September 21, 2014

Cross Valley transmission line brings changes

By KRISTEN MOSBRUCKER Staff Writer | Valley Morning Star | September 20, 2014 |

Major changes to the Rio Grande Valley power grid are coming, and power generators and electricity transmission companies anticipate they’ll bring a new playing field.

With an estimated $1 billion investment from American Electric Power (AEP) Texas, Electric Transmission Utilities (ETT) and Sharyland Utilities, a string of 150- to 200-foot tall, high-voltage power lines will soon be part of the Valley landscape, as construction begins on a 345-volt line cross-Valley line.

“This project will greatly impact not only MVEC members but all Valley electric customers,” said Phillip Amaya of the Magic Valley Electricity Cooperative, technical services division manager.

“The RGV has been in a mostly generation power import state for several years now, mostly due to the loss of the La Palma generation plant,” he added, referencing the 342 megawatt natural gas generation plant in San Benito that went dark in 2006.

Despite the transmission line company’s initial investment, the ultimate cost will be levied on electricity ratepayers of the Electricity Reliability Council of Texas (ERCOT) over the next decades.

ERCOT has yet to release figures on what the rate increase per household could be.


For some power generation companies, the cross-Valley line means new business possibilities.

Tenaska, a Nebraska-based natural gas generation company, is building an 800-megawatt capacity plant in Brownsville.

The cross-Valley line “is one of the factors that makes Brownsville an attractive location for the Tenaska Brownsville Generating Station,” said Mike Roth, Tenaska’s director of development.

To date, 200-megawatts are contracted through the Brownsville public utility board. The rest will be for sale in the ERCOT grid as of 2016.

But not all power generators agree ERCOT’s new transmission lines are necessary.

In Houston, Calpine and NRG Energy are lobbying the Public Utility Commission of Texas not to move forward with a proposed $590 million transmission line.

Meanwhile, ERCOT and Centerpoint, the company responsible for the project, argue that new generation plants can’t come on line fast enough. A commission hearing is scheduled for Oct. 17, when the energy giants will pose arguments on both sides.

Calpine, which owns Hidalgo and Magic Valley natural gas power plants in Edinburg, declined a request for an interview for this story.


Not all power running into the grid is equal.

Wind turbines, though touted as clean energy alternatives, can send a surge of electricity directly to the electricity transmission lines.

“The difference is that with coal and gas you can control the output better,” said Roger Duncan at the Energy Institute University of Texas at Austin, and former general manager for Austin Energy about wind power projects. “Other times they [wind turbines] may jam it because the wind output is variable – it all comes down to the capacity of that line.”

Duncan said with the advent of more wind power, the planned transmission line will likely be full within the next few years – especially if more coastal wind projects are approved.

Duke Energy Renewables, the solar and wind energy arm of Duke Energy, has heavily invested in the region, dropping $1 billion across five projects in Willacy and Starr Counties.

“The Cross Valley transmission line will increase and enhance the South Texas line capacity, thus reducing congestion and curtailment risk for wind projects,” said Milton Howard, an executive of Duke Energy Renewables.

“Capacity to Brownsville is limited and load is growing there,” he added. “In addition to helping wind projects like Los Vientos, this line will get power where it will be most needed.”

Duke owns Texas’ only battery storage system: A 36 megawatt system in West Texas meant to stabilize the frequency of electricity.

E.NON, another major wind farm company in the Valley declined an interview for this story.


Peak demand for power in the Valley is 2,300 megawatts, according to ERCOT. But the current total capacity of natural-gas plants is already nearly 2,000 megawatts, according to the council’s records, including 600 megawatts of wind power.

That number does not include the expected 800-megawatt Tenaska project in Brownsville, nor the 524-megawatt Frontera generation plant in Mission that plans to sell only into Mexico by 2015. But the expected growth in demand, said ERCOT officials, is anticipated to be 2,900 megawatts by 2020.

“You can’t just look at generation,” said Larry Jones, a spokesman for American Electricity Texas, one of the contractors of the Cross Valley Project. “System operators want to make sure there are multiple backups.”

He added that additional transformers can be added to upgrade lines to handle wind’s variability, but there is a question about who foots the bill.

On the one hand, a steady current means more industry can be drawn to the Valley, something politicians and cities covet.

“Overall, ERCOT declares an energy emergency when those operating reserves drop below 2,300 MW, including some demand response resources,” said Robbie Searcy, a spokesman for ERCOT. Reserves made such a drop during a statewide blackout in 2011. “It is important to have sufficient generation to maintain reliability in a variety of conditions, and the Valley currently relies on the generation in that area and additional power supplies from other areas of the ERCOT grid during peak demand.”

Meanwhile, economic experts argue that electricity is more fluid and the site of generation is less important, whether it be in North or South Texas.

“The presence or absence of local capacity used to be a crucial issue, but with today’s sophisticated market for power and improvement in the methods ERCOT uses to manage capacity constraints, it is becoming less relevant,” said Ray Perryman, an economist with the Perryman Group in Waco.

“This is not to say that there cannot be local issues with a lack of capacity, particularly in the heat of the summer of very cold periods in the winter,” he added. “But the root problem in such cases is typically more one of insufficient transmission capacity and congestion than it is a lack of generation capacity.”

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