Like all electric infrastructure across the country, LP&L customer meters are part of a complex circuit and grid system. It is not possible to pick and choose individual meters for connecting to the larger power systems.
On Dec 9-11, 2023, LP&L is moving the remaining 30% of our customers to the ERCOT grid. This follows the successful initial 70% connection in 2021.
We understand and share the concerns our customers have after the February winter storm. The well-being of our customers is always at the forefront of all decision making.
We began the process to join ERCOT in September of 2015. The original benefits of joining ERCOT still remain today.
However, it is clear that moving forward, serious decisions must be made to fix the problems in the ERCOT market. The root causes of ERCOT’s operational issues need to be fully investigated and solutions must be found. Legislative hearings will continue over the coming weeks and months, and LP&L will track this process very carefully.
ERCOT manages the flow of electric power to 24 million Texas customers - representing about 90 percent of the state’s electric load. As the independent system operator for the region, ERCOT schedules power on an electric grid that connects more than 46,500 miles of transmission lines and 570 generation units. ERCOT’s members include consumers, cooperatives, generators, power marketers, retail electric providers, investor-owned electric utilities, transmission and distribution providers and municipally owned electric utilities.
ERCOT is a membership-based 501(c)(4) nonprofit corporation, governed by a board of directors and subject to oversight by the Public Utility Commission of Texas and the Texas Legislature.
ERCOT anticipates having sufficient generation in the foreseeable future, based on normal operating conditions. However, if reserve margins do retract, ERCOT has a variety of operational tools to address scarcity conditions. The retirement of older generation followed by new investments is a natural behavior in the ERCOT market, and ERCOT does plan for, and expect, new generation coming online in the coming years.
As an explanation, ERCOT is expecting record-breaking peak usage this summer. To help with this demand, almost 3,800 MW of new generation resources began operating in 2017. However, the anticipated high demand combined with a decrease in overall projected generation capacity for summer 2018 is expected to result in tight reserves this summer.
ERCOT’s focus this summer will be on performance, and expects this will be the same for anyone participating in the ERCOT market. At this time, based on normal operating conditions, ERCOT anticipates there will be sufficient generation to meet demand.
New transmission lines will be the primary investment. These lines will connect Lubbock to the ERCOT grid, allowing LP&L to access power from all 570 generation units throughout the state. The citizens of Lubbock will not be burdened with these costs. Even though the City will issue bonds to pay for the transmission lines, the PUCT is expected to approve a network transmission service right to assist in recovering the costs associated with new transmission lines.
LP&L is expected to be able to provide savings to our customers through affordable power in an open and accessible market.
Expected to provide a diversified energy portfolio from Texas-based power plants with access to West Texas wind and natural gas, solar and coal from across the state. We avoid the need to build an expensive power plant with estimated costs ranging from $350 to 700 million while providing stability through having access to 570 generating units across Texas.
Simplifies the regulatory environment. The Public Utility Commission of Texas regulates the ERCOT Regional Transmission Organization. This is a stark change from SPP, which is regulated by FERC. This solution would unite Lubbock with the State of Texas though the statewide transmission system and ensure Texas leaders have input into our long-term prosperity.
By entering into a market solution in ERCOT, we would eliminate the need to build an expensive power plant with estimated costs ranging from $350 to $700 million. We would also save millions of dollars on future operation and maintenance costs of a new power plant that may run on an intermittent basis.
We have eliminated the need to build an expensive power plant with estimated costs ranging from $350 to $700 million. This capital expenditure would have been debt funded, and those costs would have been passed to LP&L customers. Alternatively, while there will be a need to build new transmission lines to connect with the ERCOT power grid and bonds will be issued to pay for the transmission lines, a new revenue stream from the Texas network transmission service rate is expected to cover the annual debt service on those bonds and provide an additional return on those assets.