Dive Brief:

• The Public Utilities Commission of Texas will hold public meetings on Jan. 17 and 18 to consider the city of Lubbock's bid to connect its municipal utility to the grid serving most of the state, and leave the Southwest Power Pool.
• Lubbock officials say joining the Electric Reliability Council of Texas will give consumers access to more efficient and cost-effective generation and will avoid the need to build a power plant with costs estimated from $350 to $700 million.
• The Austin American-Statesman reports if Lubbock is allowed to shift its membership, it would likely be effective in 2021 and would be the largest change since the Texas electricity markets were restructured in 1999. Large manufacturers are wary of the change, however, because of potential exit fees and the cost to build new transmission.

Dive Insight:

Large manufacturers on Lubbock's system are concerned about the city's possible move to ERCOT: The grid operator for most of Texas says new transmission to connect the city could cost up to $360 million, and Xcel Energy, which supplies Lubbock's actual power, wants $165 million for investments it has already made.

So far, Texas Industrial Energy Consumers — a trade group for about 50 of the largest energy users in the state — has said it doesn't oppose the move if a hold-harmless provision insures they won't pay for new transmission for five years.

​Tony Bennett, president of the Texas Association of Manufacturers, told the American-Statesman his organization is watching the issue closely. For its largest members, "even small changes in [electric] rates have to be watched very closely."

Lubbock announced the plan to move to ERCOT in 2015, with an initial goal of making that shift in 2019.

If LP&L is allowed to make the shift, the utility will build additional infrastructure to connect the system, but some of that infrastructure is included in its existing long-term capital improvement plan, the utility explains on its web site. Additional transmission lines and substations will be studied as part of the PUC's review.

Among the advantages, Lubbock said it will diversify its energy portfolio and provide affordable power.

The shift "eliminates the need to build an expensive power plant with estimated costs ranging from $350 to $700 million," and "provides access to 550 generation units and over 1,100 active market participants that generate, sell, or transmit wholesale electricity," says the utility website explaining its proposal.

The move into ERCOT will also cut Lubbock's wholesale power costs by eliminating expensive fixed capacity charges, and would provide access to West Texas wind energy along with natural gas, solar and coal.