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BTU officials tell Bowie council rising transmission costs now make up a growing share of local bills
Summary
BTU representatives told the council that transmission costs (T-cost) are a growing portion of Bowie's electric bill (over 27% in April) driven by statewide transmission investment and increased wind/solar generation; BTU said it has added a regulatory line item to recover pass-through T-costs and may adjust it as needed.
Ken Lindbergh and Wes Williams of BTU presented an overview of the components of Bowie's electric bill and explained how transmission-cost (T-cost) pass-throughs from ERCOT and PUCT affect local customers.
Lindbergh described the BTU-side charges Bowie pays directly: a demand charge (based on a customer's peak usage), an energy charge (per kilowatt-hour usage), and a fuel charge (to recover the cost of fuel and third-party purchases to serve load). He then distinguished those from pass-through charges BTU bills on behalf of others, chiefly the transmission cost of service (T-cost). "The T-cost for the April was over 27% of Bowie's bill," Lindbergh said.
Lindbergh showed historical figures illustrating transmission-cost escalation, noting statewide ERCOT transmission recoveries rose from about $1.3 billion in 2008 to roughly $4.9 billion in 2023, and said this has driven material increases in the pass-through portion of local bills. He explained that transmission companies submit costs annually to ERCOT, ERCOT recommends them to the PUCT, and the PUCT reviews and rolls them into the annual T-cost matrix. Responsibility for the T-cost allocation uses a 4CP (four coincident peaks) baseline so that a load's share reflects its percentage of system peak usage.
BTU officials said the utility implemented a regulatory-rate line item in 2012 intended to recover rising T-costs and that BTU has adjusted that regulatory rate multiple times to keep recovery in line with statewide increases. Lindbergh said BTU's preliminary integrated resource plan (IRP) indicates local base rates are revenue neutral for rural customers, but he warned there is no clear end to rising T-costs and the regulatory line item may need further adjustment.
Council members asked clarifying questions about how T-cost rates are set and how often they are reviewed; Lindbergh answered that rates are set annually and recommended the council contact BTU staff for follow-up if they had additional questions.
No formal council action was taken on the presentation during the meeting.
