West Texas, with its growth and its booming energy industry, has been feeling the pinch in another energy sector–electricity.
“You may be in for another difficult summer, price-wise, here.”
When those words come from a vice president at ERCOT, the Electric Reliability Council of Texas, they sink deep. America might run on oil, but the oil and gas business, to a significant degree, runs on electricity.
But that VP, Kent Saathoff, who heads ERCOT’s department of Grid Operations and System Planning, also had some encouraging news of the help-is-on-the-way variety.
Saathoff, the keynote speaker at the March 21 luncheon of the Permian Basin Petroleum Association, addressed a full room of PBPA members about the growth in electric usage in west Texas and associated electric grid implications.
An employee of ERCOT since 1988, Saathoff arrived at the organization as a principal engineer and in 1996 became its transmission operations manager. In 2000 he became director of technical operations as the council prepared for retail electric competition in Texas. He supervised and designed implementation and enhancement of grid operations in old cell market systems, a step that was necessary to open the retail market in 2002. In 2002 he became the director of system operations.
Saathoff identified the Permian Basin’s biggest problem area, where supply and price are concerned, as the “Odessa North” sector, which has seen considerable growth.
“You’ve probably heard, and probably were directly involved with, the issue of what was being paid for electric power out here,” Saathoff said. “It went up substantially. I know we heard about it in Austin. It is due to transmission congestion, essentially in the Odessa North area. And you can see [here he referenced a map] how the Far West weather zone, which includes Odessa, had an increase in load over the period from 2010 to 2012. It’s due to the increased [oil and gas] production. And what that resulted in was some overloads.”
While the main constraints were felt in the vicinity of the Odessa North autotransformer, other areas had similar load congestion, Saathoff said. One such locale is an area called China Spring, northeast of Big Spring. Another is San Angelo.
Saathoff raised the question he knew some were thinking: “Why weren’t you [ERCOT] out ahead of this load?” And he admitted that ERCOT was aware of the impending pinch. “We saw it starting, probably about 2009, and we really started realizing it in 2010. And we started coming up with plans in 2010 to try to address that load increase. But the problem is, it takes time to build transmission lines, and so, frankly, the load was just growing faster than we could keep up with it.
“Okay—so what are we planning to do about it? Essentially, the problem is that a lot of this load is served off of the old 69 kV [kiloVolt] system that doesn’t have a whole lot of capacity,” Saathoff said. “So what is being done is a lot of that 69 kV system is being converted to 138 kV—to higher voltage, more-power-carrying transmission. So those conversions are going on and they’re also putting in bigger conductors to carry more power. There are several projects that were scheduled to be completed between June and the end of this year and several others will be done next year. However, these are only near-term patches and as you see they’re not all going to be in this summer. So we anticipate that you may be in for another difficult summer, price-wise, here.
“Again, these projects will just take care of the near term,” Saathoff said. “If the load keeps increasing we’re going to have to do more than this and we’re in the process of determining what more needs to be done out further into the future, into 2017.
“I mentioned there were other other areas, the China Grove northeast of here. That should be pretty well taken care of this year, with a new 345 and 138 conversion autotransformer. And that will hook into one of these new CREZ lines that are being completed. The San Angelo issue issue was really just a temporary issue last summer, because there was an outage—a major auto transformer there. So that should be taken care of.”
Earlier in his remarks, Saathoff defined ERCOT and outlined its responsibilities.
“There really three main portions of the electric utility system: generation, transmission, and distribution…. Transmission is high voltage—it’s 69,000 volts and above,” he said. “That’s our cut-off for transmission and, ERCOT’s purview kind of stops at generation and transmission. The distribution lines are those you see running along the streets here that carry the power to consumers. And then there are transformers on those poles that step it down to usable voltages.”
Up until 1995, Texas had utilities that were “vertically integrated.” In Saathoff’s words, “They did it all. They generated the power, they built and operated the transmission and distribution lines to serve the load, and they also had defined service areas where they had, essentially, captive customers. These were customers to whom they had a legal obligation to provide services.
“Now, what happened in the mid-1990s, there were a lot of companies that wanted to get into the generation business. And so in the mid-90s, the Legislature passed the ‘wholesale’ deregulation that allowed these non-affiliated generators that weren’t part of the vertically integrated utilities to access the transmission system and provide energy for compensation to the grid. In 1999, the Legislature carried that further in letting those previously captive customers at vertically integrated utilities be able to choose their retail electrical supplier. And essentially the business was really split up. The vertically integrated generators that were with those companies—they had to compete head-to-head with those new generators. And there were a lot of new generating companies getting into the business.”
“Now how does ERCOT fit into this grand scheme of things? Well, we’ve been compared a lot of times to air traffic controllers. Electric energy can’t really be stored effectively. We can’t put tanks that hold electricity out there like you all can with your product. It’s just not commercially viable yet…. So electricity has to be generated the instant it’s used and that requires a great deal of coordination with the power plants and the wires companies for us to be able to do that. And that’s ERCOT’s main responsibility.
“But essentially we’re responsible for system reliability—to make sure that that electricity is generated when it is needed and in the amount that is needed. We also ensure open access to transmission: that’s so that any seller or buyer has access to the transmission and distribution systems so that they can either buy or sell their electric energy.”
ERCOT does not own or operate any facilities either transmission or generation, Saathoff said. Ownership and operation of facilities is all in the hands of people who are in the market to make money. ERCOT coordinates the planning and the future construction of the transmission system.