DALLAS - Texas utilities will invest $4.95 billion in transmission lines to deliver wind energy from sparsely populated West Texas to the growing urban areas under a plan approved last week by the Public Utilities Commission.
Public and private utilities will pool their investments and could create a new bond issuing authority to finance the transmission lines. The system is expected to begin operating within five years.
The plan approved by the PUC was the second of four scenarios designed to bring energy from the wind farms to utility customers in the major population centers. The plan calls for transmission of 18,456 megawatts of electricity, enough to power 3.7 million homes on a hot day, or 11 million in milder weather.
Public utilities expected to join in the financing plan include Austin Energy, the Lower Colorado River Authority and San Antonio's CPS Energy. Across the entire customer base, the cost is expected to come to $4 per month per customer.
Texas is the leading producer of wind energy, but like other states such as Colorado, it has fewer transmission lines than needed to carry the load.
The proposal comes as Texas oil billionaire T. Boone Pickens is launching a major media campaign to promote wind energy and other alternatives to oil. Pickens is investing $2 billion in Texas in what he calls the world's largest wind farm.
Pickens' plan for transmission lines to the cities dovetails with a plan to pump water from the Ogallala aquifer in the Panhandle to urban areas along the same right-of-way as the transmission lines. Pickens created an eight-acre water district in the Panhandle that will have the right of eminent domain along the route and will be able to issue bonds backed by revenues from the water sale.
In pushing ahead with his private wind transmission lines, Pickens cited the slowness of regulatory authorities to build the lines. But his plan was authorized under legislation that cut through the major regulatory barriers.
The law passed by the 2007 Legislature specifically permitted the use of the same right-of-way for alternate electricity transmission and water lines, granting the developer the right of eminent domain.
The wind-power transmission lines approved by the PUC emerged from the 2005 legislative session in SB 20, a measure that directed the Electric Reliability Council of Texas to identify the most efficient way of delivering wind energy from remote parts of the state. ERCOT developed four scenarios, ranging in cost from $2.95 billion and $6.38 billion.
The first scenario called for adding to the existing transmission system. That could expose the system to overloads because the existing substations might not be able to handle large influxes of power generated by wind.
A second approach, which was selected by the PUC, provides more incremental build-out and could take care of the overloads. But the second scenario requires more infrastructure. A third scenario called for costly high-voltage lines. And the fourth included high-voltage, direct-current lines. While that system was seen as efficient, it would require special equipment at the substations to convert power to alternate current for use in homes and businesses.