Texas on the Potomac regularly publishes guest opinions from across the political spectrum. Today, we offer a commentary by Diana Liebmann that was written for the San Antonio Express-News.
In parts of West Texas, wind turbines extend across rocky mesas as far as the eye can see, turning otherwise unproductive land into a source of clean, renewable energy. Our state has world-class wind resources, and wind developers want to expand generation into the area of the state with the best wind resource. There has been just one problem: The Panhandle lacks transmission lines to carry the power generated by wind to consumers around Texas.
But that’s changing. On Friday, the Public Utility Commission of Texas (PUC) approved a plan to bring needed transmission lines into the windy Panhandle. In 2005, the Texas Legislature established the Competitive Renewable Energy Zone (CREZ) process to build transmission lines to areas with exceptional wind resources like West Texas and the Panhandle. Local residents want to capture their wind generation potential and reap the economic benefits of job creation, new income for landowners and tax revenues for school districts and cities.
In reaching its decision, The PUC required wind developers that wanted to use the new lines to demonstrate a financial commitment to develop wind projects by putting collateral at risk. To meet the PUC’s financial threshold, some wind developers anted up more than their fair share, and some wind developers made no commitment at all.
In the coming years, as the transmission lines are brought on-line and become oversubscribed with new wind projects from a myriad of developers — the companies that made the financial commitment necessary to achieve approval for the development of these transmission lines should be given priority to remain on-line and generate electricity.
This “dispatch priority” is needed so that wind developers who supported the transmission lines with real dollars when credit is tight, power prices are low and the economy is in a recession, are not bumped off-line by developers who sat on the sidelines with their hands (and money) in their pockets.
This situation must be remembered in the coming years when the new transmission lines become oversubscribed — a situation that has occurred in West Texas, and was a driver behind the CREZ legislation.
When too much electricity is being generated, reliability of the system will require that wind generation on those lines be choked back. When that happens, priority should be given to the wind developers who posted a financial commitment. These developers should be entitled to utilize the transmission that was built based on their financial commitments. Those that posted no commitment, and took no risk, should be first to be backed down.
The state has managed this process in a way that protects the interests of taxpayers and consumers; using a resource in a manner that brings real benefits without undue financial risks. All Texans will benefit from increased transmission to allow for the development of no-cost fuel generation that wastes no water nor harms the quality of the air we breathe.
Now that the Panhandle transmission lines have been approved, and a completion date anticipated to be in 2013-2014, Texas needs to reinforce its sound policy and ensure that dispatch priority is given to companies that supported the transmission build-out, invested resources, and shouldered the risk.
Diana Liebmann is a partner in the Energy and Power Practice Group of Haynes and Boone, LLP’s San Antonio office. Her clients include wind power generating companies.