Part 1 - Question for ERCOT

▶️1 - Kristi Hobbs, ERCOT

• Kristi Hobbs, VP of system planning and weatherization for ERCOT, discussed the impact of load growth in the Permian Basin.
• ERCOT carried out a study as directed by the commission, revealing a significant load growth in the Permian, with an increase of over 43% from the previous study.
• The load growth in the Permian is comparable to the current size of DFW or the Houston Galveston area, yet there is less than 3,000 MW of conventional generation in the region.
• Discussion on the development of local projects and import paths into the Permian region.
• The recommendation for the commission involved deciding on the level of voltage for import paths into the Permian, with 765 kV being a new consideration for ERCOT.
• ERCOT provided alternative solutions and a comparison document for the regional transmission plan to illustrate cost benefits.
• Transmission service providers will utilize these plans as loads materialize and go through a regional planning group process for further evaluation.
• Four main points of discussion: height of 765 towers, right of way width, cost of projects, and schedule for addressing current and future transmission needs.
• ERCOT is working on collecting updated cost data, as 85% of build costs are attributed to transmission lines and 15% to substations.
• Emphasis on meeting the current and future transmission needs to support grid reliability and provide value for consumers.

Part 2 - Presentations

▶️ Tony Zito, Siemens Energy

Siemens-PUCT-P55718_1iq77jfo7ob15.pdf

• Siemens Energy provides 345 kV dead tank breakers and 765 kV live tank breakers for the US market.
• Dead tank breakers interrupt current near ground level and live tank breakers do so at line level.
• 765 kV live tank uses significantly less SF6 gas, which is better for the environment.
• Siemens manufactures 345 kV dead tanks in Mississippi and 765 kV live tanks in Brazil, with all customer interactions managed in the US.
• Components for breakers are globally sourced, with similar lead times for 345 and 765 kV, except slightly longer for 765 kV cabinets.
• No significant cost or availability concerns due to collaborations with suppliers to meet growing demand.
• Outlined logistical considerations for transportation of breakers within the US.

▶️ Jason Neal and Alex Everett, HICO

HICO-PUCT-P55718.pdf

• HICO manufactures large power transformers in Memphis, providing various products including 765 kV transformers.
• Presentation focused on comparing 345 kV and 765 kV transformers regarding risk factors and lead times.
• Key differences highlighted in materials like bushings, but supplier capacity expansions expected to stabilize these risks.
• Pros and cons of single-phase vs. three-phase units discussed, with single-phase offering easier transport.
• Tariff impacts, geopolitical risks, and lead time risks evaluated; both voltage levels face similar constraints.
• 800 kV breakers are more costly and have longer lead times compared to lower kV models.
• HICO supports ERCOT's anticipated 765 kV expansion with domestic and international manufacturing readiness.

▶️ Jong Dae Lee, Hyundai Electric

HyundaiElectric-PUCT-P55718.pdf

• Presented a detailed comparison of supply chain timelines and cost variability between 345 kV and 765 kV transmission lines.
• Highlighted factors affecting lead times for design approval and material acquisition, particularly emphasizing differences in bushing supplier availability.
• Addressed transportation logistics, emphasizing that delivery from Korea to the USA remains unchanged, taking 8 weeks.
• Discussed production capacity expansion plans for facilities in Ulsan, Korea, and Montgomery, Alabama to handle the upcoming demand, particularly for 765 kV units.
• Details on cost variability were segmented into material, design, and processing aspects. Special emphasis was placed on using RIP bushings for high-voltage 765 kV transformers.
• Highlighted the strategic slot reservation system to manage lead times effectively.
• Strategic investments are being made globally to increase production capability, including hiring more employees and enhancing R&D efforts.

▶️ Pradeep Chaudhary, Hitachi

HitachiEnergy-PUCT-P55718.pdf

• Hitachi Energy has over 50 years of experience in producing high voltage transformers, particularly 765 kV units, and is actively investing to meet future demand.
• Hitachi emphasizes a vertically integrated supply chain for better control over critical components like bushings and insulation systems.
• It was noted that factories producing 345 kV and 765 kV transformers share technology, allowing for flexibility and optimization.
• The ongoing demand for power transformers and the need for long-term partnerships and production slot reservations were highlighted.
• Presentations stressed the importance of managing lead times effectively to prevent production delays.

▶️ Divjot Singh, GE Vanova

GEVernova-PUCT-P55718.pdf

• Presented GE's AIS products including substation disconnect switches, instrument transformers, and dead tank circuit breakers.
• Emphasized the importance of standardizing technology and references in the US and globally.
• Noted GE's factories globally as centers of excellence for supply, highlighting local and global market growth.
• Discussed lead times and load adaptation in ERCOT and globally, referencing specific product experiences.

   Todd Irwin, GE Vanova

• Highlighted high voltage circuit breakers and concerns regarding lead times as bottlenecks.
• Provided insight into manufacturing locations and strategies for increasing production capacity.
• Explored comparisons between 345kV and 765kV products, and shared risks including supply chain and field service labor for circuit breakers.

▶️ Kenneth Mercado, Quanta Services

Quanta-PUCT-P55718.pdf

• Presented Quanta's readiness to construct 765kV lines given current large-scale projects experience.
• Highlighted Quanta's strategic partnerships and resource availability within the US.
• Emphasized self-performance of work, minimizing subcontractor reliance to ensure schedule adherence.
• Discussed workforce training and development to enhance construction productivity and safety.

Michael Foster, Quanta Services

• Detailed Quanta’s capabilities in providing integrated project solutions from construction to engineering and procurement.
• Explained labor comparisons between 765kV and 345kV lines, highlighting efficiency and cost benefits of 765kV.
• Highlighted reduced right-of-way and structure benefits for 765kV lines compared to equivalent capacity 345kV options.

▶️ Cornelius Henderson, Burns & McDonnell

BurnsMcDonnell-PUCT-P55718.pdf

• Presented risk model analysis comparing 765kV to 345kV line construction using a risk management framework.
• Emphasized the potential for reduced construction risk, cost benefits, and schedule efficiency with 765kV lines.
• Quantified various risk components in line construction, substations, and infrastructure development.

▶️ Presentations Q&A

• Megan Griffiths from the Permian Basin Petroleum Association emphasized the need for rapid infrastructure build-out in the Permian region, expressing neutrality on voltage but concern about delays.
• Discussion revolved around the procurement process for transmission slots, especially comparing the differences between 345 kV and 765 kV capacities.
• Jason Neal from HICO and Tony Zito from Siemens Energy addressed details of slot interchangeability, lead times, and project scheduling.
• Concerns about potential delays and material procurement processes were expressed by various participants.
• The issue of standardization across equipment and practices for interoperability and efficiency was raised repeatedly.
• The panel discussed the complexities of line routing, design, and right-of-way acquisition, with input from transmission line designers and other stakeholders.
• The impact of potential tariffs, cost escalation, and other financial risks were brought up as factors that need careful consideration in project planning.
• Reliability of equipment at different voltages was affirmed, with emphasis on testing and standardization to improve system resilience.
• Stakeholders raised concerns about infrastructure and logistical challenges specific to Texas and the Permian Basin, urging detailed planning to avoid delays.
• The session closed with calls for further discussion and input from the Transmission Service Providers (TSPs) scheduled for later in the day.

Part 3 - Q&A

▶️3 - Q&A

• Participants were invited to ask questions throughout the session rather than wait until the end.
• Discussion on the current dollar per mile estimates for transmission and the need for updated figures.
• ERCOT has been asked to provide updated estimates for March during the session.
• Consumer groups expressed the importance of sharing confidential information with decision-makers to validate timeline and cost numbers.
• Discussion on the importance of detailed design in placing equipment orders and when orders can be placed.
• Supply chain concerns were raised, particularly about substations versus towers.
• Transmission Service Providers (TSPs) reassured collaboration on planning and forecasting to vendors.
• Challenges with early-stage project estimates and vendor responsiveness regarding equipment availability were discussed.
• Interchangeability of slots for 345kV and 765kV equipment was confirmed for different TSPs.
• Discussion on common and import projects and whether slots with vendors are specific or general.
• Acknowledgment that the cost per line mile varies based on the number of turning structures required.
• Confirmation that all discussed projects are in addition to existing infrastructure efforts.

▶️3.1 - Question 1

• AEP Texas provided a cost estimate of $5,800,000 per mile for the Solstice to Howard transmission line, which includes $5.4 million for construction and the rest for right of way.
• The terrain is challenging, affecting the overall cost estimate.
• Discussed uncertainties comparing 345 kV and 765 kV infrastructure, focusing on transmission line and station scope.
• Construction materials like steel, aluminum, and concrete have similar volume requirements for both 765 kV and 345 kV setups, with slight differences in conductor and concrete usage.
• Highlighted the need for long lead time materials for 765 kV due to new voltage requirements.
• ERCOT's cost estimate of $6,100,000 per mile, derived from MISO guidelines, is considered reasonable, with a 20% route adder factored in.
• The collaboration between LCRA and Oncor for the 765 kV project has been beneficial, and they are addressing vendor consultations to improve estimates.
• The exercise for LCRA included looking at 765 kV cost estimates and revising assumptions for a more accurate scope.
• CPS Energy and AEP confirmed that the range of cost estimates aligns with their expectations based on evaluations.
• Commitment towards project completion by 2030/2031 was acknowledged.

▶️3.2 - Question 2

• Overall consensus was that MISO's guide is a robust and reasonable estimate, though some specifics differ project by project.
• Transmission line costs are about 85% of the total program, with station costs being approximately 15% according to ERCOT estimates.
• Some cost differences arise from specific items like station equipment and assumptions in cost applications.
• Key cost factors include the need for additional equipment such as auto transformer banks and shunt reactors which are not accounted for in the basic MISO estimates.
• The MISO guide is seen as a good baseline for cost estimates despite minor variability based on unique project conditions.
• Certain components of the guide align well with familiar standards like the 69 kV, 138 kV, and 345 kV lines.
• CPS Energy acknowledges some variability in station costs due to less clear scope definition but overall agrees with the cost estimates.
• No follow-up questions were raised by meeting participants.

▶️3.3 - Question 3

• Labor required to build 765 kV infrastructure is similar to that for 345 kV, with no significant additional challenges.
• No extra training or certifications are needed; tasks are similar between the two voltages.
• Primary difference lies in conductor stringing activities which may require different equipment.
• Labor resource challenges exist due to statewide growth, not specific to voltage differences.
• Construction timeline for these projects begins in 2027 after administrative processes in 2026.
• Available capacity and resources from vendors are adequate; engagements with them are ongoing.
• Building 765 kV lines requires about 20% more labor compared to a 345 kV double circuit.
• Building multiple 345 kV lines versus a single 765 kV line could require more labor overall.
• Labor challenges are more related to the number of circuits rather than voltage specifics.

▶️3.4 - Question 4

• No new or recent risks outside the control of TSPs differentiate 765 kb or 345 kV infrastructure build outs.
• Tariffs and labor are equally impactful to both build outs.
• Supply chain concerns exist regarding tariffs but do not set the two apart.
• No reasonably anticipated or identified risks at this time that favor one build out over the other.
• No questions or objections raised by TSPs.

▶️3.5 - Question 5

• Discussion on whether all TSPs should use voluntary uniform design and construction standards for the 765 kV infrastructure in the Permian Basin.
• Advantages of standardization include benefits from manufacturing efficiencies, consistent ratings and interchangeability of equipment, and facilitation of planning and operations.
• Emphasis on not being too rigid with standardization to allow some customization based on engineering needs, project-specific requirements, and existing vendor relationships.
• AEP has extended its experience and standards in 765 kV to aid other providers, which helps accelerate the process.
• Various standards such as NEMA, NC, and IEEE are generally followed in the industry, promoting compatibility.
• Concerns about being too prescriptive with standardization, as it could add time and cost to projects.
• CPS Energy, LCRA, and other stakeholders agree on the importance of standardization but stress the need for flexibility.
• Continuous collaboration among TSPs, such as Oncor, LCRA, and AEP, is occurring organically to develop best practices without imposing additional mandatory requirements.
• New TSPs using 765 kV rely on the expertise of AEP and others who have extensive experience, employing consultants where needed to address site-specific customization requirements.
• Long lead time major equipment procurement is generally independent of specific substation designs.
• Interconnection of systems at different voltage levels requires coordination to avoid bottlenecks, but existing agreements and practices facilitate this.

▶️3.6 - Question 6

• Discussed the operational resiliency benefits of 765 kV infrastructure vs. 345 kV during extreme disruption events, referencing the 2003 Northeast blackout as a key example.
• Highlighted the 765 kV system's ability to absorb outages like a shock absorber adding stability.
• Introduced examples of 765 kV's adaptability, such as significant reverse power flows seen in the Upper Midwest during extreme weather conditions.
• Discussed a recent West Virginia project where a newly completed 765kV line improved operational flexibility by allowing the retirement of surplus operating procedures.
• Addressed concerns about reliability and resiliency with fewer 765 kV lines compared to more 345 kV lines, assuring that contingency plans account for potential weaknesses.
• Acknowledged vendor experience and mutual aid as factors in managing system restoration and resiliency, emphasizing spare equipment strategy for 765 kV systems.
• Discussed the potential need for coordination and holistic planning in expanding 765 kV networks, comparing it to an interstate system development.
• Highlighted discussions about legislative guidance and rulemaking on regional planning, examining how broader analysis can aid in smart expansion.
• Explored perspectives on cost, timeline, and planning elements for 765 kV vs 345 kV, emphasizing customer commitments and long-term state benefits.
• Discussed the need to align 765 kV builds with generation and load signals, affirming an interconnected approach for maximizing new infrastructure.

▶️3.7 - Question 7

• Discussion on the rules for interconnecting at 345 kV and the possibility of moving to a 765 kV voltage class.
• The importance of obtaining clarity from the commission regarding the expectation to interconnect both generation and load at 765 kV.
• Oncor suggests limiting 765 kV interconnections initially to utility-to-utility only.
• Concerns about new inverter-based loads creating challenges for grid operations.
• Suggestion to defer wider 765 kV customer and generator interconnections until more experience is gained.
• Discussion on open access transmission system and its implications for competition.
• Need for a potential rulemaking or understanding to address 765 kV interconnections.
• Proposal of a moratorium on new interconnections at 765 kV until further operational study.
• Acknowledgment that Oncor tariffs have historically included similar limitations.
• CenterPoint Energy supports exploring broader discussions beyond just the Permian Basin.
• ERCOT to file public reports comparing TSP costs with MISO, delaying another workshop unless necessary.
• Emphasis on using open meetings as platforms for further discussions if needed.