Texas is outpacing the rest of the nation in the development of new transmission, Electric Transmission Texas (ETT) president Calvin Crowder said in his keynote address at TransmissionHub’s TransForum Texas conference in San Antonio.
“We’re seeing other parts of the country with a lot of good ideas, a lot of good proposals, but not quite yet moving as fast as we are here” in Texas, Crowder said on April 25.
A large portion of the growth in the state’s transmission is due to the construction of approximately 2,600 miles of new 345-kV lines being built to transmit large amounts of wind energy from the state’s competitive renewable energy zones (CREZ) through a project approved by the Texas regulators in 2008.
“When we hit about 5,000 MW of wind [generation] in west Texas in 2003 to 2004, we started having some issues with getting that wind into the load centers, and that really is what brought about the CREZ,” Crowder said. “The governor and the legislature all committed to pursuing this renewable power, this low-cost power, and developing a plan to allow it to occur.”
Crowder, whose company is building approximately 20% of the CREZ lines, emphasized that the transmission will serve more than just wind generation.
“A lot of folks look at this as a wind transmission system,” he said. “Transmission is agnostic. We don’t care what type of generation hooks up to us; we’re going to move it.”
As in FERC-jurisdictional areas of the country, Texas provides open access to its transmission system. “If you build a power plant and you follow the rules, you’re going to get access to the system, so once this transmission is built, it’s going to serve whatever generation source shows up,” he continued.
As with many long-term projects, initial cost estimates have proven to be lower than the actual costs, but Crowder is not surprised by that development.
“There was an unrealistic expectation of a $4.9bn number,” he said. “The current estimate, according to the CREZ monitor report, is about $7bn.”
Crowder cited several reasons cost estimates are being revised upward. Initial cost estimates were in 2008 dollars, while most construction is taking place in 2012 and 2013. Initial estimates were for straight-line distances. Taking landowner rights and environmental factors into consideration has resulted in actual routes being longer than anticipated, “adding about 30% to the original estimate,” according to Crowder.
Finally, initial estimates did not include monies for contingencies, financing costs, or smart grid technologies that ERCOT has required be added to the projects, he said.
The Public Utility Commission of Texas, however, “continues to feel the benefit of bringing this wind power in continues to exceed the cost of the transmission. It is $7bn, but it is paid for by customers over 60 years, and so you spread those costs out and look at the value of the wind and you get a pretty clear message,” Crowder said.
Even before the CREZ lines are completed, wind generation is making a significant contribution to the state’s power needs. “We’ve been seeing wind deliver in excess of 20% of the total system load on some days just this past year,” he said.
One of the reasons for the state’s success, according to Crowder, is that utility leaders anticipate issues and “worry about things before they happen. Just like with the CREZ, we worried about the transmission before the wind showed up.”
Although originally motivated by the need to move wind-generated energy, Crowder said the CREZ lines will have a much more broad-reaching impact.
“We will have a 345-kV network in the west Texas and panhandle region that’s going to serve customers and generators for decades to come, and there is an intrinsic value in that it will encourage economic development and it will support the needs of the state, and that goes beyond the wind,” he said. “The wind did drive this, but we really are going to see a great build out of our network [and] it’s going to serve a lot of needs going forward for a very long time.”
With a transfer capacity of 18,500 MWs, the CREZ project is expected to be completed by the end of 2013.
ETT, a joint venture between American Electric Power (NYSE:AEP) and MidAmerican Energy Holdings, is constructing four CREZ projects: the Clear Crossing–Dermott 345-kV line; the Tesla–Riley 345-kV line; the Riley–Edith Clarke–Cottonwood 345-kV lines; and the Tesla–Edith Clarke–Clear Crossing–West Shackelford 345-kV lines.
Audio excerpts of Calvin Crowder’s remarks:
- Crowder provided a brief history of events that lead to the creation of CREZ.
- In developing the CREZ project, Crowder said the PUCT decided the project needed multiple developers.