Texas Commission Approves Permian Basin Reliability Plan

The Public Utility Commission of Texas on Sep. 27 approved a reliability plan for the Permian Basin Region to address the future electricity requirements of the area. The plan provides a comprehensive overview of required transmission upgrades to existing and new transmission lines that would help meet increasing electricity demand. The decision also details next steps including instructions to transmission companies involved in the infrastructure construction and oversight of the plan’s completion.

The Electric Reliability Council of Texas (ERCOT) submitted the final draft of the Permian Basin Region Reliability Plan in July 2024 as required by House Bill 5066 passed last May. The legislation calls for a reliability plan that must provide information on three key areas: extension of transmission service into areas where mineral resources have been found, increasing available capacity to meet forecasted load, and providing available infrastructure to reduce interconnection times in areas without access to transmission service.

The reliability plan report from ERCOT details information about current and future electricity demand growth. The total electricity demand in the Permian Basin region that the grid operator has modeled in its studies is about 23.7 gigawatts (GW) in 2030 and 26.4 GW in 2038. Based on these forecasts, ERCOT has split the transmission required into two categories: new projects and upgrades to improve local transmission service and import paths needed to transport power into the Permian Basin.

The report indicates that a significant contributor toward an increased electricity demand is the development of oil and gas assets, and this demand will grow further in the next 15 years. The report draws on a 2022 forecast, which projected growth in peak oil-and-gas-related demand of nearly 12 GW in 2030 and 14.7 GW in 2039, reflecting an expectation of a material expansion of oil and gas development in the region.                    However, the report also stated that areas outside of oil and gas-rich zones will also experience increased electricity demand in the next decade. Much of this electricity consumption would come from cryptocurrency mining operations, data centers, and hydrogen electrolysis facilities.

ERCOT estimates that the total cost of local transmission upgrades will be just over $9 billion in 2030. For 2038, the total cost estimate ranges from $13 billion to $14 billion, depending on the import path chosen.