Oncor, Texas’ largest transmission and distribution utility, said it has reached a settlement in principle regarding a resiliency plan filed in May, which includes nearly $3 billion of potential capital investments.
Subject to documentation and approval of the settlement by the Public Utility Commission of Texas, Oncor expects to begin implementing the resiliency plan in the fourth quarter of this year.
Broad expansion and load growth across the service territory of Oncor continues driving new investment opportunities, the company said. In addition to building new energy infrastructure to meet demand related to artificial intelligence and data centers, load growth is also coming from a wide range of industries across the state, including new and expanded commercial and industrial facilities, electrification of oil and gas operations, manufacturing, and residential.
At the end of the second quarter of 2024, Oncor had 814 active generation and large commercial and industrial transmission point-of-interconnection requests in its queue, representing a 13% year-over-year increase. Oncor placed 25 load-serving substation projects and 175 circuit miles of new or upgraded high-voltage transmission lines in service in the second quarter of 2024, outpacing the 9 load-serving substations and 24 circuit miles placed into service in the first quarter.
What’s in the plan?
Oncor said it has identified key resiliency measures and the investments needed to help proactively address potential outage causes, reduce outage minutes and better serve customers, including wildfire risk mitigation, the security of the grid, vegetation management and the expanded deployment of smart grid technologies.
If approved, Oncor’s plan would include:
- Overhead and underground resiliency and modernization – Approximately $1.830 billion to modernize and harden overhead systems (poles, crossarms, lightning protection and capacity) and underground systems (cable injection/replacement and switchgear automation).
- Continued optimization of distribution automation – Approximately $510 million to enable, expand and optimize distribution automation through new ties, capacity and intelligent switches. Distribution automation includes the use of various smart equipment that sense power flow, redistribute load, identify faults and in some cases, restore power automatically.
- Expanded vegetation management – Approximately $285 million to expand the existing vegetation management program, and leverage remote-sensing capabilities such as satellite and laser imaging, detection and ranging.
- Enhanced cybersecurity risk mitigation – Approximately $525 million to enhance cybersecurity risk mitigation, enhance and secure Oncor’s digital backbone infrastructure and other measures.
- Improved physical security – Approximately $80 million to improve physical security, including remote asset monitoring and other protection.
- Enhanced wildfire mitigation – Approximately $900 million to enhance wildfire mitigation efforts, including $182 million in specific wildfire mitigation measures. The total investment includes the implementation of overheard resiliency and modernization, enhanced vegetation management and expanded distribution automation measures in areas at the highest risk for wildfires. The SRP offers Oncor an opportunity to advance wildfire mitigation strategies through additional investments in fire safe device deployment, advanced wildfire risk modeling, and strengthening, modernization and protection of assets in wildfire mitigation zones.
Storms keep wrecking Houston’s power lines. Will undergrounding help?
Undergrounding powerlines is a resiliency tactic employed by transmission and distribution utilities across the country, particularly in areas that experience frequent extreme weather events or wildfires. But the practice comes at a cost: in California, undergrounding a distribution line is 10 times more expensive than building a new overhead line, while a buried transmission line can be 6-10 times more expensive.
CenterPoint has faced the brunt of criticism from Texas leaders and residents due to prolonged outages caused by Hurricane Beryl. Around 2 million of the utility’s 2.6 million customers in Houston lost power. Both CenterPoint’s preparation and the resiliency of its power grid have been called into question with some suggesting power lines should be buried in such an extreme-weather-prone region such as Southeast Texas.
Existing distribution lines, however, are especially cumbersome and expensive to bury due to existing pipes and cables that exist beneath the surface. Undergrounding of transmission lines is a last resort, again, due to exorbitant costs and effective alternatives (transmission lines are typically only buried in dense urban areas).
Utilities are using Hurricane Beryl’s impacts to demonstrate the value of resiliency. CenterPoint, AEP Texas, and Entergy Texas each pointed out their pending resiliency fillings while addressing regulators on storm recovery efforts.
