GP&L Participates in Important, New Transmission Project

The Southern Cross Project is being spearheaded by Pattern Energy Group LP (Pattern). The transmission facilities built for this project will be used to deliver excess wind energy generated in Texas to utilities in the southeastern United States. The project will also increase reliability within ERCOT because power can also flow into Texas.

Unlike Texas, the southeast does not have the favorable wind patterns and geography for efficient wind power generation. While supporting the wind generation industry in Texas, the Southern Cross Project will deliver renewable energy to consumers in the east with a new high voltage direct current (HVDC) transmission tie of up to 3000 MW.

The amount of power that can be exported or imported into Texas through the new transmission facilities will be three times more than exists currently. The ability to import electricity into the state will be especially important if the Texas grid is running short of power, or if electricity can be procured at favorable prices outside of the state.

"The fact that Pattern approached GP&L to participate in this important project is an indicator of how well GP&L is respected as a utility," said Electric Utility Director Ray Schwertner. "It also affirms that groups know GP&L is open to evaluating non-traditional opportunities to bring in revenue for the utility," he added.

Participation in Pattern's project will help GP&L in its goal of maintaining competitive electric rates. The revenues GP&L will earn will help offset increased costs for fuel, operations, capital investment and debt service that are anticipated in the coming years.

GP&L "fits the bill" for its part in the project. First, it meets one of the project's requirements for a vertically integrated utility by having power generation, a transmission and delivery system, and serving load. Second, GP&L is one of only 14 NERC Transmission Operators within ERCOT, and will operate the substation at the Texas/Louisiana border and the 30 miles of transmission line leading to it. GP&L will earn revenues by operating and maintaining the facilities and from consulting fees. The utility will be reimbursed by Pattern for actual maintenance expenses.

The project is currently awaiting two orders from FERC, one of which will officially direct GP&L to interconnect transmission facilities with the Southern Cross Project. Pattern will build these facilities and sell them to GP&L at the time the system is energized in 2015. Construction will begin in 2014.

Schwertner credits GP&L's Regulatory & Compliance Director David Grubbs and the Garland City Attorney's office for their outstanding work on completing the contract agreements with Pattern.