August 26, 2011
Texas

Cost of wind power lines blows past earlier estimate

By Tom Fowler, San Antonio Express-News, www.mysanantonio.com 25 August 2011

The cost of building thousands of miles of high-voltage transmission lines to bring West Texas wind power to major markets has risen nearly 40 percent from original estimates, according to a state report.

When approved by the Public Utility Commission in 2008, the plan to build lines to support as much as 18,500 megawatts of West Texas wind power was tagged at $4.9 billion dollars.

A quarterly update now puts the cost at $6.8 billion, an increase of 38 percent.

Early estimates said the cost of the new lines would raise Texans’ monthly power bills by about $4, but the higher price tag will push that fee closer to $5. Companies building the lines have not yet filed with state officials to begin recouping the costs, but that process might start later this year, Public Utility Commission spokesman Terry Hadley said.

Texas leads the nation in wind power capacity, with nearly 10,000 megawatts available from wind turbines built in the past decade.

Most of the wind farms are in rural West Texas, however, far from the major cities that use the most power, and without enough high-voltage transmission capacity to get the wind-generated electricity to those populous areas.

In 2008, the PUC and the Electric Reliability Council of Texas, which operates the state power grid, outlined several plans for building hundreds of miles of transmission lines, with costs ranging from $2.9 billion to $6.3 billion. The PUC eventually chose the plan estimated then to cost $4.9 billion.

The power line projects drew opposition from some Hill County landowners and a handful of legal challenges as the massive steel towers began to creep across the countryside.

Officials made the original cost estimates before completing detailed engineering and design work, and before securing all the rights-of-way. In some cases, the rights-of-way requirements grew because of decisions for the lines to follow existing paths instead of the most direct routes.

The original estimates also failed to include financing costs and the effects of inflation, and apparently didn’t include contingency markups that typically are in big infrastructure projects to allow for undefined variables and risks, according to the report.