Cost of Wind Power Transmission Lines Rises Sharply to $6.79 Billion

The cost of building thousands of miles of transmission lines to carry wind power across Texas is now estimated at $6.79 billion, a 38 percent increase from the initial projection three years ago.

The new number, which amounts to roughly $270 for every Texan, comes from the latest update on the project prepared for the Public Utility Commission (see page six). Ratepayers will ultimately be on the hook for the cost, but no one has begun to see the charges appear on their electric bills yet because the transmission companies building the lines must first get approval from the commission before passing on the costs to customers.

A commission spokesman, Terry Hadley, says that the first of these "rate recovery" applications may be filed before the end of the year. Ultimately, the commission says, the charges could amount to $4 to $5 per month on Texas electric bills, for years.

In 2008, when the Public Utility Commission approved the project, it was estimated at $4.93 billion. Gov. Rick Perry, who appoints the three Public Utility Commissioners, has strongly backed the build-out, which will result in several thousand miles of new transmission lines carrying wind power from West Texas to large cities hundreds of miles across the state. This is expected to spark a further boom in wind farm development, particularly in the Panhandle. Texas already leads the nation, by far, in wind power production. Electricity generated by other sources, like natural gas, coal or solar, can also use the lines.

However, deciding the routes for the lines — a painstaking process that played out in the hearing room of the Public Utility Commission — stirred controversy, as landowners in the Hill Country and other parts of the state tried to prevent them from going through their property. The transmission companies pay a one-time sum to the landowner for an easement to build the lines across his or her property, but ultimately the companies have the power of eminent domain if the landowner resists. Hill Country landowners did succeed in stopping one line and a portion of a second, after grid officials determined that it was possible to upgrade existing infrastructure, but serve the same purpose, more cheaply.

The new lines are all expected to be completed by December 2013, although delays could still occur. Construction of the lines is at various stages; one company, Wind Energy Transmission Texas, plans to begin building 378 miles of lines next month, for example. 

Among the reasons for the increased costs, according to the new report, are that the original 2008 estimate used straight-line distances to calculate the cost of the lines. However, as the process played out, the Public Utility Commission often requested that the lines follow fences or roads in order to minimize the intrusion. So the distances will probably be 10 percent to 50 percent longer than the original planners allowed for, the report says. Inflation also boosts the price tag.

The new estimate, of $6.79 billion, is also subject to change.

"It is likely that costs may fluctuate and change over the next year," states the report, which was prepared by an engineering services company called RS&H and published in July.