LUBBOCK, Texas (KCBD) – Lubbock Power and Light is set to begin receiving its full transmission revenue in January 2027, marking the end of a five-year period during which the utility withheld a portion of those funds to offset costs for ERCOT ratepayers statewide.<\/p>\n
Discussions about LP&L joining the Electric Reliability Council of Texas grid began in 2015. At that time, studies found that while LP&L and Southwest Power Pool customers would benefit financially from the move, the transition carried a small added cost for ERCOT customers across Texas. That cost stemmed from the construction of 160 miles of new high-voltage transmission lines needed to connect to the grid.<\/p>\n
Five years of cost-sharing<\/p>\n
To address that impact, ERCOT withheld $110 million in transmission revenue from LP&L over five years \u2014 roughly $22 million per year since 2022. LP&L representative Matt Rose said the arrangement was a condition of joining the grid.<\/p>\n
\u201cWhen they looked at that total project, and they looked at the transmission lines that we would be building and owning, and therefore earning revenue off of, they said, Lubbock, in this process, you need to do something to hold harmless all the rate payers in ERCOT from the effects of your move,\u201d Rose said.<\/p>\n
That obligation ends in January 2027, when the full revenue stream returns to LP&L.<\/p>\n
\u201cThe entire plan of moving to ERCOT was one that would lower costs for us because we would be more efficient and we would be able to work with the lines that we\u2019re putting into place and earn revenue from outside of the city of Lubbock in order to pay for the maintenance of those lines going forward,\u201d Rose said. \u201cThat\u2019s where we are in the process right now, is we\u2019re now seeing the full revenue stream and the full benefit of joining ERCOT going forward.\u201d<\/p>\n
Infrastructure spending<\/p>\n
Rose said the additional revenue will go directly toward infrastructure improvements. Starting next year, LP&L plans to spend approximately $47 million annually on upgrades across the city, with that level of investment continuing each year going forward.<\/p>\n
\u201cWell, just as we promised customers, that money is going right into infrastructure,\u201d Rose said.<\/p>\n
The utility\u2019s goal is to cash-fund every local infrastructure project, while larger transmission line projects will be financed through bonds paid back by ratepayers across the state. Rose said nearly 60% of LP&L\u2019s debt is funded by customers outside of Lubbock.<\/p>\n
LP&L is also pushing for an additional transmission line on the west side of the city and has been involved in discussions in Austin to justify that need based on system reliability.<\/p>\n
\u201cLubbock is not going to stop growing. And so, our charge at LP&L is to make sure we\u2019re ahead of the curve and we\u2019re out there building infrastructure so that if a company wants to come locate here, we\u2019re not scrambling, we\u2019re not behind the curve, and that lack of preparation does not reflect in higher cost on other customers,\u201d Rose said.<\/p>\n
What it means for your bill<\/p>\n
Customers are charged a separate rate by LP&L for maintaining the electrical infrastructure, regardless of which electricity provider they choose. Rose said the utility is in the process of finalizing its rate and expects to hold it steady or reduce it slightly.<\/p>\n
\u201cWe have been able to maintain our rate when we\u2019ve seen the other light providers across the state going up by a pretty substantial amount,\u201d Rose said.<\/p>\n
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