Texas regulators next week will discuss a complaint from generation holding companies Calpine and NRG Energy over a $590mn project power transmission line that CenterPoint Energy proposes to build to import more electricity into the Houston metropolitan area.
The Electric Reliability Council of Texas (ERCOT) approved the 345kV transmission line project in April. CenterPoint-owned utility Houston Electric justifies the need for the line — named Houston Import project — by citing rapidly rising consumer and industrial demand for electricity in the Houston region, as well as diminishing local generation capacity capable of serving that load.
But Calpine and NRG are challenging the rationale for the project. ERCOT's analysis has overstated the extent of the reliability problems created by rising demand in Houston, the protestors said. And the proposed solution will not address the key issue of providing incentives for more local generation resources in Houston and ERCOT's coastal zone, they said.
The Public Utilities Commission of Texas in its meeting on 10 July will examine the complaint and establish a procedural schedule for examining it. The commission also will discuss whether to combine that docket with a separate complaint lodged by CenterPoint, which is unhappy with ERCOT's selection of rival utilities to build portions of the proposed transmission line. CenterPoint wants to be the sole owner of the entire project.
"For both of those complaints, 10 July is an important date to look to... We will know at that time where [the commission] is going to go," CenterPoint senior vice president of regulatory and government affairs Scott Doyle said this week during the company's investor day presentation.
Houston Electric this summer likely will have to import 20pc of its electricity demand requirements, executive vice president Tracy Bridge said. Electricity demand in the Houston Electric territory this year should be 23pc higher than in 2002 and should continue to grow strongly in the next decade, Bridge said. But local generation serving the Houston Electric load has declined by 27pc in the past decade.
Calpine and NRG argue that ERCOT's preferred solution for addressing the generation gap in the Houston area is biased toward transmission providers as a new transmission line will suppress incentives for new generation in that area.
Daily prescheduled differentials among ERCOT's North and Houston hubs are little changed this year compared with 2012-13, even as prices at both hubs have risen in absolute terms.
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