From the Dallas Morning News

PUC to discuss Garland utility's bid today

12:00 AM CST on Friday, January 29, 2010
By ELIZABETH SOUDER / The Dallas Morning News
esouder@dallasnews.com
 
The city of Garland has thrown regulators into a riddle over plans to build transmission lines to bring West Texas wind power to big cities.
 
Garland Power & Light, a tiny utility with 32 employees, bid to build transmission lines in the Panhandle. Garland lost.
 
The Public Utility Commission said it excluded municipal utilities because munis don't have to answer to the commission on building transmission lines. Plus, if anyone in the Panhandle opposed the line, he would have to take his concern to the Garland City Council rather than to a state regulator.
 
"We don't know where the line's going. We don't know how much it's going to cost. We don't know what materials it's made of," said PUC Chairman Barry Smitherman.
 
So Garland sued the PUC. A judge earlier this month told the commission to rewrite its order for the transmission lines.
 
Smitherman plans to discuss the issue today with the two other commissioners at an open meeting.
 
If they decide to include Garland, that could delay the $5 billion project and fundamentally change the way traditional hometown utilities operate.
 
Garland city attorney Brad Neighbor said the Dallas suburb wants to build the lines to bring in money to offset customers' bills.
 
"What we would like to do, and what we feel capable of doing, is building those lines in the most cost-effective manner," he said. "As far as the benefit to be obtained, it's offsetting the cost of transmission" for customers.
 
Municipal utilities don't have to obtain a so-called certificate of convenience and necessity from the PUC to build a transmission line. To get a certificate, a utility must go through a process of notifying residents about a power line and hearing complaints.
 
The PUC then chooses the exact site for a line, the materials and a timeline based on a number of considerations including cost, environmental impact, aesthetics and community impact.
 
Because munis don't have to go through this process, it's not clear how much control, if any, the PUC would have over the construction.
 
Garland attorney Neighbor declined to say how, exactly, the City Council would handle complaints about the transmission line from Panhandle residents.
 
When the commission blocked Garland from participating in the project, commissioners offered eight reasons. A judge struck down four of them, including concern that a muni can't offer residents in faraway places an "independent, objective and statewide adjudication regarding the routing and timing of construction."
 
The judge didn't strike the PUC's concern that it doesn't have jurisdiction over munis.
 
Now commissioners must decide how to rewrite the order that chose bids of about a dozen utilities to build the lines.
 
They could simply edit the order by erasing the four reasons for excluding Garland that the judge disliked, without accepting the city's bid.
 
Or they could rejigger the project and give Garland a piece. Doing so could delay construction on lines that other utilities have already begun to plan. Delays to the lines mean delays to more wind power projects.
 
Smitherman declined to say which way he's leaning.
 
"I think it's incredibly important that we move forward with speed," he said.
 

 
As of this posting, I don't have any information on the results of Friday's Public Utilities Committee meeting. At stake for Garland ratepayers is the ability of GP&L to offset future transmission costs with income-producing infrastructure.
 
The gist of the PUC chairman's statements in the article above was that it's too late to reconsider how the PUC made its selections of CREZ operators, no matter if it was done legally or properly, that only speed matters. Judge Yelenosky has already disagreed and sent the decision back to the PUC, stating that there is no evidence Garland’s proposal would cause a relevant delay in the CREZ process.
 
I can find no relevance to the stated concern that the PUC doesn't regulate municipally-owned utilities. The transmission lines being debated will be regulated by ERCOT, which regulates our current transmission lines. There was an earlier suggestion that seemed to imply landowners would be better treated by the mega-utilities than by a municipality. As the judge stated in his order, the "PUC relied upon factors that are not relevant to providing transmission capacity in a manner most beneficial and cost-effective to electric customers and based its decision on underlying findings that lack substantial evidence" (emphasis added). Nothing in the article above gives any indication that the first concern is cost-effective delivery for electric customers because GP&L can reduce that cost.
 
The one point in the article that I don't follow is the reference to GP&L being a small, 32-person utility. GP&L is one of the largest municipally-owned utilities in the state and country and has far more than 32 employees. GP&L operates several power plants and maintains miles and miles of transmission and distribution. Maybe it was just a typo. GP&L isn't nearly as large as mega-utilities like TXU and Reliant but local services and reliability are much higher. Also, GP&L power costs have been lower than TXU for years (although GP&L doesn't currently compare as well against numerous companies other than TXU during this period of extra-low costs for natural gas).
 
I expect to learn tomorrow in a Council briefing if Garland ratepayers have been given an opportunity to contain costs or if they have to pay the mega-utilities for what we could have done ourselves.