Tomlinson: More transmission lines could carry clean energy through Texas. So what's the holdup?

Electricity prices are high because there are not enough transmission lines connecting renewable sources in West Texas to cities in the east.

Electricity prices in Texas get insane when the wind blows, the sun shines, and city slickers crank up the air conditioning. Prices in West Texas can drop to $20 a megawatt hour while Houstonians are paying $2,000.

The differential arises because Texas has not installed enough transmission lines to carry clean energy east, and fossil fuel generators want to keep it that way.

The Gulf Coast Power Association illustrated the growing political battle by asking a fossil fuel company’s lobbyist to don an Abraham Lincoln costume at its annual conference last week and debate a clean energy lobbyist dressed as Illinois Sen. Stephen Douglas.

The Lincoln-Douglas debate question, when answered, will determine the future of electricity prices, how long Texas relies on fossil fuels, and profits for dozens of corporations. Should we build more transmission lines or more natural gas power plants to meet our state’s growing energy needs?

Since the 2021 freeze that killed hundreds of Texans, most of the attention on the Electric Reliability Council of Texas grid has focused on generating enough electricity. But power market insiders have been bugging me to highlight the equally important and more complicated problem of transmission.

The wholesale electricity market is where generators compete to supply the lowest-priced power, and that’s where prices can range from negative numbers up to $5,000 a megawatt hour. Retail providers, like Reliant or San Antonio’s municipal utility CPS, trade wholesale electricity contracts and sell power to consumers.

The Public Utility Commission regulates the companies that provide the transmission lines between the generators and consumers. Commissioners decide which transmission lines are built and determine how much the transmission companies, such as CenterPoint and Oncor, can charge consumers for the service.

The media focuses on the average statewide electricity price, but ERCOT charges different prices at 11,000 locations around the state called nodes based on that location’s supply and demand. Often, wind and solar generate more power than the transmission lines can carry, which makes electricity cheap in the west while prices spike in cities east of I-35 when demand exceeds local supply.

Low prices in one part of the state are meant to discourage new generation facilities in that area, while high prices are supposed to encourage new power plants nearby. Transmission lines are intended to guarantee electricity can move around the state for reliability.

A new transmission line, therefore, can boost profits for renewable energy generators in one part of the state and hurt fossil fuel generators by increasing the supply where demand is high.

The Gulf Coast Power Association convinced Bill Barnes, a lobbyist for fossil fuel generator NRG, to wear a beard and stovepipe hat at the Austin conference. He argued that transmission lines hurt competition by discouraging companies from building natural gas power plants near cities.

Like many fossil fuel advocates, he wants to let high prices encourage new natural gas power plants.

Playing Lincoln’s rival was Mark Stover, who represents Apex Clean Energy. He argued that wind and solar projects need to go where they can access the cheapest land and generate the most electricity. Transmission lines allow cities to access clean energy that is cheaper than what new natural gas power plants can produce.

Both sides acknowledge that no one knows what technologies may emerge within the five years required to build a new transmission line or during its 70-year operating life.

The Public Utilities Commission and the Texas Legislature plan to overhaul Texas’s electricity market, and how much transmission to build remains a dilemma. Will Texas make clean energy from rural areas more reliable and fight climate change? Or will we encourage companies to burn fossil fuels closer to major cities?

The correct answer is a compromise that allows room for new technologies to compete, too.

Executives overseeing billions of dollars in fixed assets, though, made their case to the Gulf Coast Power Association audience for why their method of generation should win out. Attendees heard PUC Commissioner Will McAdams express his support for “dispatchable” electricity, a codeword for fossil fuels. The new ERCOT CEO Pablo Vegas was listening closely.

A phrase I didn’t hear at the conference was climate change. A lot of powerful people remain ready to sacrifice long-term sustainability for short-term profits if the public doesn’t stop them, and that is undebatable.