ERCOT targets West, South Texas for transmission investment as oil, gas demands increase

Though the recently completed Competitive Renewable Energy Zone (CREZ) transmission initiative in Texas has provided additional capacity and relieved constraints in West Texas, other portions of the state are dealing with congestion, constraints, and aging infrastructure, according to a report by ERCOT.

Statewide, several transmission improvements are planned for the next five years, according to the 2013 Electric System Constraints and Needs report, which shows that transmission providers in ERCOT expect to complete more than $3.63bn in projects between 2014 and 2018. These include additions or upgrades to more than 3,300 miles of transmission lines and other equipment improvements to increase capacity and support reliability.

The CREZ program, which resulted in nearly 3,600 miles of transmission line designed to transport renewable energy from the Texas Panhandle and West Texas to the load centers of Dallas-Ft. Worth, Austin, San Antonio, and beyond, was completed by the target date of the end of 2013 with the exception of one line that was delayed a matter of weeks by inclement weather. The program’s final cost estimate is expected to be $6.81bn.

Many of the new projects identified in ERCOT’s report will address demand that has grown due to increased oil exploration and related economic expansion in residential and commercial developments, ERCOT said.

“In West Texas the continued expansion of oil and natural gas recovery in the Permian Basin shale play has increased electric demand in the area causing a substantial amount of congestion on some transmission elements,” according to the Dec. 30, 2013, report.

As in 2012, the most significant congestion ERCOT experienced in 2013 was in West Texas. ERCOT noted, however, that transmission improvements in West Texas have alleviated some congestion, resulting in lower congestion costs compared to 2012. 

The report also cited increased demand in South Texas due to the development of the Eagle Ford shale play. ERCOT’s Regional Planning Group has approved eight projects totaling approximately $330.8m in improvements to address constraints in that area.

Five projects totaling $152.4m were accepted by ERCOT in 2012. Those are the Glidden-Colorado-Nada 69 kV upgrade project, the Karnes Electric Cooperative-Medina Electric Cooperative load addition project, the Coy City load addition project, the El Campo-Vanderbilt project, and the Karnes Electric Cooperative load addition project.

Three additional projects totaling $178.4m, were cited in the report. Those are the Sinton – Beeville – Kenedy Area Improvements project, the Kenedy Switch – Guadalupe project, and the Kenedy Switch – Nixon – Seguin upgrade, which includes a conversion from 69-kV to 138-kV service. Those projects are expected to enter service from 2014 to 2017.

Independent of the impact of increased oil and gas development, the Houston area is experiencing significant load growth, with which generation has not kept track.

“Persistent load growth in the Houston area has caused transmission lines by which power is imported into the area from the north to be highly congested in 2013,” ERCOT said.

ERCOT said long-term studies have consistently identified the need to increase the import capacity of the transmission system in the area and further noted that several transmission service providers have detailed reliability criteria violations by 2018 if solutions are not implemented.

ERCOT is conducting an analysis of three proposed solutions for the Houston area, which it expects to complete in early 2014. Lone Star Transmission, CenterPoint Energy (NYSE:CNP) and Cross Texas Transmission in partnership with Garland Power & Light, proposed projects to increase import capacity into Houston after independently conducting studies of Houston’s import capacity.

Lone Star and CenterPoint each proposed three transmission projects and Cross Texas and GP&L proposed one. The project estimates ranged in cost from $297m to $674.9m.

The report also identified Denton as an area that has recently experienced congestion due to an increase in load and to local transmission circuits being taken out of service to be upgraded. Four upgrades were recently completed in the area, and four more are planned and expected to enter service between 2014 and 2016.

Other areas where improvements are needed include the Lower Rio Grande Valley, where there are only two high-voltage circuits to carry power into the growing region, according to the document.

As previously reported by TransmissionHub, Electric Transmission Texas (ETT) has received approval to build a transmission line from Lobo into North Edinburg, and has an application before the Public Utility Commission of Texas (PUCT) for a joint transmission project from North Edinburg to the area around the Port of Brownsville.

The Lobo to Rio Bravo to North Edinburg project is a 156-mile, 345-kV transmission line that originates at Lobo and terminates in North Edinburg, Texas. The project is expected to cost $318m and enter service in 2016.

In total, the projects planned to enhance the capacity of the grid in that region are estimated to cost a total of $800m. However, at least one project is already underway.

ERCOT is also conducting a study on what transmission will be needed to accommodate the massive amount of wind generation that is projected to come online in the Texas Panhandle, a region that currently has no native load. That study is also expected to be completed in early 2014.

Improvements identified in the report focus on existing and potential constraints, where limited capacity of transmission infrastructure could create reliability concerns or increase power costs for consumers in the next five years.

In addition to shorter-term studies, ERCOT performs long-term studies that are released in even-numbered years that look at long-term needs under a variety of scenarios. The next Long-Term System Assessment will be released in December 2014.