Texas commission to hear Houston Import Project dispute on Oct. 17

The Texas Public Utility Commission plans an Oct. 17 hearing on a complaint by NRG Energy (NYSE: NRG) and Calpine (NYSE: CPN) that an Electric Reliability Council of Texas plan to import power into the region around Houston unfairly harms generation resources within that region.

On Oct. 13, the Electric Reliability Council of Texas (ERCOT), Calpine, NRG Energy, Texas Industrial Energy Consumers (TIEC), CenterPoint Energy Houston Electric LLC, Cross Texas Transmission LLC (CTT), Luminant Generation Co. LLC and Luminant Energy Co. LLC, City of Garland, and commission staff filed their proposed schedule for the Oct. 17 hearing.

The parties have also agreed to file post-hearing briefs in lieu of closing arguments at the hearing. The parties propose that the briefs be due on Oct. 31, with a 25-page limitation for arguments. The parties request that the administrative law judge take this recommendation into consideration at the prehearing conference on Oct. 15.

On May 13, Calpine and NRG Energy had appealed an ERCOT board resolution of concerning a transmission line construction project known as the Houston Import Project. Calpine and NRG have said this project unfairly excludes new generation capacity built within the Houston region as a way to meet the region’s growing power needs.

Said the commission staff in its Oct. 10 brief: “In this appeal, this Commission is asked to consider the narrow question of whether, during ERCOT’s comprehensive review and ultimate endorsement of the need for the Houston Import Project (HIP), ERCOT violated any law, order, rule or binding planning procedure. The evidence in this proceeding will demonstrate that ERCOT properly followed the relevant laws, ERCOT Nodal Protocols (protocols) and procedures in reaching its decision that the HIP was necessary to maintain the reliability of the grid in the Houston area.

“The evidence will show that ERCOT’s process was transparent and followed all relevant procedures set forth in the existing protocols and planning guides for evaluating Tier One projects such as the HIP. The evidence will further show that ERCOT’s independent review and analysis, including ERCOT’s various adjustments to the [Steady State Working Group] base case model, were reasonable. In short, the evidence will show that the Commission should reject the Houston Generators’ appeal.”

Calpine and NRG are the “Houston Generators.”

“While the Houston Generators have identified a number of protocols, binding planning guide sections, and other materials that ERCOT has ostensibly violated, their case primarily focuses on ERCOT Planning Guide Section 4.1.1.1(5),” staff added. “This provision authorizes ERCOT make ‘reasonable variations’ to the load forecasts in the SSWG base case model in order to perform specific planning studies.

“In assessing the reasonableness of ERCOT’s variations in this proceeding, the Houston Generators have in turn focused on two issues. First, whether ERCOT’s various sensitivity studies, which utilized a variety of load scaling methods, constituted reasonable variations to the load forecast in the SSWG base case model. Second, whether ERCOT’s use of the ‘higher of’ and ‘90th percentile’ load forecasts likewise constituted ‘reasonable variations’ from the SSWG base case load forecast. Staff anticipates that the bulk of the evidence the Commissioners will hear at the hearing will focus on these issues.”

Previously in this case, Calpine and NRG said that ERCOT failed to take into account generation and cogeneration planned for the Houston region, including the Pondera King facility at 1,468 MW, which has an interconnection agreement. As for the 1,400 MW planned by NRG in the region, the company has pointed to: the Cedar Bayou Unit 5, 2×1 combined cycle gas turbine facility (about 700 MW net); and SR Bertron Unit 5, 2×1 combined cycle gas turbine facility (about 700 MW net). Both projects have been going through Texas Commission on Environmental Quality permitting.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.