CenterPoint seeks approval for Houston power line

OREANDA-NEWS. April 27, 2015. CenterPoint Energy has applied for authorization from Texas regulators to build its portion of the controversial Houston Import Project, a 130-mile (209km) transmission line designed to move electricity from north Texas into power-hungry Houston by mid-2018.

CenterPoint will build the southern portion of the 345kV line, known as the Brazos Valley Connection, running 60 to 78 miles from Harris to Grimes County, depending on the final route determined by the Texas Public Utility Commission (PUC).

CenterPoint said the cost of its portion of the line will be \\$276mn-\\$383mn. The entire project, estimated to cost \\$590mn, could add about 25?/MWh for CenterPoint customers.

Cross Texas Transmission will build the northern portion of the line, running from Grimes to Limestone County.

Houston represents more than 25pc of the load in the Electric Reliability Council of Texas (ERCOT) territory. 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.

"The southeast Texas region that will be served by the Houston Import Project is a hub that will drive economic growth not only in Texas, but also across the country," CenterPoint senior vice president Kenny Mercado said.

The new line is opposed by two large power producers that operate generation in Houston.

Last month, NRG Energy and Calpine appealed a December 2014 PUC order, which backed the Texas grid agency's process that determined the line will be needed. Generators said the cost of the line exceeds potential congestion cost savings.

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."

Since Texas introduced competition into its electric market in 2002, transmission costs have become a bigger share of customer bills. Average regulated transmission-related costs since deregulation have risen by nearly 70pc across ERCOT, the primary grid that serves 90pc of the state's load. Some of the increase is due to the \\$7bn initiative to build a network of 345kV lines to transfer wind power from west Texas to major load centers.

The legal challenge to the Houston line also factors into an unresolved battle over whether the state's energy-only market structure can encourage new generation needed as annual power demand grows.

Industrial power users support construction of the Houston Import Project. "We are starting to see electricity congestion in the Texas Gulf Coast region that can erode the confidence of those eager to invest here," Texas Association of Manufacturers president Tony Bennett said.

The PUC has 180 days to act on the filing.