Massive Power Line Project for Houston Sparks Industry Contention

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Houston Import Project (HIP), a proposed, $590 million transmission line that is designed to improve power reliability in the Houston area, has sparked a number of disputes among power producers who disagree over whether there is a real need for it.

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In 2013, CenterPoint Energy (NYSE:CNP) (Houston, Texas), Cross Texas Transmission (Amarillo, Texas), Garland Power & Light (Garland, Texas) and Lone Star Transmission (Austin, Texas) made proposals to the Electric Reliability Council of Texas (ERCOT) to improve power reliability in the Houston area.

Earlier this year, ERCOT endorsed HIP, which was developed through the ERCOT Regional Planning Group (RPG). ERCOT said that studies found that multiple 345-kilovolt (kV) transmission lines (with a total length of 200 miles) are overloaded. ERCOT evaluated 21 options to address the situation, and made an analysis of eight of them, which involved constructing a new line to Houston.

ERCOT said that the Houston region will need new import capacity by 2018. The council noted the Houston area is expected to grow at rate of more than 100,000 new residents per year, and represents about one-fourth of the total ERCOT peak system load.

ERCOT's recommendations include:

• A new 122-mile, 345-kilovolt (kV) double-circuit transmission line from CenterPoint Energy's existing Limestone Substation (Limestone County, Texas) to Gibbons Creek Substation (Grimes County, Texas), and onto Zenith Substation (Houston).
• Upgrades to the Limestone, Gibbons Creek and Zenith substations.
• Upgrades to the existing 345-kV T.H. Wharton-Addicks Transmission Line.

However, independent power producers Calpine Corporation (NYSE:CPN) (Houston, Texas) and NRG Energy Incorporated (NYSE:NRG) (Princeton, New Jersey) filed a complaint with the Texas Public Utility Commission regarding HIP. Calpine and NRG contended that "the needs for the project have not been validly demonstrated."

NRG Energy said the real problem in the Houston area is not one of transmission infrastructure, but one of adequate power generation. NRG Energy said that ERCOT's load-scaling assumptions are not realistic and "the result of inadequate and incomplete study," adding: "ERCOT has not even established that a reliability problem exists. ERCOT ignored the load-forecasting methodology."

ERCOT said in June it plans to go ahead with the project despite criticism from Calpine and NRG. The estimated project is scheduled to be in service in 2018.

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