The chairman of the agency that regulates Texas utilities wants two of the state’s biggest proposed power lines sent back to the judges who just recommended rejecting them — a step that would keep the projects alive but push a decision months further out for landowners across 23 counties.
Thomas J. Gleeson, chairman of the Public Utility Commission of Texas, filed a memorandum at 2:17 p.m. Sept. 9 telling his four fellow commissioners that they should not act yet on the recommendation in front of them. “At this time, I believe it is premature to address whether the recommendations in the PFD should be acted on,” he wrote, referring to the proposal for decision — the written recommendation that state administrative law judges issue after a contested hearing. “Instead, for the reasons outlined below, I believe we need to remand this proceeding to SOAH for further processing.” A remand sends the case back to the State Office of Administrative Hearings, where the judges sit.
Both lines would carry 765,000 volts, the highest-capacity design built anywhere in the country and one Texas has never used. Together they form what the industry calls Import Path 2, a route meant to move electricity into the booming Permian Basin oil field. Docket 59182 covers the Big Hill Substation to the Sand Lake Switch, crossing Crane, Crockett, Irion, Pecos, Reagan, Reeves, Schleicher, Tom Green, Upton and Ward counties. Docket 59475 covers the Bell County East Switch to Big Hill, crossing Bell, Burnet, Concho, Coryell, Lampasas, Llano, Mason, McCulloch, Menard, Milam, Mills, San Saba, Schleicher, Tom Green and Williamson counties. Oncor Electric Delivery Company and LCRA Transmission Services Corporation want state permission to build both.
On Aug. 20 the judges recommended denying both projects, finding the companies had not proved the lines were needed. Each case carries its own price. In the Bell County case the judges put the line at “approximately 214 to 244 miles in length depending on the route” and its cost at between $1.64 billion and $1.86 billion, plus $395 million of work at the substations. In the Big Hill-to-Sand Lake case they put the routes at $1.21 billion to $1.36 billion, plus $382 million of station work at Sand Lake and $527 million at Big Hill.
In the Bell County case alone, the judges also found the companies had “deprived approximately 1,400 landowners, to their prejudice, of the process due them” under the commission’s rule requiring a public meeting before an application is filed, and had given only “about two-thirds of affected property owners entitled to notice” any chance to weigh in on where the line should go. Oncor and LCRA have disputed all of it, telling the commission on Sept. 9 that the planning record “confirms, rather than undermines, the need for the Import Path 2 Projects.”
Gleeson’s objection is not to the judges’ conclusion but to what their recommendation leaves out. The commission sent the case to them March 30 with 21 questions; two came back unanswered. The first asks whether the lines are necessary to meet state or federal reliability standards. The judges wrote only that the companies “present the Project as one that will import power from across the state of Texas into the Permian Basin and not that the proposed facilities necessary to meet state or federal reliability standards.” That, Gleeson wrote, “is not responsive,” because the question asks whether the lines “are in fact necessary” to meet those standards, “not how the applicants characterize the project.”
The distinction carries real money. Under commission rules a line must justify itself either as an economic project, by showing it will save consumers more than it costs, or as a reliability project — one “necessary to meet state or federal reliability standards.” The judges recommended treating these lines as reliability projects without identifying which standards were at stake, which Gleeson called “puzzling.” He wants them to name the specific North American Electric Reliability Corporation standards at issue, and says the commission “should not make a final decision on need” without that answer.
The second unanswered question is what the lines would save ordinary customers by easing congestion on the grid. The judges said that analysis applies only to economic projects and that the companies submitted no evidence on it. Gleeson wrote that the question survives regardless: if the lines fail as reliability projects, “the question remains of whether need was demonstrated as an economic project.”
Both sides filed their final written arguments the same afternoon, and both dug in. Oncor and LCRA told the commission that “the PFD recommends denial of the Import Path 2 Projects. Applicants strongly disagree with this recommendation and urge the Public Utility Commission of Texas (‘Commission’) to reject it,” arguing the lines “are necessary to address critical reliability needs in the Permian Basin region, have been recommended by ERCOT, and were mandated by the Texas Legislature through House Bill 5066.” The companies also argued the commission owes the judges no deference at all, because the Legislature authorized it to “assume an original fact-finding role” and to “substitute its judgment for the ALJ’s on questions of fact” — an argument for deciding the case now rather than sending it back.
American Stewards of Liberty, a property-rights group taking part in the case on behalf of landowners in the path, said the opposite: it “agrees with the PFD’s analysis, findings and conclusions that Applicants failed to carry their burden,” and added that the companies “failed as a matter of law to comply with the notice requirements” in the Bell County case. Landowners along the eastern route had asked to argue in person before the commissioners this week.
There is a fresh precedent for the commission taking the opposite course. On Aug. 28 it approved the state’s first two 765,000-volt lines — a different pair, on a different import path, running 424 miles across 30 counties from near Glen Rose out to the New Mexico line at a cost of about $3.9 billion. Rather than send those cases back to the judges, the commission deleted findings in the larger of the two that Oncor had failed to give roughly 1,650 landowners the public-meeting notice the rules require, holding that one meeting before an application is filed is all the rule demands.
Gleeson wrote then that the judges’ recommendation “contains some incorrect statements about the law, which conflict with Commission precedent.” Two weeks later he is proposing the reverse: not to substitute the commission’s judgment for the judges’, but to send them back to work.
They will not get that chance yet. Because he favors a remand, Gleeson wrote, hearing argument now “would be premature” — though “I still commit to granting oral argument in this case before any final decisions are made.” Commission staff notified the parties Sept. 9 that none would be heard. The commissioners take up both cases at their open meeting at 9:30 a.m. Sept. 11.