This is a key step in the state's Competitive Renewable Energy Zone (CREZ) process that began three years ago. State regulators, led by the Public Utilities Commission (PUC), identified the state's best wind resources, mostly in north and west Texas, that were lacking adequate transmission. The PUC confirmed investor interest in building a huge volume of wind projects and then created a process to get transmission lines built to those areas.
"That process potentially was a hold-up on the system as a whole and for the build out of transmission, so we're elated that the commission entered an order," says Paul Sadler from the Texas Wind Energy Coalition. "At this stage it's all hands on deck to make sure that we don't see any unexpected delays," he says. "The decision was good, the timing was good, and we're moving forward." The transmission capacity expansion is expected complete by 2012 through 2013, which Sadler says is fast relative to how long stringing new wires can take in the US.
Deciding who the transmission service providers would be was partly a competitive process, but also partly swayed by which companies already had assets in certain areas. "The way the market has developed, there wasn't a whole lot of argument over which companies ought to do what transmission," says Sadler. That is not to say there was no contention. But Sadler says the commission strongly encouraged all parties to settle and negotiate as quickly as possible to avoid a long drawn out process. "I think in the future we may well see a change in some of the process, but from our perspective we didn't want to go through a four year process of studying the process just to get a decision."
The near $5 billion dollar cost will be paid for in higher electricity bills for all 24 million consumers in the state. Current estimates put the price tag at about $4 a month for residential customers, but wind experts say the price is offset by savings from access to low-priced, carbon-free wind power, plus the stability gained from avoiding fuel price spikes. Sadler points out that another transmission build-out underway for traditional generators in Texas will cost the same ratepayers about $3.5 billion in initial costs. "People say it's too much money for wind but it's not when you consider the traditional generators are spending about the same money for a system that already exists," says Sadler.
The selected transmission companies will go through a final process to ensure financial and construction capability before they start work.