Tuesday, December 18, 2018

ERCOT Stakeholders OK $246.7M in Freeport Reliability Projects

By Tom Kleckner

ERCOT stakeholders unanimously endorsed almost $250 million in transmission projects during last week’s Technical Advisory Committee meeting, sending the package to the Board of Directors for its Dec. 12 meeting.

The two projects will address “significant” industrial growth in the Freeport area, a seaport south of Houston on the Gulf of Mexico. Newly committed industrial loads are expected to push the area past 2.2 GW by 2022, surpassing the heavily populated Rio Grande Valley.

The market “thinks about big meaty load pockets like the [Dallas-Fort Worth] area, Houston, San Antonio and Austin, but we haven’t really thought about Freeport,” said Jeff Billo, ERCOT’s senior manager of transmission planning.

ERCOT staff project a 92% increase in the area’s load by 2019, from 1,028 MW to 1,979 MW. An additional 300 MW is expected by the end of 2022.

ercot transmission projects


CenterPoint Energy, which services the area, submitted the “Freeport Master Plan Project” to ERCOT’s Regional Planning Group, proposing a two-phase approach to solve reliability criteria violations caused by the increased load. Staff’s independent review agreed with the projects’ needs, finding multiple reliability criteria violations in 2020 and 2022 cases.

The $32.3 million first phase, or “bridge-the-gap upgrades,” focuses on near-term reliability needs. It consists of a 345-kV loop and a series of reactors, autotransformers and capacitor banks at a key substation.

The $214.4 million second phase comprises a new 48-mile, 345-kV double-circuit line and circuit upgrades to another 345-kV line. It was one of five options considered by staff, four of which involved a new 345-kV right of way, and would meet the “long-term reliability criteria needs in the most cost-effective manner.”

ercot transmission projects


The other four options had cost estimates of between $223.2 million and $281.8 million.

“We realize there is a long-term need to put in bigger infrastructure projects, but to get to that point, interim upgrades need to be done,” Billo said. “More upgrades will need to be done in order to meet the long-term needs of the system.”

Staff’s recommendation met little resistance from members, who only needed to be assured the load increase will be included in ERCOT’s next Capacity, Demand and Reserves (CDR) report. That report, to be released Dec. 18, includes a snapshot of planned resource additions during the next five years, current information about existing resources and the annually updated peak demand forecast for the next 10 years.

Billo also updated members on the South Plains Project, a proposed $247.5 million, 345-kV line in the Texas Panhandle.

ercot transmission projects

Billo | ERCOT

Billo said Sharyland Utilities has proposed the transmission line as an economic project but that ERCOT’s analysis has yet been able to economically justify the project. He said about $210 million of the South Plains Project overlaps with work that would be done to integrate Lubbock Power & Light, which wants to shift 470 MW of load from SPP into ERCOT.

The Public Utility Commission of Texas has scheduled a hearing on LP&L’s integration Jan. 17-18 (Docket 47576). Until then, staff has paused further analysis.

“We will wait to see what happens in that hearing and the subsequent decision that comes out of the PUC,” Billo said. “That may supersede the need to analyze part of [the South Plains] project. If the commission says we’re going to go ahead with Lubbock and those lines get approved, we don’t have to do an economic justification for [the South Plains] lines anymore.”

Billo said staff would update its assumptions and Sharyland’s capital cost updates, and add plant retirements and other fresh data in a potential reassessment of the project that could be ready by mid-2018.

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