AEP, MidAmerican Joint Venture Floats $4.2B Transmission Plan for Texas

Feb 27, 2007 NGI's Power Market Today

Electric Transmission Texas LLC (ETT), a joint venture of American Electric Power and MidAmerican Energy Holdings, wasted no time in coming up with a massive new transmission plan for Texas to support renewable energy development and load growth. The plan includes more than $4.2 billion in new transmission, including a 1,000-mile project that would support development of Competitive Renewable Energy Zones (CREZ) and a 900-mile, high-voltage, high-capacity backbone transmission system that would support reliability and growth.

"There is a critical need to expand the Texas electric transmission grid," said Calvin Crowder, ETT's executive director. "Our proposal includes phased development of a high-voltage, high-capacity transmission backbone for ERCOT [Electric Reliability Council of Texas] that will allow Texas to capture the long-term value of wind energy resources that are located in remote areas of the state and quickly interconnect those renewable resources to the load centers in the south, central and north-central parts of the state. Our proposal takes the process to the next level by also outlining a 21st century vision for the growth of the Texas transmission grid."

The first two stages of the ambitious proposal focus on ensuring transmission capability to meet anticipated renewable energy needs. Stage one would reinforce the ERCOT transmission grid, providing access to 8 GW of existing and planned renewable energy in north and central West Texas. The $1.3 billion stage one project would be completed in 2012. Stage two would support an additional 2 GW of renewable energy projects by 2015 at a cost of $1.9 billion.

"The third stage of the proposal, a visionary plan to establish an extra high-voltage bulk power delivery system, is much longer-term in scope and conceptual in nature," said Crowder. "Planning must begin now, however, to ensure the future viability of the ERCOT grid."

ETT submitted its plan through an informational filing with the Public Utility Commission of Texas (PUCT) the CREZ docket (No. 33672) on Tuesday. The company also will file its long-range proposal for consideration by ERCOT. ETT anticipates filing more details of its plan with the PUCT in April in accordance with the commission's timetable in the CREZ proceeding. The PUCT is expected to release decisions about the CREZ zones, including outlining necessary transmission investment, in July 2007.

Definitive paths for the proposed ETT projects have not been determined, and will not be determined without ample opportunity for public input, the company said. The long-range stage of the proposal is "conceptual and could change significantly."

"The proposal is not exclusive; other transmission developers will be welcome to participate," Crowder said.

An AEP spokeswoman said the $1.5 billion transmission project planned by Sharyland Utilities to support renewable energy and other generation in the Texas Panhandle region and West Texas actually would complement ETT's plans (see Power Market Today, Feb. 20).

"We want active participation and an exchange of ideas with other entities in working to refine this plan over the next several months," said Crowder. "The key for Texas is to develop a comprehensive plan with collaboration to avoid transmission constraints and costly overlap in transmission system development.

"Now that the renewable energy developers have indicated the areas of Texas that they believe offer the most potential for renewable energy development, ETT's proposal will reliably link those areas with load centers in the state. ETT can bring needed transmission online quickly by employing the expertise and capital of two transmission leaders."

In November, AEP and MidAmerican announced plans to establish ETT (see Power Market Today, Jan. 24). The company currently remains an AEP subsidiary, but will become a joint venture with MidAmerican upon regulatory approval and will operate as a transmission utility under ERCOT rules. An AEP subsidiary initially will act as project manager for the transmission projects.

Additional information about the ETT transmission proposal is available at http://www.aep.com/go/crez.

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