By Tom Kleckner
LITTLE ROCK, Ark. — Lubbock Power & Light’s recent announcement it was planning to take 400 MW of SPP load and join ERCOT hung heavy over the Strategic Planning Committee last week as it tried to determine what to do next.
Golden Spread Electric Cooperative’s Mike Wise, the SPC chair, teed up the issue by asking whether SPP staff should conduct a transmission study of the area to determine whether LP&L’s departure would result in stranded investment.
“Transmission is built for and paid for by everybody,” Wise said. “Will there be transmission infrastructure out there that wouldn’t be needed if LP&L leaves?”
“I can tell you no facilities were built just for Lubbock,” said Bill Grant of Xcel Energy, which currently provides all of the city’s energy (forecast to be 626 MW in 2019) through its Southwestern Public Service subsidiary.
Effective June 1, 2019, when LP&L will also begin receiving power as a member of ERCOT, Xcel will provide only 170 MW of Lubbock’s needs.
“What led to this, and what can we do about it? Will this be the first time or the last time it happens?” Grant asked.
SPP Director Harry Skilton echoed Grant, expressing a need to “understand [LP&L’s] motivation and whether we should be doing something to alleviate whatever incentive they had for moving.”
LP&L, the third-largest municipal electric utility in the state, said joining ERCOT will reduce its energy and capacity costs. (See Integrated System to Join SPP Market Oct. 1; Lubbock Looking at ERCOT.)
“Prices in the ERCOT area are lower than SPP’s. We can debate whether that’s temporary or not,” said Carl Monroe, SPP’s executive vice president and COO. “The second issue is we have a capacity-margin requirement, and ERCOT doesn’t.”
“Load will come and go. Businesses move from one location to another,” said Dogwood Energy’s Rob Janssen. “Let’s face it … ERCOT built transmission lines in West Texas that overlap with SPP’s, so some customers in the area have a choice as to which system to be on.”
Monroe said SPP has no withdrawal fees to discourage load from leaving the RTO. “The only withdrawal provisions we have today are for withdrawn transmission, not load.”
SPP Vice President of Engineering Lanny Nickell said SPP could run studies of the areas. He also said SPS, which has owned the transmission interconnection with LP&L since 1983, could also request re-evaluations of notifications-to-construct to determine whether planned projects are still needed.
Asked whether any projects with NTCs in the area might be affected by the withdrawal of LP&L’s load, Nickell said he “was not aware of any projects directly impacted by Lubbock leaving.”
Grant said Xcel has identified a couple of impacts on its radar screen, and it will “take a closer look when the projects get close to breaking ground.” But he cautioned that the committee might be getting ahead of itself, pointing out LP&L has only announced its intent to join ERCOT and that the Texas grid still must conduct a feasibility study.
“We’ll know when the studies are done … we’ll know way before June ’18,” he said, referring to LP&L and ERCOT’s final decision date. “We’ll know in time what we need to reflect in our own models.”
In the meantime, SPS has filed a Freedom of Information Act request to obtain LP&L’s feasibility study, Grant said.
“We have no idea what numbers they came up with, or how they came up with the numbers, or whether they’re feasible,” he said.
