ERCOT plans to connect to other southern power grids but will not have to sacrifice its independence from federal regulations

Federal regulations do not apply to direct current (DC) interconnections.

Source: Texas Nationalist Movement

The Texas electric grid is infamous for being the only power grid in the U.S. that is not subject to federal regulations. Many have longed for the moment when Texas would decide or be forced to give up its independence and interconnect with other U.S. grids.

For a brief moment recently, some thought that moment had come. Last week, four new federal power grid projects were announced, one of which, the “Southern Spirit Transmission” project, proposes to connect ERCOT to Southeast power grids, including Midcontinent Independent System Operator South (MISO-S) and Southern Company (SOCO). DOE said the power line would run for 320 miles across Mississippi, Louisiana, and Texas and will have a capacity of 3,000 megawatts (MW), enough to power about 600,000 homes:

Southern Spirit will construct a new 320-mile HVDC line connecting the Electric Reliability Council of Texas (ERCOT) grid for the first time with electric grids in the southeastern U.S. power markets, including Midcontinent Independent System Operator South (MISO-S) and Southern Company (SOCO), which will enhance reliability and prevent outages during extreme weather events, like Winter Storm Uri that hit Texas in 2022. This line across Texas, Louisiana, and Mississippi will provide 3,000 MW of bidirectional capacity and create 850 construction jobs and 305 permanent operations jobs. (up to $360 million potential contract value) 

According to the publication Texas publication “The Hayride:”

About as soon as the news hit of four new federal connectivity projects, those wanting to put an end to the Lone Star State’s famously independent power grid status began to pop the champagne cork. Those who have been beating on three-decades-and-running Texas Republican leadership for recent power outages wasted no time praising President Joe Biden for the departmental announcement. It’s especially tempting with just one month to go before the November presidential election, with Democrats eager to dunk on the GOP as much as they can.

A few headlines in Texas publications captured the temporary euphoria:

𝐈𝐭’𝐬 𝐀𝐛𝐨𝐮𝐭𝐓𝐢𝐦𝐞!! Texas to get connected to the national grid via federal grant. https://t.co/xoUq4pNkQQ

Greetings from the Lone Star State. Hell hath frozen over. Alleluia, alleluia, alleluia.https://t.co/Rcn9MAXhP9

Neil Alan Willard (@neilwillard) October 4, 2024

As it turns out, hell hasn’t frozen over because the Federal Energy Regulatory Commission regulates alternating current (AC), not direct current (DC) electricity. According to Public Utility Commission of Texas Chairman Thomas Gleeson, this means that ERCOT will remain exempt from federal regulations even if it connects to other power grids through the Southern Spirit Transmission Line:

PUCT Chairman Gleeson’s statement that this new interconnection will not lead to federal oversight of ERCOT because “there are already similar direct current ties in Texas, and they do not have any impact on the independence of the Texas grid” refers to the DC ties that Texas has long maintained with neighboring grids in North Texas, East Texas, and West Texas. Since the electricity that flows through these ties is direct current, not alternating current, it is not subject to federal regulations. The same exception will not apply to ERCOT if it interconnects with the Southern Spirit Transmission system.

These rules will also protect ERCOT from FERC regulations because the Southern Spirit high-voltage line transports direct current, not alternative current. The VSC HVDC technology is short for “variable source converter, high-voltage direct current.” The basic technology was developed in the late 1880s to make long-distance transmission of direct current feasible. It has been used worldwide but not in the United States (See “The War of the Currents: A.C. vs. D.C. power).

The Southern Spirit system has been in the works for more than a decade, but opposition from landowners and lawmakers in Louisiana and Mississippi held up the project. It got a boost on August 14, 2024, when the Louisiana Public Service Commission (LPSC) exercised its power to step in and facilitate the permitting process. This no doubt means that the LPSC will “facilitate” the process by imposing imminent domain.

My take: The English proverb “There’s many a slip ’twixt the cup and the lip” applies here. Even with the State of Louisiana exerting its power to facilitate the construction of the Southern Spirit system, plenty of legal and technical barriers will stand in the way of ERCOT interconnecting with southeastern power grids.

Nevertheless, the VSC-HVDC technology is interesting because it paves the way for ERCOT to interconnect with other U.S. power grids while maintaining its immunity from federal regulations. There will no doubt be more legal challenges for this project, so this interconnection between ERCOT and other U.S. grids is far from a done deal.

If the project moves forward, it will be a good deal for Texas and the rest of the country. It will be interesting to watch.

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