ENB Pub Note: This is an excellent article from Joanna Friebele, and Michael and Stu will be covering this on the next edition of the Energy News Beat Standup. Stu talked with Joanna last week, and was stunned by the costs and impact of this project. We recommend subscribing to Joanna’s Substack.
Texas ERCOT system has over 181 GW of equipment on the grid used to generate electricity. The peak demand this year was an estimated 82 GW, and it seems like the over-purchasing of wind and solar has not helped keep costs down on the grid to consumers.
With the largest transmission build out in Texas history just months away from final approvals, it is prudent that every Texan pay attention. It is the residential customer, in the cities and rural areas, as well small business customers who will be hit the hardest. This huge transmission project will place an extra $200 or more on residents annual electric bills.
Electric customers are already paying $650 Million dollars per year for maintenance for the last large build out of the CREZ lines which initially cost $7 Billion, according to TPPF. The maintenance on this even larger project will be about $3 Billion per year. This cost will escalate and never go away. It is never just the initial cost of construction one has to consider, but also the maintenance and upkeep.
The initial cost of constructing the western three lines is about $13.77 Billion dollars and the overall cost of the total STEP plan is estimated to be $33 Billion dollars. Texas Public Policy Foundation estimates that final cost to be around $80 Billion. The repayment plan will be over 20-30 years or more and the maintenance forever.
With 1/3 of ERCOT customers having difficulty paying their monthly bills now, this will hurt the most vulnerable among us. The question is – can the consumers afford this and who does it best serve? Even the Sierra Club believes the current methodology to pay for transmission costs no longer serves the market well, and places a particular burden on residential and small commercial customers.
The CREZ lines bringing wind energy from West Texas to the metropolitan areas did not help during Winter Storm Uri. Was the cost of $7 Billion to build those lines worth the lost lives of several hundred Texans? Wind and solar reliability, distribution and intermittency issues require a whole new grid system of their own. When a grid is built for one type of generation and you try to insert another you end up with major complications as we continually witness.
Since then, the word “Reliability” has been overused and inserted into this new plan just to give it credence and acceptability. The import lines of the Permian Basin Reliability Plan running from Central Texas to West Texas will not give the residents of central Texas any reliability or much help during an emergency. They will move reliable power to aid a Biden era mandate of electrify everything. This includes oil and gas operations and now data centers out west. With any luck the bill SB-6 will help somewhat with the data center issue and they will have their own generation for the hyper scalers at least. I can see a scenario where nuclear will fast prevail in this market. If they need it they will get it.
This is not the first-time grand plans for 765 kV transmission lines for national grids have rocked our nation. The grand Obama plan in 2008 had a similar look, but somewhat smaller for the Texas grid almost two decades ago. Wind and solar were the main drivers then and now they still cannot operate efficiently without more transmission, more battery back-up and gas peaker plants to keep the whole system humming along and the lights on, all very expensive.
The advent and panic of the data center onslaught moved this plan closer to fruition and representatives and senators fully embraced the idea with their bill HB-5066 in 2023. Now they are in a tizzy over the enormity of the project and lack of legislative oversight, as seen in their letter to the PUC (58562-3). These five legislators are asking the Commission to carefully consider the clear impacts the 765 kV lines will have on the statutory factors. Or is the letter just a ploy to satisfy the uprising and outrage of the landowners in rural Texas who are impacted by this project. Got to keep the voters happy! I am not sure I am not leaning towards the latter!
I am continually asking people to stand up and speak up. Even those city folks don’t need another $200 per year on their bills and have no idea this is happening to them. Tell your city friends. Landowners in Texas will be even more impacted with lost land values and viewsheds and the disruption of construction for a year or more.
Since this bill was ratified in 2023, after being orchestrated for years, things have changed. The tides have changed. Even Bill Gates now says we will not all die from climate change. I would think it is because he needs natural gas to fire up all his data-centers and doesn’t want to be called a hypocrite. Despite all the propaganda about wind, solar and batteries running data centers, reality hits the wall on that one – they cannot.
Technology has changed, legislation has changed and with it, so will the grid. That is already evidenced by the number of gas plants being planned in the Permian. In January this year there were 12 projects planned with 5,255.4 MW of nameplate capacity, whereas the year before there were only 2 projects. New projects are being announced on a regular basis, and as many people have said – The Permian is the energy capital of the world right now – they can create their own generation. They just needed the incentive of the TEF (Texas Energy Find) program to help with financing and project stability for long term planning. Next will come nuclear power, quicker than most anticipate. Gates has already built nuclear in China, just need to bring that technology back here quickly and many companies are vying for that position of being first.
If this transmission project proceeds, it will be left as a monument to irresponsible and reckless planning to satisfy the few with their crony capitalism and saddle the rest of us with debt for generations to come. It will be used I am sure, but can we afford it. Careful though now needs to prevail.
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