The consumer case for additional transmission investments

In the past few years, Texans have seen firsthand the effects of our aging power grid. Extreme weather events like winter storm Uri resulted in a grid failure that affected a majority of Texans and resulted in the tragic death of at least 246 people. In February, tens of thousands of Austinites went without power for days during another winter storm. This summer’s extreme heat has already broken records for electricity demand, putting even more strain on the grid.

Most people are aware of the role that power plants played in these events, but transmission lines are also crucial to the stability of the grid. For example, during Uri, extra electricity was available both in-state and around the country but it couldn’t make it to homes due to insufficient transmission.

One study estimated that each “additional 1 GigaWatt (GW) of transmission ties between the Texas power grid (ERCOT) and the Southeastern U.S. could have saved nearly $1 billion, while keeping the heat on for hundreds of thousands of Texans.”

With more extreme high and low temperatures across the state, the electrical infrastructure will continue to face increased stress. Improving transmission across Texas would not only increase the grid’s resilience to rising demand, but also save consumers money and protect the environment. Some possible improvements include weatherization upgrades, building new lines, optimizing existing lines with new technology, and increasing our connectivity to other states.  

How the grid works

The electric grid transports electricity from a power plant to the consumer through a series of transmission lines, distribution lines, and substations. Transmission lines carry electricity across long distances from the power generation source to the cities. Substations and transformers step up the voltage for efficient transmission and step it down when the energy reaches the distribution lines. Finally, the distribution lines carry the energy to users throughout the city.

Each of these components has a capacity of electricity that it can safely handle, and when supply or demand rises above that capacity, the grid becomes congested and electricity can’t reach its destination. Congestion means wasted energy for power plants, and in a time of increased demand can result in blackouts or brownouts. 

Reducing demand for electricity, for example through energy efficiency and rooftop solar, is a critical way to reduce strain on the transmission and distribution system and should be maximized and sometimes can avoid the need for transmission upgrades. For example, in 2016 AEP estimated that installing a battery storage system in north Texas would save consumers millions of dollars.

But improving the transmission and distribution system is also a critical step towards improving the reliability of grid reliability and saving consumer money.

Hardening the grid against extreme weather

As our demand for electricity rises, the age of our existing infrastructure will continue to be a limiting factor. Across the US, over 70% of electric infrastructure is over 25 years old, and the average large power transformer is around 40 years old. Fortunately, now is a great opportunity to upgrade and renew our grid. As part of the federal government’s Grid Resilience State and Tribal Formula Grants, Texas’ Division of Emergency Management has been given $60 million to identify and replace weak points in the grid and minimize disruptions. This grant will now be distributed by TDEM to projects that “generate the greatest community benefit providing clean, affordable, and reliable energy.” For instance, the funds could be used to prevent future outages through measures like tree trimming, which would ensure that branches don’t fall on lines and disrupt power during freezes and hurricanes. Likewise, this funding could be used to weatherize and replace aging segments in the grid, install grid-enhancing technologies, and increase connectivity across the state. If these funds are allocated well, we can mitigate the electricity and repair costs consumers face during emergencies.

Building more transmission

Fortunately, these upgrades are likely to bring direct benefits to the state. A report developed by IdeaSmiths and Advanced Energy United titled “ERCOT 2040” projects that the state could see a number of benefits from investing wisely in transmission upgrades. The optimal transmission upgrade plan would result in at least $7 billion in production cost savings, even after factoring in the cost of construction. This model prioritizes the areas with the highest congestion, namely the areas around Laredo, West Texas, and Central Texas. According to the report, this plan would also generate “roughly 40,700 (20-year, full time equivalent) jobs,” cut carbon dioxide emissions by 121 billion pounds annually, and reduce annual water consumption by 50 billion gallons annually. 

With increased capacity, Texas could also approve more energy generation projects, thereby increasing the amount of energy available for use in the state. According to a 2022 study, the renewable projects waiting in the queue could generate up to 130 gigawatts, roughly quadrupling the state’s renewable generation. This study also estimated that even a portion of these projects would be sufficient to replace the need for coal generation. Unfortunately, many of these projects face indefinite delays because the cost of installing the required transmission lines to make them operational is often too high for the energy company to bear. Wind and solar plants need to be located close to where the wind and sun are strongest, however the lines to these regions often have inadequate capacity. Without transmission upgrades in these regions, the project becomes too inefficient and costly to operate. On a national level, the energy stuck in queues amounts to roughly 2,000 gigawatts. Although Texas has the second-best queue completion rate in the US at 30%, expanding transmission capacity would make the state even more appealing to utility companies seeking to develop their renewable power projects.

Reduce barriers to new development

Another key debate around modernizing energy infrastructure is Texas’ Right of First Refusal law. This law stipulates that companies with an established presence in the region must be given preference when a new project is proposed. If the company chooses not to proceed, then the project can be offered to other developers. This measure is intended to give existing companies an incentive to further expand the grid, but it also prevents new companies who may be better equipped for the project from entering the market. The law, passed in 2019, has been challenged by the 5th Circuit Court of Appeals on the basis that it violates the Interstate Commerce Clause of the Constitution. The case is now being considered by the Supreme Court, and is awaiting comment by the Solicitor General. Because of anti-competitive laws, utilities face little pressure to appeal to consumers, and instead they are motivated by maximizing their own profits.

Make existing transmission lines more efficient

One possible modification to existing lines is the installation of grid-enhancing technologies like Dynamic Line Rating (DLR) systems. DLR systems are electronic systems that monitor factors like temperature, wind speeds, and rain to maximize the amount of electricity the line can carry. While most power lines are managed using Ambient-Adjusted Ratings, which estimate the capacity of lines based on average air temperature, DLR offers the ability to track more conditions and adjust the throughput of electricity to maximize their efficiency. As an added benefit, wind farms could take advantage of wind chill during peak generation times, making them even more effective during those hours. 

Increasing capacity brings several benefits. In a trial conducted by Oncor in Texas, DLR-enabled lines consistently delivered between 5-30% more electricity compared to static rated lines. When spread across a larger network, this added capacity can help alleviate or eliminate congestion. However, to see the benefits on a broad scale, investment in implementing grid-enhancing technologies would be needed across the state. As a 2019 DOE report notes, grid-enhancing technologies can “expand the nation’s power highway system, but the exits and intersections must be capable of using that new capability for it to be worthwhile.” Statewide adoption of systems like DLR can increase the efficiency and reliability of our electric grid, reduce the amount of wasted energy, and pass those savings onto consumers.

Connecting our grid to the nation’s

Another possibility to expand transmission infrastructure is to connect the state grid to a broader national “Supergrid.” Currently, the US power grid is split into 3 regions: East, West, and the independent grid in Texas. By integrating these three regions, grid operators in one part of the country could lend power in times of increased demand, reducing the risk or duration of blackouts. In fact, the Southern Cross Transmission line plans to connect Texas to the southeast through Louisiana and Mississippi. By connecting to other states, generators in Texas with surplus electricity could sell their excess power to other states. This approach presents an opportunity for Texas to leverage its access to renewables and generate increased profits. Rather than letting wind and solar power go to waste during times of lower demand, we could take advantage of the abundant sunlight and wind in our state to generate additional income.