May 24, 2019

PUCT considers transmission route mods for Oncor/AEP line in oil field

by Kelso King, Grid Monitor
Source – Grid Monitor
Posted 05/23/2019

Administrative Law Judges recommended approval of the applicants’ preferred Route 320, including an agreed modification to Route 320, which would significantly reduce the number of habitable structures that would otherwise be within 500 feet of the centerline of Route 320. While some opposed Route 320 or supported other alternatives, the ALJs believed that “a number of factors such as cost, length, and effects on the environment and wildlife resources” favored Route 320.”

Chairman Walker noted that this project is in the Permian Basin and everyone is aware of the load growth and need for economic development there. She explained she had come to the meeting expecting to approve this so they could begin construction but the more time she had spent on it, the less likely that seemed.

Oxy noted there is no way to route the line without going through a very active oil field and they had worked with other parties to develop Route 325 modified, which was unopposed. Oxy asserted that the recommended Route 320 would go through the most active part of the field and create a lot of issues, adding that Route 325 would impact their operation but not as much.

Oxy acknowledged that the western corridor would increase the cost of the line but Oxy would provide right-of-way concessions for the 3 miles of the total 50 miles of line that they own.

Chairman Walker asked if Oxy was willing to absorb some of the additional $18 million cost but Oxy was not authorized to offer that.

Commissioner D’Andrea asked Oxy about the costs and benefits of the two alternatives.

Oxy replied that even a small difference in production on one well creates a significant economic impact on Oxy, explaining that shifting one well by 600 feet could reduce production by 10%.

COG Operating LLC (Concho) also supported Route 325 modified, their main concern being existing wells and batteries very close to the proposed route, adding that moving a surface facility would cost at least $3 million. Concho also noted a negative impact on royalties to landowners.

Chairman Walker noted a significant difference in time required by electric transmission and oil & gas projects, which puts these industries in opposition. The Chairman also noted that “Oxy in particular and other oil and gas companies are the first to beat people about the head and shoulders for not getting transmission built out there.”

Oncor requested additional flexibility in siting to avoid impacting the oil and gas facilities, adding that it is often difficult to obtain consent of all landowners and, due to the speed with which the oilfields are changing, most plans are obsolete as soon as they are completed.

Chairman Walker noted that, although she did not want to name any names, the Commission’s intent is to prevent utilities from abusing this discretion and she was not inclined to move from past precedent, that all landowners have to agree to any route modification. While she doesn’t mind giving some leeway and knows some modifications will be necessary, she could not give authority to make modifications against the consent of a landowner.

Commissioner D’Andrea agreed that it was a lot to ask of landowners to not get their consent, adding that the Texas legislature was also likely to have a problem doing anything without landowner consent.

Oncor discussed some reasons it can be difficult to locate a property owner, adding that this is more common in West Texas than in other areas.

Chairman Walker had come prepared to work on some modifications and approve a route, because they need to get transmission built in the Permian basin, but that $18 million is a large amount to add to the cost of the project.

The commissioners decided to consider these issues further and address them again at their next Open Meeting, on June 13, 2019.

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