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NRG, Calpine sue in fight against Texas power line

  • Märkte: Coal, Electricity, Natural gas
  • 03.03.15

Two of Texas' largest power producers have filed an appeal to force further review of a proposed $590mn power line designed to move electricity from north Texas into power-hungry Houston.

NRG Energy and Calpine, two power producers with generation in Houston, yesterday appealed in state district court in Travis County a December 2014 order from the Texas Public Utility Commission supporting the Texas grid agency's process that determined the 130-mile (209km) line, called the Houston Import Project, was needed.

CenterPoint Energy and two other utilities want to build the 345kV line by the summer of 2018.

The challenge to the line represents the latest chapter in an unresolved battle over whether the state's energy-only market structure can encourage new generation needed to maintain reserves in the Electric Reliability Council of Texas (ERCOT) at a level that avoids the threat of rolling outages. Since extreme weather in 2011 strained the state's power resources, generators and regulators have disagreed on how to maintain reserve levels.

Mild weather since 2013 and revisions to ERCOT's load forecasts that lowered expected growth in peak demand quelled discussion of an ERCOT capacity market, but may mask risks to power supply in the state where overall power use grew by 2.5pc last year, generators said.

Houston represents more than 25pc of the load in the ERCOT and rising power demand in the state's largest city has strained existing transmission lines as power plant retirements over the past decade have exceeded new generation by 2,000MW.

NRG and Calpine want the Texas grid agency to re-evaluate the need for the line using updated load forecasts and "reasonable assumptions and modeling techniques" to see if the project is still justified.

"While we appreciate the commission's effort throughout this process, the procedural rulings by the administrative law judge excluding evidence and testimony prevented the commissioners from making the most complete and accurate assessment of the facts and circumstances," Calpine said.

Calpine and NRG said the line is not needed and its cost is "dramatically more than any potential congestion cost savings."

"It is critical that the recommendations and decisions made on [the Houston Import Project] are based on accurate data and sound analysis to determine if this rate-based project is truly needed," NRG Gulf Coast president John Ragan said.

CenterPoint's Leticia Lowe said the company expects to make its planned certificate of need filing with the state utilities commission in April, as scheduled.

A need for the line had been identified several years ago. Even under lower-growth estimates, the line will be needed by 2019, a year later than the proposed completion date, CenterPoint said.

Houston peak prescheduled prices averaged 3pc above the north zone in 2013, but dropped to a 1pc premium in 2014. Houston peak assessments average a 6pc premium to the North hub for calendar 2016. That premium widens to 9pc premium in 2019.

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