The Price of Power



Posted on November 4, 2009 at 6:06 PM

Updated Friday, Jan 29 at 5:56 PM

After Congress passed the stimulus package, Oncor — the company that builds and maintains power lines in North Texas — said it would line up for some of the money to link its grid with wind farms producing cheap and clean electricity in West Texas.

But now Oncor changed its mind, and one consumer group says the decision could cost consumers.

Oncor spokeswoman Catherine Cuellar explained the company's shift this way: "The possible delays associated with awaiting federal loan guarantees for this project could've increased the costs to consumers."

Oncor is erecting 850 miles of new power lines for $1.3 billion. That's the largest share of the 2,900-mile network the state approved to link wind farms in the Panhandle and West Texas to power-hungry Dallas-Fort Worth and other cities by 2012.

The Public Utility Commission says electric customers will pay up to $5 more a month to fund the project.

But the Cities Aggregation Power Project (CAPP), which represents more than 100 cities, says Oncor and the other companies building the grid should at least try to tap into the stimulus and save ratepayers some money.

"I think you're looking at saving somewhere between $50 and $100 million, easily," said Geoffrey Gay, CAPP's general counsel.

However, Oncor says environmental studies required to secure the stimulus loans could cause a delay, and Oncor — which has a good credit rating — says it doesn't qualify, anyway.

CAPP says a special provision in the rules might let Oncor tap stimulus money if it would try.

When Oncor and other transmission companies expressed their reservations to the PUC about pursuing stimulus money, commissioners agreed.

"I'd just hate to get us running down a rabbit trail that could turn out to be unproductive," said PUC Chairman Barry Smitherman.

But no representatives of ratepayers or environmental groups appeared, since the PUC said this was just an "informal" discussion of the issue.

All three members of the PUC are appointees of Governor Perry, whose dislike for the Obama administration's stimulus package is well known.

CAPP says Oncor has another reason to keep its costs high: Higher profits.

"So it's in their interest to maximize the amount of dollars that are going into the rate base that they can ultimately collect from ratepayers in this state," Gay said.

Oncor denies that profits are behind its decision not to chase stimulus money. The reason, it says, is timing, and the risk of transmitting cheap power later rather than sooner.

"We wanted to stick with the deadlines," Cuellar said.

Which means if Oncor doesn't change its mind, stimulus money for the new grid appears dead, too.