Texas transmission project could set Southeastern wind sales in motion

Source: Nathanial Gronewold • E&E • Posted: Thursday, December 22, 2011

HOUSTON — Texas should be selling large quantities of wind energy to other states by 2016 now that its major transmission project has just cleared a key regulatory process, according to a top renewable power developer.

San Francisco-based Pattern Energy Group reported that it has cleared two key hurdles that stood in the way of its Southern Cross transmission project. Southern Cross is an ambitious plan to tie up to 3,000 megawatts of generating capacity in Texas’ grid to states in the Southeast.

New emissions-free wind projects are expected to supply the additional power to be sold along the transmission line.

“Southern Cross is an innovative transmission project that will create new jobs, while generating investment and economic development in Texas, Louisiana and Mississippi,” said Pattern CEO Mike Garland in a release. “The project, which will provide the southeast United States with the opportunity to access affordable renewable energy, will also provide significant reliability benefits to both regions by connecting two robust systems and allowing sharing of resources.”

Pattern owns the Gulf Wind project, a 280 MW system located on Gulf of Mexico coastline of Texas, where much of the state’s new wind projects are being concentrated. A few months ago, the Electric Reliability Council of Texas (ERCOT) reported that the state’s coastal wind projects were particularly helpful in keeping the lights and air conditioners on during the particularly hot and dry summer and record power demand.

Texas currently sells wind power out of state primarily in the form of renewable energy certificates (RECs), credits that signify the environmental attributes of alternative power that companies, individuals and governments can purchase. But Pattern sees Southern Cross as opening the market for direct supplies of wind power to Southern states where renewable energy development is lagging behind the rest of the nation.

The company also expects that the massive transmission project will improve the economics of wind project development in Texas.

Construction eyed for 2014

The company says that two special orders recently issued by the Federal Energy Regulatory Commission (FERC) clear the path forward for the project. Pattern plans to build a 400-mile high-voltage direct-current line beginning from northeast Texas. Southern Cross would eventually deliver power from the ERCOT grid through northern Louisiana and Mississippi, connecting to substations in Mississippi and Alabama. Pattern estimates that the entire cost of the project will exceed $1 billion.

“This was the primary regulatory approval we needed,” Pattern senior developer Chris Shugart said in an email. “The main development hurdle remaining is marketing of the transmission capacity to interested shippers which we are under way with.”

Pattern officials say FERC approval authorizes it to immediately begin talks with current and future wind energy suppliers interested in using the line to sell electricity out of state.

Once completed by about 2016, Southern Cross “will allow Texas to expand its traditional role as an energy supplier, adding wind energy to its portfolio of major exports,” the company boasts.

Shugart estimated that construction would commence in 2014 and the new line should be online by 2016. He cautioned that his company still has to prove compliance with other state and federal laws.