Texas Electricity Generation to Cushion Demand

Here's the opening line by the Texas Chamber of Commerce in any bids to lure West Coast business: by this summer, the completion and continued construction of new generation plants in Texas will create an electricity supply about 23% higher than peak firm demand.

"With all these new power plants, Texas is a buyer's market," said Pat Wood III, chairman of the Texas Public Utility Commission. "It's great news for electric customers as we open our markets to retail competition."

Statewide, firm electric demand in Texas is expected to reach 67,000 MW by this summer. However, the total generation capacity should exceed 83,000 MW for a 23% reserve margin, PUC reports.

Within the Electric Reliability Council of Texas Inc. (ERCOT), the bulk electric system that serves about 85% of the state's electric load, firm peak demand is projected to reach almost 56,500 MW this summer while installed capacity will exceed 70,700 MW. ERCOT maintains the state's transmission system and has several major transmission projects under way to relieve existing constraints and connect new power plants to the system.

In Texas, retail electric competition begins Jan. 1, 2002 for customers of investor-owned utilities. However, a pilot project is only a few months away - it begins June 1 for selected areas of the state. Under the Texas plan, municipal utilities and electric cooperatives will have the option of participating in retail competition, too.

Since open transmission access and wholesale competition began in Texas in 1995, nearly 50 new plants are either completed or under construction. More than 25 additional generation projects have been announced as well. The new plants all together will add more than 21,000 MW of capacity by the summer of 2002, which is enough to power five million Texas homes on the hottest summer day, PUC said.

Texans also benefit from a diversified power supply. Nearly 46% of the electricity in the state is natural gas-fired, and coal and Texas lignite supply another 41%. The remaining 13% comes from nuclear plants. Although renewable energy supplies less than 1% of the state's electricity, there are more than 20 wind projects proposed for West Texas with several already under construction.

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