Everything you need to know about why LP&L is switching to ERCOT



LUBBOCK, TX—To understand why Lubbock is moving from the Southwest Power Pool electric grid over to the Electric Reliability Council of Texas, or ERCOT grid, there is 17 years worth of history to take into perspective.

Currently Lubbock Power & Light buys all its power from Xcel Energy– which is connected to the Southwest Power Pool.

2004 was the last time LP&L signed a contract with Xcel that was set to expire in 2019. In those 15 years, LP&L began to take a look to see if staying in the Southwest Power Pool was the best thing for Lubbock.

But at the very core of this switch was the decision of whether or not to build a power plant in Lubbock, a requirement in order for Lubbock to stay with the SPP.

“So the leadership over about 10 years took a look at different variations for building a power plant for Lubbock and unfortunately those efforts failed along the way,” said Spokesperson for LP&L Matt Rose. 

But building a power plant could have cost around $750 million, and that means there would have been rate increases for the next 30-40 years.  

10 years after LP&L signed a contract with Xcel to buy all wholesale power from them, a new administration took over LP&L.

It was then that they decided to change their approach on whether or not to build a power plant and see what other solutions there were for Lubbock. 

“Instead of saying let’s put a request for a proposal, or an RFP, out on the streets, saying give us an option of how to build a power plant. Instead we took a broader approach and said give us a solution for how you can provide us with x amount of megawatts,” said Rose. 

While ERCOT wasn’t originally a solution to this problem, ERCOT became a possible answer because of improvements made to their grid.

“In the ten years prior to 2014 about 6 and a half billion dollars of transmission lines had been built right up to our neighborhood to allow them to capture the renewable energy in the region and bring it back down to the metroplex,” said Rose. 

Ultimately the decision came down to what would be better for LP&L customers.

“What we found over and over and over again is that the solutions in ERCOT were far more attractive than the solutions in the Southwest Power Pool,” Rose said.  

But figuring out how to move an entire city to the ERCOT grid was a challenge for ERCOT as well. 

“It was a new discussion for everyone in the room and there were a lot of detailed technical considerations that had to get addressed. There were conversations about what infrastructure had been planned for the City of Lubbock, and conversation about what new infrastructure would be needed to connect Lubbock to the ERCOT grid,” said Senior Director for System Planning at ERCOT, Warren Lasher.

In order to switch, LP&L built 150 miles of new transmission lines to connect to the existing ERCOT lines. And to improve our system they upgraded their substations and installed smart meters across town. The new access to ERCOT will also allow for diversification of energy supply.

“Those units are going to be more solidly connected into the ERCOT region, meaning there will be new transmission lines that connect them to the ERCOT region. They are going to have additional reliability as well as there is a lot of wind generation out in the panhandle and those facilities will have an improved connection into the ERCOT grid,” said Lasher. 

But as far as the switch goes, customers shouldn’t notice a difference at all. 

“They should expect to see no difference at all, “ said Lasher. “We’re hoping it’s just a behind the scenes thing.”

This switch next week only affects 70% of LP&L customers right now, the other 30% will be switched in the coming years. According to LP&L, the switch could also allow competition between power companies to return to Lubbock, but only once 100% of the grid is switched over.

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