electricity Rate Cap $9,000 per megawatt hour

Schedule of electricity rate increases

The commission has been searching for ways to increase electricity rates for Texas consumers. This is seen as a must in order to address the state’s electricity capacity concerns. The down-side to the cheap electricity rates in recent years is that electricity producers are not making enough money (so they say) to continue to invest in the Texas market and build new power plants to address pending power shortages.

Because Texas is a power to choose state, regulators don’t directly set electricity rates. Retail electric providers purchase power in the wholesale market from producers of electricity in order to resale it to residential and commercial users. In times of high demand relative to the amount of electricity available the wholesale rate can spike dramatically; often reaching the rate cap established by the PUC. It is during these relatively few times that electricity producers make most of their profit. The largest producers of electricity in the state includes Energy Future Holdings, who is also the parent company of TXU.

Officials hope that by tripling this rate cap more money will find its way into the pockets of producers and encourage them to invest more into building new power plants in Texas. Of course, the extra money going to producers has to come from somewhere. Inevitably it means higher electric rates for consumers.

According to numbers published by the Texas Industrial Energy Consumer group, the new higher rate cap would have cost Texas consumers up to an additional $14 billion had it been in place in 2011.

See Also: Water And Energy: A Double Dilemma In Texas
See Also: Will Texas Switch To A Capacity Market For Electricity?
See Also: Prepaid Electricity

More Legal Issues For The Parent Company Of TXU

TXU’s parent company, Energy Future Holdings, has yet another legal issue to contend with.  EFH is once again being sued over it’s highly pollutive Luminant plant in Longview, Texas.  The coal-fired plant, known as Big Brown, is one of the dirtiest in the nation, and the Environmental Integrity Project (EIP) and the Sierra Club are filing suit against it.

Luminant, TXU and Oncor were purchased together by EFH in 2006, and have lost massive amounts of money every quarter since then.  Luminant has three coal plants in North Texas that rank among the nation’s top ten worst polluting industrial facilities.  Those three plants (Big Brown, Martin Lake and Monticello) alone make up 25% of all the industrial pollution in Texas, and they account for 46% of all pollution related to electricity generation in the state.  That is staggering considering there are over 125 power plants of their size in Texas.

Dr. Neil Caiman, Air Program Director of the Lonestar Chapter of the Sierra Club, had this to say about the lawsuit:

Luminant self-monitors its plants, and according to the company’s own data, the Big Brown plant has violated the requirements of its own air permit thousands of times. What’s troubling is that Luminant’s Big Brown plant has very lenient pollution standards compared to other power plants, and the plant is still pumping out more than three times the legal limit. That impacts the health and wellbeing of Texans. For far too long Luminant has failed to clean up its harmful pollution and chosen not to install pollution controls, even as many other power plant operators were cleaning up their plants. Those days are over and in order to bring Big Brown into compliance, Luminant must decide if it will clean up the power plant or retire it.