The 765-kilovolt (kV ) transfer series project, which was also a topic of discussion during the Texas Senate Committee on Business and Commerce hearing on Wednesday, was one of two important issues discussed during the hearing.
The Electric Reliability Council of Texas ( ERCOT ) responds with a new approval process after large load users like data center companies have recently been gaining a lot of attention.
Grid congestion has been a recurring theme in state trials, with plans to build 765 kV lines as part of the Permian Basin Reliability Plan to move East Texas power across the state to meet growing West Texas need. In West Texas, the strategy aims to ease congestion and improve grid reliability.
Congestion
At the hearing, panelists and lawmakers discussed “integrating home distributed energy sources, strength storage, and other network technologies” as well as reducing network congestion.
Ryan King, ERCOT’s director of industry design, said that if you use the right resources at the right time, you can actually reduce system congestion.
He continued,” System congestion is a very valuable product these days, and so what these resources can do is]be strategically deployed to help reduce congestion, ]and ] make better use of the existing grid.”
The congestion dilemma is based on the idea that, while congestion typically causes energy grids to have higher costs, limited power flows and transmission constraints can help to stop overuse of infrastructure. Congestion may also add economic value because it helps other financial resources and technologies meet them and determines lack points on the grid.
King did acknowledge that “reduced overcrowding means reduced customer costs.”
State Senator José Menendez (D-San Antonio ) questioned participants to get an idea of how much energy was being lost as a result of network congestion.
King responded that in West Texas, he has witnessed “more generation than can be delivered because of congestion on the system,” but that deploying” a resource of a particular size]at a certain time” may result in “unlocking the gridlock, and that does reduce costs,” which had “flow immediately to prices.”
Menendez compared the probable to” building immediate power plants, where it’s taken years to build power plants” in the past.
Ratemaking
The Public Utility Commission’s ( PUC) ratemaking procedures were then the focus of the discussion. According to the PUC, the rates are set to give the value the option for a reasonable level of return on their investment in addition to the costs of providing electricity.
The PUC regulates the returns that, among other things, are permitted to make through consumer prices by utility companies like Oncor, Center Point, and AEP Texas.
Barksdale English, the PUC’s deputy executive director, expanded on this notion, stating that the PUC determines rates using” just and affordable” standards.
Mr. English,” just and reasonable” is the foundation on which PUC decides utility ratemaking cases, according to Committee Chairman Charles Schwertner (R-Georgetown ). How does the PUC come to a decision regarding what is” just and fair”?
English responded that the utility’s application is eventually a” personal test,” but that there is a complete “litigation process” through which it can defend its application.
The PUC also determines a electricity company’s investment return on its capital. According to English, a business should possess a “reasonable opportunity to earn a reasonable gain on its capital investments,” despite there being no legal requirement for what the “rate of return” may be.
In terms of the PUC, Schwertner reaffirmed that “y’all have a lot of energy regarding rate environment and the rate of return, as well as what is” just and sensible.”
State Senator Donna Campbell (R-New Braunfels ) then leveled condemnation at English, arguing that “how you’ve used’reasonable’ today is quite abstract and smooth. I don’t believe you have ever given a certain response to what is just and fair.
English responded that while the PUC examines different energy costs in the state and outside the state, it is not “hard-coded” into the PUC’s rules that a given company may not receive more than a certain percentage.
He claimed that a power company’s typical gain is about 9.6 %.
Menendez also questioned English, claiming that the “risk” that utility companies face is relatively small, and that they should thus anticipate a lower return than the “higher return” he anticipates them to receive.
He remarked,” It needs an imperative determination.”
State Senator Lois Kolkhorst (R-Brenham ) inquired in English what the “incentive” was in keeping” just and reasonable” costs “in line.” She made reference to the 765-kV line project costs, which she has been a vocal critic of, and stated that there was” no way” the project would continue to be within the budget that had been set.
765-kV Ranges
Kolkhorst claimed that considering the 765-kV ranges,” Really what we’re talking about is bringing ] more renewables into the Triangle, because we don’t have that much foundation weight back out into West Texas.”
According to Kolkhorst,” I think it’s time we all stopped talking about falsehoods ] or misrepresenting what’s really happening here,” implying that the congestion-based justifications given for the massive transfer job weren’t always accurate. She previously referred to the transmission lines as a” large opportunity” to keep producing renewable energy in the state, which she opposes.
State Senator Kevin Sparks (R-Midland ) testified to panelists that the trouble with the West Texas oil and gas industry was not stemming from a transmission issue but rather from the fact that” Oncor has not sufficiently developed the regional infrastructure that we need to develop in more remote areas.”
These ranges are not going to resolve that part, he said. ” Take the measurement twice, cut once. I believe we should take additional measurements of something with such a significant long-term effects.
