Texas regulators are narrowing in on a reliability plan for what one said will be a “monumental infrastructure buildout” and could include 765-kV transmission to meet growing petroleum and data center demand in West Texas. 

Native West Texan Lori Cobos is the commissioner behind the quote and leader of the Public Utility Commission’s effort to add transmission infrastructure supporting the oil-rich Permian Basin. She proposed during the PUC’s Sept. 12 open meeting three regulatory proceedings to secure the reliability plan’s approval (55718). 

Cobos recommended approving local projects required to serve the Permian through 2038; authorizing transmission service providers (TSPs) to begin preparing applications for five import paths into the region; and creating a monitor to oversee the plan’s completion. 

The reliability plan builds on a recent ERCOT report that projected oil and gas load peaking at nearly 15 GW by 2038 and an additional 12 GW of data center and other non-petroleum load by 2030. The total would come to about a third of the system’s current summer peak. Based on those projections, ERCOT said building the transmission facilities to meet that load could cost up to $15.32 billion. (See SPP Considering 765-kV Solution for Permian Basin.) 

The grid operator’s staff studied two case years, 2030 and 2038, and grouped projects as either local or import paths. The local projects are independent of the study years, while the import paths consist of 345-, 500- or 765-kV options. 

ERCOT filed an addendum to the plan identifying a new endpoint for one of the import paths. It said the new endpoint would “better align” with the PUC’s recommendation allowing TSPs to begin their preparatory work while the commission decides on voltage levels. 

Commissioner Jimmy Glotfelty, who has almost a decade of experience building HVDC lines, said if he had a magic wand, he would push for 765-kV lines over 345 kV. 

“Let’s just do the 765 and get it over with, but I recognize that we’re not all there, so I think the path forward that you’ve laid out in your memo is right,” he told Cobos and the other commissioners. “The only one question that I have is the default back to 345. I would almost like that reversed, but that’s not something we need to solve today.” 

PUC staff recommends the commission adopt the 2038 case’s import path, noting 90% of the forecasting load for that year also is present in the 2030 case year. They also suggested waiting until mid-March to approve the import paths’ voltage levels. 

Representatives from the petroleum industry agreed with the approach, saying earlier is better. ERCOT also said it could work with any of the PUC’s recommendations.  

Citing concerns from the region over the need for certainty on the plan, the grid operator’s Kristi Hobbs, vice president of system planning and weatherization, said the TSPs “desire to start working on the [certificates of convenience and necessity] that take a lot of time to go through the contracting periods before they can actually file at the commission, so that allows that work to start now.” 

ERCOT is hosting a workshop at its Austin headquarters Sept. 18 on extra-high-voltage (EHV) lines. Vendors in the space will share information on supply chains, timelines, costs, construction timelines and operational characteristics of EHV lines. The grid operator also has added an EHV transmission plan to its annual Regional Transmission Plan, which will be filed in December. 

The Permian reliability plan is a result of legislation passed last year and is due Jan. 30, 2025. The PUC will consider the issue again during its Sept. 26 open meeting. 

“I think we’ll see a lot of economic development as a result of this. I think it’s going to pay for itself over time because of the amount of economic development that’s going to come as a result of that,” Glotfelty said. “765 is used in the U.S. It’s used in Canada, it’s used in Brazil, Venezuela, Russia, South Africa, South Korea and India. It’s been used since the ’60s, so this isn’t a new technology. It’s just new to us at ERCOT.” 

CenterPoint Case Delayed

The commissioners extended CenterPoint Energy’s appeal of a recent court ruling rejecting its request to withdraw its rate case, saying they want to hear from Houston residents first (56211).  

The PUC is hosting a workshop Oct. 5 in Houston to give CenterPoint customers and others a chance to weigh in on CenterPoint’s slow restoration of power after July’s Hurricane Beryl. It agreed to take up the matter during its Oct. 24 open meeting. 

“I think it’s important that before we make any decision, we go through that process and have our hearing in Houston,” Gleeson said. 

The State Office of Administrative Hearings (SOAH) in August rejected CenterPoint’s request to withdraw its rate increase to recover $6 billion of investments made since its last rate proceeding in 2019 and expand its return on equity. SOAH said the withdrawal would conflict with state law requiring investor-owned utilities in ERCOT to file a comprehensive rate review within 48 months of their most recent rate proceeding. (See CenterPoint Energy Still in Eye of the Storm.) 

The commission has been directed to file a report on CenterPoint’s restoration efforts with Gov. Greg Abbott by December. It has received more than 16,000 responses to a public questionnaire and an additional 120 responsive filings from utilities, cities and trade associations. 

Engie-ERCOT Dispute Deferred

The commission heard oral arguments but took no action on a two-year dispute between Engie North America and ERCOT over compensation for the response reserve service (RRS) the company provided during the February 2021 winter storm. It deferred making a decision until a later open meeting. 

Engie and Viridity Energy Solutions ask to be reimbursed $47.5 million or credited for the 27 MW of RRS it delivered each day during Feb. 15-19, 2021. ERCOT said the complainants did not provide the RRS after Feb. 15, citing their failure to have confirmed trades for the ancillary service in the day-ahead market during those days. Engie and Viridity contend that following normal procedures was effectively impossible during the storm, when ERCOT’s grid came within minutes of a total collapse (53377). 

SOAH’s law judges in June rejected the Engie and Viridity complaint. They found the complainants did not show that ERCOT’s actions violated any applicable law. 

At issue is the grid operator’s requirement to have capacity that supports an ancillary service trade or offer. Its protocols define capacity for noncontrollable load resources as their net power consumption minus low power consumption, which is the load available for interruption. 

Engie’s legal counsel said the load resources lost their capacity when deployed, preventing them from being scheduled in the next day-ahead market. Engie and Viridity sought remedial relief to receive $47.5 million for the service they provided during the storm. 

ERCOT says the evidence indicated Viridity benefited by not participating in the day-ahead market, avoiding $65 million in ancillary service imbalance charges. 

PUC Adopts EOP Report

The PUC also adopted staff’s recommendation to approve a report on the power sector’s weatherization preparedness and companies’ emergency operations plans (EOPs). The report is due to the state legislature, which directed the report last year, by Sept. 30 (53385). 

Business management consultant Guidehouse reviewed 691 electric entities’ EOPs, checking the grid’s ability to withstand extreme weather events in the coming year. It found the sector is “largely prepared” across the state for extreme weather, and its participants exhibit “basic” emergency preparedness programs and have measures in place to respond to weather events. 

The firm noted its review was limited in scope and did not “comprehensively” cover resource adequacy, weatherization, system-hardening efforts or spare critical inventory. Guidehouse’s suggested improvements included financial penalties for noncompliance and a greater focus on EOPs’ actions to withstand extreme weather events.  

“One example identified in multiple EOP submissions is the inclusion of a detailed list of food items needed for an entity’s staff during emergency situations … but the plans did not include strategies or equipment needs for field response,” the report said. 

About 70% of applicable entities provided EOPs or affidavits on no material changes. Guidehouse said the remaining 30% were “overwhelmingly low risk.”