AUSTIN, Texas — ERCOT’s Board of Directors last week added their endorsement of the Southern Cross Transmission (SCT) merchant project’s last three regulatory directives, imposed to determine whether it can safely interconnect with the Texas grid.

The project, a long-haul HVDC transmission line that would connect the Texas Interconnection with systems in the SERC Reliability region, has been under regulatory review for seven years. It will be capable of carrying 2 GW of power between Texas and SERC over a 400-mile, double-circuit 345-kV line.

More important to the Texas Public Utility Commission and the state’s leadership, SCT has FERC approval and a waiver from its jurisdiction, keeping ERCOT free of federal overview and maintaining its status as an island unto itself.

The project’s developer, Pattern Energy, called the board’s Aug. 16 action an “important milestone” and thanked ERCOT staff for completing the studies ordered by the PUC.

“Today’s action … represent[s] the completion of all studies ordered by the [PUC] to confirm the Project can be reliably interconnected with the ERCOT grid,” said Glen Hodges, Pattern’s vice president of business development. “Once completed, Southern Cross Transmission will provide substantial reliability benefits to all Texans who rely on the ERCOT grid, providing access to alternate sources of reliable and affordable power during emergencies such as Winter Storm Uri and the recent extreme heat-related demands on the grid.”

“For the last five years or so, we’ve been resolving the directives and getting this project ship shape,” ERCOT assistant counsel Nathan Bigbee said. “These last three [directives] get closure and regulatory certainty to move forward with this project.”

The directives are:

• 1: creates a new market participant type, “Direct Current Tie Operator.” A nodal protocol revision request (NPRR857) approved in 2018 created the DCTO role, but SCT has told the grid operator it does not plan to join an appropriate market segment at this time. That led staff to conclude no bylaw revisions are needed yet.
• 11: finds that costs identified by the PUC have been appropriately addressed by resolving each of the commission’s 14 directives and through a memorandum of understanding between ERCOT and SCT. Under the agreement, Pattern will fund the projects needed to accommodate the tie; it has already been compensating ERCOT monthly for related costs.
• 12: determines that costs associated with DC tie exports have been sufficiently addressed by the other directives’ resolution and that no further revision to any cost-allocation mechanism is necessary.

Bigbee told directors that SCT will affect voltage on the eastern side of ERCOT’s system. He said an NPRR will need to be drafted to ensure the project provides voltage support in the region.

The PUC asked ERCOT to address 14 directives and determine whether DC ties should be economically dispatched or subject to a congestion-management plan. Only Directive 2, which requires the grid operator to enter a coordination agreement with the balancing authority on the project’s eastern end, has not been completed. The project’s developers have said that directive is not necessary to the commission’s review and can be closed later.

Garland Power & Light owns the project’s western endpoint and holds a certificate of convenience and necessity granted by the PUC in 2017. The project developers have not yet announced an eastern endpoint.

PUC Commissioner Jimmy Glotfelty has taken the agency’s lead on SCT and filed a memo in January that said it’s time that the commission and ERCOT “close a chapter” on the project and allow it to “stand or fail on its own economic merits.” He believes the review can be finished by the end of October (46304). (See Texas Regulators Boost Southern Cross Project.)

The Technical Advisory Committee earlier endorsed the directives in June. (See “SCT Project Moves Closer to Reality,” ERCOT Technical Advisory Committee Briefs: June 27, 2022.)

SCT supporters got a minor scare when Board Chair Paul Foster mistakenly tried to bring the meeting to an early end just before the project was due to be discussed.

“So that concludes our agenda, and we are now adjourned. Thank you all,” Foster began before he was quickly interrupted.

“No, no. Sorry … we have a few more voting items,” ERCOT General Counsel Chad Seely said, keeping the meeting on track.

Grid United Files CCN in West Texas

A second HVDC merchant project is taking shape on the western side of ERCOT’s system, where Grid United, led by a familiar face, has applied with the PUC for a CCN (53758).

Grid United’s Pecos West project consists of two proposed 1,500-MW HVDC converter stations in ERCOT’s West Texas region (near Bakersfield) and El Paso in WECC territory. The project would bridge two Texas markets with 250 to 300 miles of an HVDC intertie line.

Michael Skelly, Grid United | © RTO Insider LLC

The company was founded last year by Michael Skelly, who serves as its CEO. Grid United says it seeks to tie regional grids together to improve resilience, increase the reliability of cheap renewable energy and reduce health hazards from fossil fuel energy production.

Skelly was also behind Clean Line Energy Partners, another long-haul developer that was working on five projects at one time, capable of carrying 16.5 GW of energy. Faced with political, regulatory and landowner opposition, Clean Line eventually was forced to sell most of its projects and was out of business by 2019. (See Out of the Game, Skelly Still High on Wind Energy.)

“Texas is blessed with an evolving and abundant power supply. … However, this abundance presents unique challenges, including volatile commodity prices and reliability concerns due to market structures that were not designed for the evolving energy mix the Texas grid is faced with today,” Skelly said in testimony filed with the PUC.

“These challenges, which are especially acute in West Texas where renewable generation has proliferated, will only increase over the decades to come unless steps are taken proactively to address them,” he said.

Grid United’s Texas subsidiary is only seeking approval of the interconnection and will file for full CCN rights once the interconnection is approved. The company says it will obtain all necessary FERC approvals to maintain ERCOT’s jurisdictional status quo.

Former FERC and Texas PUC Chair Pat Wood says the federal commission has policies that would protect the Texas Interconnection from federal interference if it were to strengthen its existing connections to the two national grids.

“We have the ability to build gates to the outside and not become vassals of another king,” Wood said during a panel discussion earlier this year. “We [would still be] in charge of our own grid — and that was built into the federal law.”