The Public Utility Commission of Texas today chose which of five wind-transmission-line scenarios (presented to them by the Electric Reliability Council of Texas) they will implement. For background, see my previous post on Texas wind energy.
The PUCT chose Scenario 2 by a vote of 2-1. This calls for integrating 18,456 MW of wind power into the ERCOT grid via 2,376 miles of new transmission lines; the preliminary cost estimate (including the costs of transmission substations, whether new or upgraded) is $4.93 billion. That works out to more than $2 million per mile. Moreover, many related costs are excluded from this estimate, including right-of-way fees and an ERCOT-estimated $580-820 million for collection costs. The estimate was also calculated using straight-line lengths for the transmission wires, so the estimate is on the low side.
Among the bad news for ratepayers is that these billions of dollars in transmission costs will be distributed among all ERCOT utilities, in proportion to their relative load. Thus, conventional generators will pay much more than wind generators, even though the new transmission lines will be built in order to accommodate new wind capacity. These costs will subsequently be passed on to all ERCOT ratepayers. In other words, the costs of the legislatively mandated wind-energy boom will be socialized across the state, while the developers rake in subsidies, enjoy accelerated depreciation on their equipment, and get fat tax breaks.
My forthcoming study on Texas wind-energy development will examine these and other issues in detail. Stay tuned.
(On a more positive note, the PUCT agreed that Texas should not back down at all from nuclear power.)