Added generating capacity should keep state lighted, cool while others face rolling blackouts

By Dan Piller
Fort Worth Star-Telegram Staff Writer
Sun, 13 May 2001

On Monday, TXU executives and state regulators will gather at the utility's Mountain Creek station to flip the switch on a new 87-mile, 345-kilovolt transmission line running from Limestone County, east of Waco, to the Fort Worth-Dallas power grid near the Ellis County line.

This Limestone Watermill line is the electrical equivalent of a new multi-lane freeway or airport runway. Limestone Watermill will double the amount of electricity that can be pumped into the Metroplex, loosening an increasingly worrisome transmission bottleneck.

The new line is just one reason that Texans are unlikely to suffer through the rolling blackouts being experienced in California and now being predicted for New York and other parts of the country this summer.

Thanks to a steady stream of new power plants and increased transmission facilities, Texas expects to have a surplus of electricity this summer. The state's power plants are expected to be able to generate up to 70,000 megawatts during its blast-furnace summer. And the peak load - based on the state's all-time record day last Aug. 31 - is expected to be 57,606 megawatts.

In California, meanwhile, summer daily peak loads during air-conditioning season are predicted to reach 61,125 megawatts. But the state will be able to muster no more than 56,169 megawatts.

From his perch near Boston, Cambridge Energy Research Associates president Daniel Yergin publicly warns that New York faces brownouts this summer.

The contrast between Texas and other parts of the country revives memories of the late 1970s and early 1980s, when energy-abundant Texas prospered under record-high oil prices while the rest of the U.S. lowered thermostats and donned sweaters.

That energy crisis was centered around shortages of crude oil and was symbolized by the stereotyped characters on the TV program, Dallas. Texans responded to the resentment of the rest of the U.S. with bumper stickers and songs saying "Save Energy: Let a Yankee Freeze In The Dark."

Now, two decades later, another energy crisis has been proclaimed by a Texan, President Bush.

But this one will be different from its predecessor. Instead of gasoline shortages causing lines at service stations, some homes and businesses will periodically go dark because of a shortage of electricity.

Not in Texas, experts say.

The coming symbol of Texas' energy independence is something called ERCOT, the Electric Reliability Council of Texas. ERCOT is a non-profit consortium made up of various energy generators, transmitters and utilities that serve Texas. ERCOT has been expanded beyond a simple switching system to a self-contained electric power grid, the only one of its kind serving a single state in the U.S.

Both California and New York belong to large regional power grids, which share power between states.

ERCOT dates from the 1970s, when Texas' original grid system, dating from the 1930s, was reorganized. At one time, ten different grid systems served the United States.

ERCOT is set up so that power generated in Texas can't flow out of the state. The only lines headed out lead to Mexico.

From a command center in Taylor, about 35 miles north of Austin, ERCOT routes electricity from various generators around the state to users, in a manner similar to air traffic controllers at airports.

As the summer progresses and Texans study the headlines in their newspapers and listen to the grim intonations from media centers in New York and California, they will become grateful that Texas has ERCOT.

Tom Noel, a soft-spoken, pleasant West Point graduate who is the chief executive officer of ERCOT, notes that Texas has another advantage over California.

In Texas, electric generating plants can be licensed within three years. California, with more requirements, called for a permit period of up to 10 years during most of the 1990s.

"Texas now has 22 new electrical generating plants under construction, and 30 are planned for the next 3-5 years. California hasn't built a single new generator in the last 10 years. The difference is that California's political culture decided that it didn't want any more power generators," Noel says.

During the 2000 presidential campaign, Texas' easily lubricated industrial and utility permitting system drew scorn from environmental interests opposed to Bush. But since California began experiencing mid-day darkness this year, that enviromentally sensitive state has jumped to the pro-building side, expediting permitting processes so that construction could begin on 10 generating plants. Alas, those facilities won't come online until at least 2003.

The Limestone Watermill transmission line illustrates Texans' willingness to build. California has added virtually nothing to its transmission system in the past decade. Limestone Watermill made it through the permitting process in about two years and will open a year ahead of its original completion date, which was the summer of 2002.

The new transmission line comes none too soon, Noel says. With Limestone Watermill, "Texas will be in good shape for electricity this summer."

While satisfying electrical demand requires ample generating and transmission capacity, dealing with the political implications is trickier.

Electric deregulation is poised to begin in Texas on Jan. 1, after a six-month trial limited to 5 percent of the state's residential customers. Texas, unlike California, will allow utility bills to rise with increases in fuel prices. While that may be painful to billpayers, it will prevent the wholesale shortages and utility bankruptcies that have occurred in California.

Yergin says: "A deregulation scheme based on price ceilings is doomed."

The Texan in the White House and his fellow free-market supporters have responded to the cries for wholesale electricity price controls from New York and California by quoting the lessons of Econ 101: that price ceilings only make shortages worse.

The free-market argument holds that more investment is needed, not only in generators and transmission lines, but also in energy exploration and drilling. Since oil and gas prices began emerging from a 20-year low two years ago, the U.S. drilling rig count has risen from a low of 499 in April 1999, to more than 1,200 last week.

Yergin notes that there was a sharp falloff in drilling in the late 1990s when oil and gas prices were depressed. While the energy industry catches up, Yergin says, we can expect continued tight supplies and high prices for natural gas in the foreseeable future.

Bush has outraged environmentalists by calling for more drilling almost everywhere, including places such as offshore in the Atlantic and Pacific Oceans, the Arctic Wildlife Refuge in Alaska and federal lands in the western United States. Bush also called for a new look at nuclear power.

Environmentalists such as Melinda Pierce, Washington representative of the Sierra Club, accuse Bush of using the California crisis to panic Congress and the public into accepting massive drilling projects.

"Trying to drill our way out of energy shortages creates more global warming, more air pollution and devastates our wetlands," she says.

But Yergin warns that high natural gas prices over the long-term will constitute a drag on the U.S. economy similar to the sluggishness caused by high oil prices 20 years ago.

Dan Piller (817)390-7719
danpil@star-telegram.com