Cost of wind power lines blows past earlier estimate

Aug 26 - McClatchy-Tribune Regional News - Tom Fowler Houston Chronicle

The cost of building thousands of miles of high-voltage transmission lines to bring West Texas wind power to major markets has risen nearly 40 percent from original estimates, according to a state report.

When approved by the Public Utility Commission in 2008, the plan to build lines to support up to 18,500 megawatts of West Texas wind power was tagged at $4.9 billion dollars.

A quarterly update now puts the cost at $6.8 billion, a 38 percent increase.

Early estimates said the cost of the new lines would raise Texans' monthly power bills by about $4, but the higher price tag will push that fee closer to $5. Companies building the lines have not yet filed with state officials to begin recouping the costs, but that process may start later this year, said Public Utility Commission spokesman Terry Hadley.

Texas leads the nation in wind power capacity, with nearly 10,000 megawatts available from wind turbines built in the past decade.

Most of the wind farms are in rural West Texas, however, far from the major cities that use the most power, and without enough high-voltage transmission capacity to get the wind-generated electricity to those populous areas.

In 2008 the PUC and the Electric Reliability Council of Texas, which operates the state power grid, outlined several plans for building hundreds of miles of transmission lines, with costs ranging from $2.9 billion to $6.3 billion. The PUC eventually chose the plan estimated then to cost $4.9 billion.

The power line projects drew opposition from some Hill Country landowners and a handful of legal challenges as the massive steel towers began to creep across the countryside.

But most of the lines still are expected to be in place by December 2013.

Several factors pushed the costs higher, according to the report.

Officials made the original estimates before completing detailed engineering and design work, and before securing all the rights-of-way. In some cases the rights-of-way requirements grew because of decisions for the lines to follow existing paths instead of the most direct routes.

The original estimates also failed to include financing costs and the effects of inflation, and apparently didn't include contingency markups that typically are in big infrastructure projects to allow for undefined variables and risks, according to the report.

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