Texas finalizes plan to expand wind lines

HOUSTON (Reuters) - Texas utility regulators on Thursday awarded nine companies rights to build $5 billion in new electric transmission lines to move power from windy areas to big cities like Dallas and San Antonio, a move aimed at doubling renewable energy supplies.

Dallas-based Oncor, the state’s largest power company, American Electric Power’s joint venture Electric Transmission Texas and Sharyland Utilities, along with affiliates of FPL Group, Spanish-based Isolux Corsan and LS Power Group were awarded major portions of the grid expansion, which will add as much as 2,900 miles of new power lines.

“We have taken a big step to deliver more wind power to Texas electric customers,” Texas Public Utility Commission Chairman Barry Smitherman said after the panel’s vote.

Texas currently leads the nation with 8,005 megawatts of wind-generating capacity, an electric resource that produces no greenhouse gas.

Rising production from wind farms accounted for 4.9 percent of power consumed in the state last year, up from 2.9 percent in 2007, according to data from the Texas grid operator.

But rapid addition of turbines in the western half of the state outstripped the ability of the existing high-voltage network to move the power to the state’s largest cities, creating costly grid congestion in 2008.

Last year, the commission identified needed transmission pathways to accommodate as much as 18,500 megawatts of wind generation in the next few years.

Oncor, which was assigned new lines in north and central Texas valued at about $1.3 billion, said it will now begin detailed engineering work and land purchases.

“Oncor is now focused on building the section we were awarded on-time and on-budget,” said Charles Jenkins, senior vice president of transmission and system operations for Oncor, a unit of Energy Future Holdings Corp, which is owned by Kohlberg Kravis Roberts and TPG.

Electric Transmission Texas was awarded about $800 million in wind-related grid projects. ETT is a joint venture of American Electric Power and MidAmerican Energy Holdings, part of Warren Buffett’s Berkshire Hathaway Inc.

The Lower Colorado River Authority, a non-profit state affiliate, was assigned $750 million in projects while Sharyland Utilities, an affiliate of Hunt Oil Co, was awarded roughly $400 million.

The commission assigned the highest-priority projects to companies it already regulates and awarded other project to three new market entrants.

FPL’s Lone Star Transmission, was awarded $564 million in projects, while Isolux Corsan’s Wind Energy Transmission Texas and LS Power’s Cross Texas Transmission each got roughly $400 million in projects.

“We are attempting to diversify the risk with the number of companies we have chosen, with companies doing business in other states and other countries, along with our incumbents,” Smitherman said.

Smaller projects were assigned to three cooperatives.

Editing by Christian Wiessner and Chris Baltimore