Texas PUC Must Revisit Selection Process

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In mid-January, the municipally owned utility in Garland, Texas, brought a complaint against the Texas Public Utility Commission (PUC), alleging it was unfairly excluded from the bidding process of building competitive renewable energy zones (CREZ). Judge Stephen Yelenosky ruled in favor of Garland and instructed the Texas PUC to revisit its selection process of transmission service providers.

‘This decision simultaneously encourages customer protection and the development of clean energy – goals that benefit all Texans,’ said Garland City Attorney Brad Neighbor in a statement. ‘The PUC should not put the interests of big transmission-line developers before the interests of Texas ratepayers.’

However, the ruling was not a complete victory for Garland, as it argued unsuccessfully for a temporary injunction against CREZ development. The city of Garland contends that as a municipally owned utility, it operates as a nonprofit and can borrow money at a lower cost. Such advantages, Garland argues, allow it to build transmission lines at a lower cost than other transmission providers.

Garland submitted a proposal to build transmission lines in 2008 to participate in the CREZ construction process, but the PUC rejected the plan. The municipal utility, which has built about 130 miles of transmission lines in Texas, says it presented the lowest-cost option and, therefore, should have been considered.

Terry Hadley, spokesperson for the PUC, acknowledges that while there are some minor issues the PUC commissioners need to revisit, the judge did not rule or overturn existing law. Hadley gave no timetable for the PUC commissioners to respond, but sources close to the matter indicate the PUC has 90 days to respond to the ruling.

Hadley explains that under Texas law, the PUC has no jurisdiction over a municipal utility, including – among other things – the way it routes transmission lines.

‘The PUC has no ability to revoke an order over a municipal utility, and that was key to why Garland was not selected (in 2008),’ Hadley says. ‘In essence, the PUC has no control over a municipal utility.’

Meanwhile, the construction of CREZ lines will continue.

‘We are continuing to build CREZ lines under our certificate of convenience and necessity,’ says Catherine Cuellar, a spokesperson for Dallas-based Oncor, which was awarded a $1.4 billion contract to build 850 miles of CREZ lines in May 2009. Oncor is currently building the 345 kV Bowman-Jacksboro line and a 345 kV Jacksboro to Willow Creek to Parker transmission line, both of which are expected to add wind capacity.

According to Eric Bearse of the Wind Coalition, a regional partner of the American Wind Energy Association, any delay in the CREZ projects already approved by the PUC will put jobs, economic development and renewable energy development at risk.

‘While the decision creates some short-term uncertainty, we are hopeful that the long-term building of transmission lines will add thousands of megawatts of wind power to the grid, and we will move forward as we have prior to the lawsuit.’

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