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 2008.

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 planning process.

* 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.

Source: ERCOT

---