Texas Public Utilities Commission OKs Permian Reliability Plan

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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--With the Permian Basin producing oil and gas at record levels, the Texas power grid is strained with demand from artificial list systems, gas-processing plants and other related infrastructure. The Electric Reliability Council of Texas (ERCOT) forecasts power demand in the region will grow to about 26 gigawatts (GW) by 2038, which is equivalent to almost 33% of the entire ERCOT system's summer demand, according to a Public Utility Council of Texas (PUCT) press release.

In response, the Public Utilities Commission of Texas recently approved a reliability plan for the Permian Basin, which comprises upgrades with a total cost estimated between $12.95 billion and $15.32 billion. The reliability plan says that 23.7 GW will be expected by 2030, of which about 12 GW is for oil and gas and about 11.7 GW of load outside of oil and gas. Of 2038's 24 GW, 14.7 GW will be for oil and gas, and again 11.7 GW for non-oil and gas.

Many producers have turned to onsite power generation from natural gas, instead of waiting for power lines to be run. In recent years, this process has extended to large computers involved in bitcoin mining and artificial intelligence (AI) processing.

But those coping mechanisms still leave a huge need for expanding the power grid. ERCOT, following the mandate of House Bill 5066 passed in 2023 by the Texas Legislature, has developed a plan for meeting this demand.

"The legislation requires that the plan address extending transmission service into areas where mineral resources have been found, address increasing available capacity to meet forecasted load, and provide available infrastructure to reduce interconnection times in areas without access to transmission service," the council's press release said.

Torrid expansion has been underway since the early days of the shale revolution. ERCOT says it has endorsed "about $5.7 billion worth of transmission projects in the Permian Basin since 2014."

What's Involved
With great power demand comes great responsibility for transmitting that power to the end users, and ERCOT has suggested three options: a traditional 345 kV choice and two extra-high-voltage (EHV) options, one at 500 kV and the other at 765 kV. The 765-kV option would be Texas's first.

"EHV facilities are generally known to provide benefits of reducing losses for long-distance power transportation, increasing short circuit strength, and improving voltage stability compared with transmission facilities operating at 345 kV," ERCOT said. A final decision on the type of lines is expected by May 1, 2025.

PUCT commissioner Jimmy Glotfelty has been quoted stating his preference for the 765-kV lines, but that the final decision should be made by the transmission providers.

There is a cost difference between the options. ERCOT estimates that the total investment to meet 2038 needs from 765-kV lines and required local upgrades would be about $13.8 billion, while the cost for 354-kV lines and associated local upgrades would be about $12.95 billion, a difference of just more than 6%. Whether this would be enough to affect the decision remains to be seen.

Whichever of the three options wins in the end, ERCOT says there are certain underlying upgrades that would be required in all cases: "These common upgrades are a significant component of these options and are estimated to cost $4.02 billion."

The Commission could allow transmission service providers (TSPs) to begin planning the engineering of those before other final decisions are made.

Support in the Industry
Ed Longanecker, president of Texas Independent Producers and Royalty Owners (TIPRO), was typical among industry groups in saying his organization supported the measure.

"With load demand for the oil and natural gas industry already unmet and expected to increase significantly over the next decade, this plan will provide critical investment in transmission, related infrastructure and capacity," Longanecker said. "We applaud the PUC for advancing this important effort to address insufficient transmission access in the Permian Basin and to support continued growth in our industry and state, from an economic and energy security perspective."

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