Early plans could threaten some proposals to build wind farms in the region and cut some Panhandle areas out of prime positions in the wind power race.
The Public Utilities Commission staff recommended last week that Panhandle wind projects send their electricity to the Southwest Power Pool – which covers the Panhandle and parts of Oklahoma and other states to the north – rather than directly to the rest of Texas.
That has one major wind-farm developer concerned.
“Is it a viable market based on the prices paid?” said Pat Wood, chairman of the North American advisory board for wind developer Airtricity. “Based on our analysis, it is not.”
Airtricity, a partner in the $1.5 billion Panhandle Loop plan to build wind, coal and gas generating systems and transmission lines, prefers to sell directly to utilities in Electric Reliability Council of Texas, the grid that covers the rest of the state.
“You would sell it into a much larger market and where it’s competitive,” Wood said. “I don’t think you will see some of the planned projects built if it goes to the SPP.”
Any price differentials could be temporary.
“Over time, these markets will change and there will be some equilibrium,” said Wes Reeves, spokesman for Xcel Energy.
Southwestern Public Service, a part of Xcel, would spend about $96 million to build the transmission lines to move the wind energy to customers in the SPP.
The SPP plan calls for 4,500 megawatts of wind energy to go out of the Panhandle, but 2,700 megawatts would go to ERCOT through new connections north of Dallas. Unlike ERCOT, the SPP is connected to all the other major grids in the nation.
But the cost of getting the power to population centers is a sticking point.
“Staff has concluded that it is more economical to develop transmission from the Panhandle projects to SPP rather than ERCOT,” said T. Brian Almon, PUC’s director of Electric Transmission Oversight.
While the Airtricity wind farms would be in and around Gray and Carson counties, Chermac Energy is planning to build in Randall, Deaf Smith and Castro counties. Jaime McAlpine, president of the company, looks at the proposed plan differently.
“The SPP proposal is at a considerably less cost to ERCOT to achieve similar results initially. Also the needed transmission can be achieved quicker,” he said.
While there are requests from wind developers to connect projects capable of generating more than 1,000 megawatts to the Southwest Power Pool, McAlpine said the Panhandle Loop is still needed.
“We also want the Panhandle Loop done and I believe the Panhandle Loop will be done, but I think it will take at least two years longer to accomplish than the SPP proposal,” he said.
PUC commissioners will have to approve a final plan and that is scheduled to happen by July.
“I think commissioners will want to have that wind energy in the state,” Wood said.
The alternate plan to send electricity to SPP calls for construction to last until 2015, Reeves said. It would not move the 8,000 megawatts envisioned in the Panhandle Loop plan.
“It’s a matter of cost,” Reeves said. “We can only do so much at one time. We’re thinking long-term, but we’re focused on what we need to do now.”
Another part of the PUC staff’s recommendations would delete two Competitive Renewable Energy Zones proposed to cover parts of eight counties in the northern Panhandle. That would mean those counties would be left out of plans to rush the construction of transmission lines to move wind energy to areas outside the region.
To designate CREZs, the staff considers whether suitable wind energy and land areas to develop it exist, the level of financial commitment of developers, the estimated cost of constructing transmission capacity and the estimated benefits of the energy to be produced.
ERCOT identified 25 zones and ranked them numerically by how much potential wind energy could be produced in them. Zones 1-4 and 21 are in the Panhandle. According to testimony from the PUC’s Almon, only zones 1, 2 and 4 should be approved.
Developers did not file statements of financial commitment for zones 3 and 21.
“I am concluding that, even with wind potential and in some cases actual development and operation of wind projects, the potential developers do not believe a CREZ designation would benefit their particular project,” Almon said.
In addition to the possible CREZ’s under consideration, BP Wind Energy North America nominated Childress and Hardeman counties to be included in a CREZ, but did not provide sufficient wind potential information, according to the PUC.
By Kevin Welch
29 April 2007
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