Bulk Power Transmission Study

Abstract

"Texans now have a choice. We can become more efficient and maintain our standard of living, or we can continue business as usual and watch our standard of living erode from competition from other regions. In the past, except for improving reliability, there was no need for a strong transmission system. When Texas generation was primarily gas fueled, the extensive natural gas pipeline network moved energy easily within the state. In recent years two things have changed: 1. Electric utilities have made extensive investment in lignite, coal, and nuclear plants and, 2. Improvements in gas turbine technology and the removal of institutional barriers has encouraged cogeneration at many of our energy intensive process industries. This energy diversity means that there are now significant differences in energy costs between units. The variable costs of generation of power can vary between units by a ratio of 2 or 3 to 1 and this difference will be accentuated when energy costs rise (and they will; it’s a question of when, not if). The potential for costs savings by optional dispatching of the entire interconnected system are greater than ever before as demonstrated by the PUC's Bulk Power Transmission Study. And the potential can be enhanced with added transmission system investment.

Cogeneration and small power production has proven to be the most cost effective way for Texas to add additional generating capacity needed to supply an economy that is starting to rebound and to replace old, obsolete power plants. The freedom to locate these facilities at the fuel source or at the site of large thermal demand makes real economic and environmental sense. The use of renewable or waste fuels allows something that would otherwise be wasted to contribute to our economy. Fossil fuels that are displaced can be redirected to another use or consumed for future benefit. By integrating a gas turbine generator with a. process plant, the natural gas required for producing electricity can be reduced by 40% below that required for a combined cycle. The heat rejected from a gas turbine, combined cycle, or steam plant can be redirected to a process use that contributes to our economy by producing something of value to world markets. By contrast a conventional power plant is paid for by the rate payers and consumes Texas natural resources and therefore is a burden rather than an enhancement to our economy. The optimal location of facilities are possible only if there is an adequate transmission system.

Utility, consumer and industry must cooperate to improve our transmission system for the benefit of all Texas. The Texas Public Utilities Commission has taken the lead in promoting efficiency by requiring transmission wheeling between qualifying facilities and electric utilities. Several cogeneration facilities have been constructed as a result. In order to encourage small power production, the rule needs to be expanded to include projects interconnected with distribution systems. Most renewable resource projects are relatively small and cannot afford the cost of a high voltage interconnect, and yet their characteristics match a baseload need. The ability to wheel power to a utility that needs base load power from a distribution level interconnection is essential to development of these smaller projects."