T. Boone Pickens has placed a massive order for wind turbines with General Electric, a big step toward building the world’s largest wind farm in the Panhandle.
Mr. Pickens’ company, Mesa Power LLP, plans to announce today that it ordered 667 turbines from GE for about $2 billion.
That will produce 1,000 megawatts of power, more than the average nuclear power plant, and enough juice to light 300,000 homes.
And it’s just a quarter of the turbines that the legendary oilman plans to erect near his ranch in Pampa.
By 2014, Mr. Pickens wants to have 4,000 megawatts of windmills turning in a $10 billion to $12 billion project.
“We want to make Pampa the wind capital of the world,” Mr. Pickens said. He’s leased land in Carson, Gray, Hemphill, Roberts and Wheeler counties for the project.
But he faces one knotty problem: Moving the power from the rural Panhandle to populous North Texas.
Mr. Pickens has a novel solution.
Texas has more wind power than any other state, with 6,903 megawatts. But wind capacity has grown faster than the transmission lines to accommodate the power.
The Public Utility Commission is in the process of ordering transmission lines to accommodate new wind power. Commissioners could designate a line to Pampa, even though the wind farm would sit outside of the Texas grid, operated by the Electric Reliability Council of Texas.
If they don’t, Mr. Pickens said, he’ll just build his own private transmission line.
That could rock the traditional regulatory framework of a grid paid for by all power users and extend Texas’ experiment in deregulation to a whole new side of the industry.
The PUC developed scenarios for new lines that could cost between $3 billion and $6.4 billion, depending on how much power the lines would carry.
Those power lines would be built by electric delivery companies. The companies would then apply to the PUC to pass along the cost directly to electricity consumers as a fee on their utility bills.
But if necessary, Mr. Pickens is willing to eat that cost to build his wind farm.
Building the transmission line would cost Mesa about $2 billion, said his lawyer, Bobby Stillwell.
“It’s not common. Most people want to have them rate-based, and that adds to your financial returns. But it’s not absolutely necessary for the success of the project,” Mr. Stillwell said.
PUC spokesman Terry Hadley said the commission’s role isn’t clear in the case of a private transmission line. He said the PUC would have to at least approve the new line.
Mr. Stillwell said he expects Mesa will end up building a portion of the line, and rely on ratepayers for the rest.
“He’s doing something that we never thought about,” said Steve Wolens, a former Texas legislator who wrote the laws that allowed wholesale and retail power companies to set their own rates but left power lines regulated.
“He’s going beyond maintaining a monopoly of the wires. Very interesting.
“It makes regulators and legislators rethink the system,” said Mr. Wolens, a partner in the Dallas office of law firm Diamond McCarthy.
By Elizabeth Souder
15 May 2008
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