HOUSTON, June 12 (Reuters) – Texas regulators are leaning toward a plan to accelerate power line construction to accommodate about 18,000 megawatts of wind generation by 2012, less than the 24,000 MW wind supporters are seeking, commissioners said following a two-day hearing in Austin.
Texas Public Utility Commission Chairman Barry Smitherman said the "hearing has helped me to understand some of the risks involved," after the hearing concluded on Thursday.
Smitherman said before the hearing he was considering a plan to allow more than 24,000 MW of wind generation. Following the hearing, he said he is more inclined to approve the less ambitious plan of about 18,000 MW "or less."
The commission is not to rule in the case until July.
Regulators have been working to decide how much new transmission should be built to take advantage of the state's abundant wind resource.
Major power lines are needed to transfer wind generation from sparsely populated West Texas to the state's biggest cities where electric demand is highest.
With 5,500 MW of current wind capacity, Texas leads the nation in the number of installed wind turbines, according to the American Wind Energy Association.
ERCOT said wind capacity could exceed 9,000 MW by the end of the year, long before new power lines can be built. Texas wind development is concentrated in West Texas areas where the wind blows strongest at night and is weakest during the summer when Texas power demand soars to meet air conditioning demand.
Rapid development of wind in Texas has created congestion on the existing power grid, leading to spot-market volatility and turmoil for small power retailers.
The commission is weighing the benefits and costs of four transmission-route scenarios proposed by the Texas electric grid operator to accommodate from about 12,000 MW to as much as 25,000 MW over the next four years.
Estimates from the Electric Reliability Council of Texas (ERCOT) to transfer wind power from $3.4 billion to more than $7.4 billion, depending on the number of lines built.
Commissioner Paul Hudson, who plans to leave the PUC in August, said the 24,000-MW scenario would be "best left to a future commission" with more information.
Hudson said ERCOT's scenario 2, the 18,000-MW plan, "is my focus."
Commissioner Julie Parsley did not indicate which scenario she favored.
During the hearing, wind-farm and transmission developers urged the panel to adopt scenario 3 or 4, both plans that would allow 24,000 MW of new generation.
Attorneys representing consumers and cities asked the commission to consider the high costs of building many new lines and considerable uncertainty over additional costs to integrate high levels of wind generation.
"These transmission lines will stir the pot of how money is made in ERCOT," said Mike Sloan head of Virtus Energy, an Austin consulting firm. "A lot of people want to keep wind out of the ERCOT market."
In questioning, Smitherman expressed concern over a grid study that showed that natural gas, coal and even nuclear plants could be forced to reduce output at certain times of the year when wind generation is strongest, possibly creating operating problems for the fossil fuel-fired plants and discouraging investment in other new power plants needed to meet Texas growing electric demand. (Reporting by Eileen O'Grady; Editing by Marguerita Choy)
