At a Time When Texas Electricity Is Scarce, Does It Make Sense To Export It To Mexico?

Categories: Biz

A company that supplies electricity to Texans called American Electric Power filed to renew its application to export electricity to Mexico with the U.S. Department of Energy back in December.

It operates a 720-megawatt coal-fired power plant near Vernon, and apparently it has been supplying our southern neighbor with electricity for quite some time. In 2011, for example, AEP supplied the country with some 78,000 megawatt-hours (A megawatt-hour can power 1,000 homes for one hour).

Normally, AEP's renewal application would probably get rubberstamped. But not today.

The Sierra Club is putting up a fight, and asking some valid questions: Namely, at a time when Texas's grid operator says we won't have enough electricity to meet peak demand by 2013, why should companies be allowed to export this precious commodity?

There's no easy answer. As Sierra Club notes in its opposition to the permit, both AEP and ERCOT have argued in federal court that new EPA regs should be blocked because they would imperil the reliability of the grid by forcing coal-fired power plants to shut down. So: "How much electric energy did AEP-EP ship to Mexico in the summer of 2011 when the grid in Texas may have been on the brink of failure?" Sierra Club asks. And why, then, doesn't electricity's export also sap grid reliability?

In its response, ERCOT toed a fine line, careful not to be seen as opposing AEP's bid, but noting that it can halt exports if Texas's electrical system gets taxed. Spokesperson Dottie Roark tells Unfair Park that Texas can also import electricity from Mexico. But wouldn't much of Mexico's weather correspond with ours? Meaning: Wouldn't heat waves drive demand in Texas and Mexico at roughly the same times?

Roark says we imported electricity from Mexico during the August heat wave and the February freeze of 2011. AEP says the relationship is mutually beneficial.

Even if you take at face value ERCOT's and AEP's assertions that exporting electricity will never endanger grid reliability, what of the environmental impacts? Electricity generation, like other forms of industry, externalizes the cost of pollution, especially in Texas. By exporting electricity -- to the extent it's coal-fired -- we still get the billowing plumes from smokestacks, but none of the product, Sierra Club points out.

Weigh in, you uncommonly well-versed Friends of Unfair Park! Does this contradict the proclamations of calamity surrounding the EPA regs currently stayed by the U.S. Court of Appeals for the D.C. Circuit?

If you're interested in real-time data from ERCOT on Texas electricity imports and exports, check this. If the DC Tie Flow is positive, that means we're exporting power.

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When the MCP raises, like it did last August, exports stop and imports start. Not a clue what Hargrove is digging at.  


Of course the Sierra Club is toeing a fine line as well.  The Sierra Club wants the plant shut down entirely because it's coal fired, but it complains to the Department of Energy to look at whether it should allow exports because the electricity supplied by the coal fired plant is needed in North Texas.  Neither side wins points for honesty in my book.      


Really appreciate the upgrading in coverage on these kinds of stories. Thanks. 


In an emergency, any exports (to Mexico or to Oklahoma) on the DC ties are cut.

Besides, with a system-wide price cap of $3,000/MWh, as much power as can flow will be coming into Texas when there is extreme weather.


In the grand scheme of things, 462 MW exported is barely 1.5% of total online generation.  It isn't being used for system stability as it is being converted to DC.

What we don't know is how much of the generating station capacity from the Oklaunion plant is being transmitted to Mexico.  The total amount of energy that the plant can produce at 100% output at a 95% utilization rate is about 5.9 million MWHr.  So 78,000 MWHr is only 1.3% of their total production.

Nevertheless, it is one of those things that just doesn't look good, much like the photograph of Donna Rice sitting on Gary Hart's lap while on the good ship "Monkey Business".

It is taking up a slight bit of the excess of capacity over demand, but that doesn't amount to very much of the excess capacity over demand.

The interesting thing is that the power AEP is selling is having to be transported and potentially wheeled some 500+ miles to one of the DC interties with Mexico.


Hey, so long as AEP can make a big fat profit, who are we too complain?Corporations are people, my friend. They gotta eat!

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