Moving electricity from generators to consumers requires numerous components, including conductors, towers, transformers, relays, breakers and switches, as well as rights of way to the land over which the lines pass. <<<>>>
Within ERCOT, transmission and distribution service providers (TDSPs) move electricity along transmission lines to local REPs. They are required to provide nondiscriminatory access to the network of transmission lines collectively known as the "grid." The ERCOT grid contains 38,000 miles of transmission lines. Again, the ERCOT power region covers about 75 percent of Texas' land area and is one of only three grids in the U.S. The 38,000 miles of lines in ERCOT's region include 8,100 miles of 345-kilovolt (kV) lines, 16,000 miles of 138-kV lines and 11,500 miles of 69 kV lines. Distribution lines that distribute power to homes and businesses are below 69 kV; individual REPs manage these. 15 Data were not available to determine the mileage of transmission and distribution lines outside the ERCOT power region. The cost of transmission and distribution comes from the capital cost of required equipment and operating and maintenance expenses. PUC reviews proposals for new transmission lines and setting rates for transmission services in all parts of Texas. These are charged to all REPs or utilities that receive power from the generation companies. Within the ERCOT power region, the "postage stamp" rate is used for transmission costs. The postage stamp rate is a shared expense paid by all REPs, and ultimately the end user, in the ERCOT power region to TDSPs for the cost of transmission services. In 2007, the total cost for transmission approved by PUC was $1.2 billion. The total amount paid by each REP is determined by their percent of load (total kWs). For example, if a retail provider accounts for 20 percent of the electricity uploaded onto the ERCOT grid, that provider would be responsible for 20 percent of the approved total cost of transmission services paid to TDSPs. Likewise, if a TDSP is responsible for carrying 15 percent of the ERCOT power region's total load, 15 percent of each REP's transmission service payment would go to that TDSP. Any new transmission lines built or any increases in line maintenance in the ERCOT power region will result in an increase in the postage stamp rate. Included in capital costs are the considerable sums to lease or buy easements to the land over which transmission and distribution lines travel. According to ERCOT, installing one mile of 138-kV transmission line costs approximately $1 million; installing one mile of 345-kV transmission lines costs approximately $1.5 million; and installing one mile of 765-kV transmission line costs approximately $2.6 million; land easement acquisition accounts for 5 to 10 percent of that cost in rural areas and 10 to 20 percent of the cost in urban areas. 16 A recent study completed by ERCOT on the potential costs to build transmission lines to West and Northwest Texas to transport electricity generated from wind power estimated that it would cost between $3 and $6 billion depending on the amount and capacity of transmission lines built. 17 Land easement acquisition for transmission and distribution lines becomes significantly more complicated and costly when eminent domain authority - the ability to take privately owned land through a legal process for the public good - must be asserted to obtain the land. In a typical eminent domain easement acquisition, the PUC of Texas has already identified the land easements needed for the lines; the TDSP is responsible for acquiring the land easement and offering the landowner an appropriate amount of money for the land easement purchase. More often than not, the amount offered for the easement is based on the fair market value of the taking (land easement) including any damage to the land tract. If the landowner does not want to sell or thinks the offer is too low, the utility company may proceed with an eminent domain process through the county. Disputes between landowners and utilities requiring eminent domain proceedings are heard by a condemnation court - a panel of three people appointed by the county judge who are knowledgeable about easement acquisitions and land values in the county. The condemnation court determines the appropriate amount owed to the landowner for the easement. If either party disputes the condemnation court findings, they can appeal the process to the civil court that has jurisdiction over that county. According to the Lower Colorado River Authority (LCRA), a general wholesaler in Central Texas eminent domain authority is typically used in 6 to 15 percent of land easement acquisitions for transmission lines.
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