ERCOT Report Proposes $3 Billion in Transmission
Jan 7, 2009 - POWERnews
The Electric Reliability Council of Texas (ERCOT)
is reviewing proposed transmission projects for the
next five years totaling $3 billion, the state’s main
grid operator said in a report filed with the Public
Utilities Commission (PUC).
If the PUC approves seven major projects, they could
add or improve 2,888 circuit miles of transmission
and more than 17,000 megavolt-ampere (MVA) of autotransformer
capacity to the grid, according to the annual electric
system constraints and needs report (PDF).
The report also analyzes costs to resolve zonal congestion
(between the four congestion zones) and intra-zonal
congestion (local). Although zonal congestion costs
had been trending downward over the past few years,
from $146 million in 2001 to $52 million in 2007,
costs in 2008 increased to $360 million, primarily
due to a combination of events, including high fuel
costs, revised shadow price caps, and increased wind
generation. The ERCOT Board of Directors implemented
emergency market rule changes in early summer to mitigate
the high congestion costs.
Intra-zonal congestion costs are approximately the
same as they were in 2007. Local congestion costs
decreased from over $405 million in 2003 to $164.4
million in 2007 and $146.8 million through October
The five-year report does not include the Competitive
Renewable Energy Zones proposed transmission improvements—a
plan to bring wind power from west Texas to the state’s
major cities. That plan is being reviewed separately
by the PUC.
Texas Senate Bill 20 directed the commission to designate
zones with sufficient renewable resource potential
and financial commitment by developers and then to
designate a plan for transmission to the areas. The
commission has recommended a transmission scenario
to support the addition of 18,456 MW of renewable
generation at a cost of approximately $4.93 billion
in transmission. Commissioners are expected to designate
in 2009 which entities will build the transmission.
Improvements to the grid completed since 2007 totaled
approximately 1,294 circuit miles of transmission
and 6,613 MVA of autotransformer capacity with an
estimated cost of $1.2 billion.
Along with the five-year transmission report, ERCOT
also filed the Long-Term System Assessment (PDF),
which looks at transmission and generation options
for the next 10 years. The long-term system report
is filed with the Texas Legislature and is intended
to provide guidance to ERCOT and ERCOT market participants
in evaluating system needs.
The 10-year report concluded that, among other things:
* Additional import capacity into Houston is needed.
Although an import pathway into Houston from the west,
such as from the Fayette to Zenith substations, was
generally cost-effective across a range of scenarios
included in this study, the specific pathway should
be reviewed and selected as part of the ERCOT five-year
* Load growth in two areas (north of Dallas in Cooke
and Grayson Counties and in western Williamson County)
may result in the need for long-lead-time transmission
projects in the next 10 years.
* Economic benefits from most transmission projects
were dependent on the location of new sources of generation,
fuel costs, and emissions allowance costs. Given the
uncertainty associated with the future development
of baseload generation, it is not reasonable to plan
large inter-zonal projects at this time.