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PUC authorizes ERCOT to study adding Lubbock to power grid

Updated: Dec. 23, 2015 at 3:38 PM CST
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LUBBOCK, TX (KCBD) - The Public Utility Commission today authorized the Electric Reliability Council of Texas known as ERCOT, the power grid that that serves 90% of Texas, to explore a relationship with the city of Lubbock.

In a brief discussion at its meeting in Austin today PUC commissioners said they had been asked by the city of Lubbock to allow ERCOT to move forward with a study. The commissioners approved that move without objection.

That study, KCBD has learned from Mayor Glen Robertson, will examine the feasibility of integrating Lubbock into the ERCOT power grid.

Robertson has also confirmed to KCBD that he and other LP&L officials did speak with PUC officials asking to exploring the possibility of joining the ERCOT system.

The decision by the PUC Thursday morning precedes a scheduled meeting this afternoon of LP&L's Electric Utility Board. The agenda for that meeting includes the following item: "Discuss and deliberate proposals and strategies related to plans, studies, and analysis for system improvements, generation additions, or sales."

Today's meeting will be the first time the EUB has discussed in open session its plans for future power generation. LP&L's contract with Xcel Electric expires in 2019.

ERCOT, based out of Austin, is a non-profit corporation. ERCOT is not a power company. It is the entity that schedules power on an electric grid connecting more than 43,000 miles of transmission lines.

Those transmission lines join over 550 power generators and consumers of electricity, like LP&L, across the state.

Today Lubbock is not a part of that electric grid, although several counties surrounding Lubbock are.

Instead, Lubbock is a member of the Southwest Power Pool. And this limits it's ability to purchase power to only two companies, Xcel and Golden Spread, but with today's PUC decision that could soon change.

Joining ERCOT would give LP&L, as a wholesale power purchaser, more options. More options for LP&L, Robertson believes, will result in lower prices for the consumer.

In August, LP&L withdrew its RFP for future power generation with goals to "achieve a simplified regulatory environment" and "enhance flexibility and diversification of our energy supply."

And while past boards have indicated a willingness to incur debt to build power generation for Lubbock this board stated its intention to "limit the issuance of additional debt."

Those statements in August signal the inclination to reach a negotiated solution with other power generators.

The only way to achieve that, we're told, is to join ERCOT, the power grid that services 90% of the state's electricity.

Even if the city of Lubbock joins ERCOT, LP&L, as a municipally owned utility, would retain the same monopoly it has today over most of the city of Lubbock, according to LP&L spokesman Matthew Rose. Rose likened the potential relationship to that of ERCOT member Austin Energy, the utility owned by the city of Austin.

Mayor Glen Robertson tells KCBD that while it will be necessary to build transmission lines to join the ERCOT system, that infrastructure investment can be recouped in the future through reimbursement by ERCOT.

According to Mayor Robertson the target date for joining ERCOT is June 1, 2019.

KCBD will bring you more at noon in an exclusive interview with Mayor Glen Robertson and Lubbock Power & Light spokesman Matthew Rose.

Xcel Energy responded to the announcement that Lubbock is seeking to connect with the ERCOT grid:

Xcel Energy is concerned about Lubbock's interest in securing a future power supply by disconnecting from the Xcel Energy transmission network and connecting to the Electric Reliability Council of Texas (ERCOT) system. The company believes such a move would have a detrimental effect on the economy by increasing electricity costs, both for electric customers in ERCOT as well for regional cities and rural areas that are served by Xcel Energy's transmission facilities within the Southwest Power Pool.

Xcel Energy has made significant investments in the high-voltage transmission network that serves area customers, including Lubbock. If Lubbock leaves the system, Lubbock's portion of the annual costs of these investments will be added to the costs Xcel Energy customers in Texas and New Mexico already pay. And connecting Lubbock to ERCOT will require a massive infrastructure investment that duplicates facilities already in place to serve the city's needs, creating additional costs for ERCOT customers as well. Furthermore, Xcel Energy has a long-term power supply agreement with Lubbock for a portion of Lubbock's power needs through 2044, and a move to ERCOT could impact this agreement.

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