Texas law banning new transmission companies could violate US Constitution

The United States Court of Appeals for the Fifth Circuit ordered a lower court to allow previously rejected testimony in a lawsuit against the Public Utility Commission.

AUSTIN, Texas — A 2019 Texas law regulating power transmission projects could violate the Commerce Clause of the U.S. Constitution, according to a federal ruling.

NextEra Energy sued Texas over a 2019 law banning new transmission companies in the state.

Transmission lines send power over long distances. This is how remote power plants and wind farms can power homes in central Texas.

NextEra has won a tender for the construction of the Hartburg-Sabine transmission line. The line would carry power between Hartburg, Texas, and Sabine, West Virginia.

In 2019, lawmakers stopped the project by passing Senate Bill 1938. SB 1938 prohibits new transmission companies from building in Texas.

“SB 1938 will codify the existing process in Texas for determining the appropriate party to build critical energy infrastructure, maintain Texas rate jurisdiction over transmission in non-ERCOT areas of Texas, and clean up the statutory remnants of the Competitive Renewable Energy Area (CREZ) buildout,” the statement of intent reads.

CREZ connects wind power from West Texas to cities in Central and North Texas.

“Electric utilities in Texas have established geographic footprints, and this bill would provide geographic continuity to the system in a way that further facilitates reliability,” the author/sponsor’s state of intent states. of SB 1938.

“SB 1938’s Texas-only incumbent protection policy resembles the Texas-only power policy seen in the ERCOT region, which resulted in catastrophic power outages and an energy crisis that could arise elsewhere if SB 1938 is allowed to impact interstate projects,” NextEra court documents show.

Most of Texas is on its own electrical grid operated by the Electric Reliability Council of Texas (ERCOT).

Three other interconnections operate within the state.

Southwest Power Pool (SPP) covers most of the Texas Panhandle. The Western Electricity Coordinating Council (WECC) connects El Paso to the western half of the United States. Part of East Texas uses the Midcontinent Independent System Operator (MISO) network.

NextEra’s transmission line would be built in Texas, but outside of the ERCOT market and would not impact the Texas independent network.

RELATED: “These are our homes. It is our land. | How Texas Electricity Regulators Must Balance Landowner Rights and the Public Interest

Because the project crosses state lines, NextEra argues that SB 1938 violates the Commerce Clause of the US Constitution.

“SB 1938 prevents the identification and construction of necessary transmission lines that would improve the resiliency and reliability of interstate power grids,” NextEra’s court filing reads.

The Fifth Circuit Court of Appeals issued judgment on Wednesday.

“What is true for liquor and milk under the dormant Commerce Clause must be true for the transmission of electricity,” the court’s opinion reads.

The Court ordered the trial court to reconsider the case.

“Imagine if Texas – a state that prides itself on promoting free enterprise – passed a law stating that only those who own existing oil wells in the state could drill new ones. That would be hard to believe,” says the opinion of the court.

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