Appearing before the Public Utility Commission are GP&L Director Ray Schwertner and Mayor Pro Tem Laura Cox. Councilman Larry Jeffus sits top right. Also attending the hearing were City Attorney Brad Neighbor and Assistant City Attorney Mark Dempsey.

 

Texas muni carving out its own portion of CREZ build-out following court decision

Lynn Doan
SNL Power Daily
April 1, 2010
 
A Texas town expects to hammer out a deal within days that will entitle it to a part of the state's $5 billion transmission grid build-out.
 
Taking advantage of a recent court decision, the city of Garland, Texas, told the Public Utility Commission of Texas on April 1 that it is "trading drafts of an agreement" with South Texas Electric Cooperative Inc. to jointly develop two transmission projects as part of the state's competitive renewable energy zone initiative, known as CREZ.
 
In January, a Texas District Court judge reversed and remanded portions of a PUCT order selecting transmission providers to build the CREZ lines, which will connect the state's wind-rich regions to major load centers. Judge Stephen Yelenosky determined in his order that the commission essentially excluded municipal electric utilities from participating in the bidding process.
 
The city of Garland, the municipality that appealed the decision in court, had unsuccessfully sought to build a portion of the project.
 
As part of the agreement being hammered out, South Texas Electric Cooperative and the city of Garland's not-for-profit electric utility, Garland Power & Light, would be joint owners of two CREZ projects. South Texas Electric Cooperative would manage and construct the lines, and the city of Garland would buy the undivided interest from the cooperative for the facilities once the lines are energized, the city's utility director, Ray Schwertner, said during the PUCT meeting.
 
"The process up to the lines being energized, all of the [certificates of convenience and need], the landowners, the construction and meeting schedules and so on, STEC will be taking care of," Schwertner said.
 
Schwertner said he has held "lengthy discussions" with the board of directors, management and staff of South Texas Electric Cooperative. The city and the cooperative are ready to "move forward and put together a project development agreement," he said.
 
The agreement is subject to approval by the Garland City Council and the PUCT.
 
Schwertner confirmed that the PUCT would maintain jurisdiction over the reliability of the lines, despite them being owned by the city.
 
South Texas Electric Cooperative originally had been assigned to build $105 million of CREZ lines, totaling roughly 75 miles.
 

 
Garland applied to participate in the construction of transmission lines from the West Texas wind farms to more populated areas in the eastern half of the state. All power consumers in the state will be charged for use of the transmission lines. To offset the cost to GP&L customers, the Garland-owned utility sought to operate part of the lines. However, the Public Utility Commission passed over Garland's request. The reasons given did not seem valid and Garland sued to reverse the PUC decision. Travis County District Court Judge Stephen Yelenosky agreed and directed the PUC to reconsider.
 
Several weeks ago the PUC did offer Garland the opportunity to join with either South Texas Electric Cooperative or Lower Colorado River Authority to obtain rights to operate a portion of the CREZ line from West Texas. On Apr 1, GP&L Director Ray Schwertner returned to Austin to give an update on his progress. He reported that GP&L had reached a basic agreement with STEC to build and operate part of the line. STEC would probably build the line and then Garland would operate a portion.
 
The effort has been uphill the whole way and much of the credit for success goes to Mr Schwertner but others have played significant roles. Outside Garland, our state senators, John Carona and Bob Duell, and their staffs, worked tirelessly to assure the city received a fair shot. I learned a long time ago that no deal is complete until the papers are all signed—and they are not—but there is light ahead.
 
The meeting can be viewed at the PUC website (Apr 1, Part 1, just past the 2:06 mark) or the relevant part can be downloaded here. Both options require the RealPlayer SP video application, a free download at that link.