Market Information System Grid and Market Conditions

News Release

January 21, 2014

More than $3.6 billion in transmission improvements on tap to improve power grid by 2018

Austin, TX, Jan. 21, 2014 – A report recently released by the Electric Reliability Council of Texas (ERCOT) identifies several transmission improvements planned for the next five years to address growing needs on the electric grid that serves most of Texas.

According to the 2013 Report on Existing and Potential Electric Constraints and Needs, transmission providers in the ERCOT region expect to complete more than $3.6 billion in projects between 2014 and 2018. These include additions or upgrades to more than 3,300 miles of transmission lines and other equipment improvements to increase capacity and support reliability.

Improvements identified in the report focus on existing and potential constraints, where limited capacity of transmission infrastructure could create reliability concerns or increase power costs for consumers in the next five years.

Reducing current and future congestion concerns

In recent years, the most significant constraints in the ERCOT system resulted from high electric demand associated with oil and gas exploration and production in the Permian Basin. Transmission providers in the region have already implemented many improvements to address those concerns and will continue to do so in the coming years.

As similar growth has occurred in the Eagle Ford Shale region of South Texas, ERCOT’s Regional Planning Group, which includes transmission providers and other market participants, has approved about $331 million of improvements for completion between 2014 and 2017 to address constraints in that area.

A combination of growing electric needs and an aging generation fleet in the Houston area is resulting in more transmission congestion in that region. Previous studies have identified the need for a new transmission line to deliver power to the Houston area, and ERCOT plans to complete an analysis of three proposed solutions in early 2014.

Another priority is the Lower Rio Grande Valley, where there are only two high-voltage circuits to carry power into the growing region. Two projects scheduled for completion before the summer 2016 peak season will improve the capability to import power into the Valley and serve growing electric demand in the Brownsville area.

The recently completed Competitive Renewable Energy Zones (CREZ) projects have eliminated congestion that had limited power flows from West Texas to more populated areas in central and eastern Texas. ERCOT currently is studying whether additional enhancements will be needed to support increasing development of wind power expected in the Panhandle region.

As the transmission planning authority for the region, ERCOT works with transmission and distribution providers and other stakeholders to identify the need for new transmission facilities based on engineering analysis of operational results, load forecasting, generation interconnections, and transmission and system studies. Additionally, long-term studies released in even-numbered years look at long-term needs under a variety of scenarios. The next Long-Term System Assessment will be released in December 2014.

The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to more than 26 million Texas customers -- representing about 90 percent of the state’s electric load. As the independent system operator for the region, ERCOT schedules power on an electric grid that connects more than 46,500 miles of transmission lines and 710+ generation units. It also performs financial settlement for the competitive wholesale bulk-power market and administers retail switching for nearly 8 million premises in competitive choice areas.

ERCOT is a membership-based 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature. Its members include consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities, transmission and distribution providers and municipally owned electric utilities.