ALBUQUERQUE, N.M. — The oil and gas boom in southeastern New Mexico and West Texas is pushing electricity demand on Xcel Energy’s grid to all-time records.
The regional transmission network delivered 6.15 gigawatts of electricity to customers on July 19, about 350 megawatts more than the company had predicted in peak demand on any given day for this year, and the highest amount ever managed by the network.
A heat wave in July contributed to the surge. But it’s oil and gas production in the Permian Basin that’s driving accelerated load growth on the grid, said David Hudson, Xcel Energy president for New Mexico and Texas.
“Some of it is weather driven, but we’re seeing extreme strength in load growth in New Mexico, particularly in Eddy and Lea counties, and it’s almost all from oil and gas processing activities,” Hudson told the Journal. “We’re now projecting to connect at least another 286 megawatts of load growth this year to the system, and that wasn’t even in our forecast for this year.”
One megawatt is enough electricity to serve about 500 typical homes in the area.
Over the next five years, Xcel projects another 768 MW more in load growth for the area above and beyond what the company had previously forecast, Hudson added.
“That’s additional electricity to serve customers asking for service that we will connect up, primarily in the oil and gas industry,” Hudson said.
Most of the growth is coming from the Delaware Basin, an oval shaped shale rock formation that protrudes from southwest Texas northward into Eddy and Lea counties. Modern drilling technologies have turned that zone into one of the most-productive oil and gas plays in the world. That’s particularly true in Eddy County, where companies are also setting up new large-scale gas-processing facilities.
“Right now Eddy County is our super hotspot for load growth,” Hudson said. “These are places where we didn’t have any high-voltage transmission 10 years ago. There was nothing even out there back then.”
Excel is investing heavily in new infrastructure to meet demand. Last week, it inaugurated an 86-mile, 345 kilovolt transmission line from Hobbs to the newly built China Draw Substation southeast of Carlsbad.
The $140 million project is the first of several segments of a $400 million transmission improvement project that by 2020 will connect to the TUCO substation north of Lubbock, Texas, said Xcel spokesman Wes Reeves.
Since 2011, the company has invested in more than 800 miles of transmission lines and more than 30 new substations, plus upgrades to another 40 substations. Counting new projects now planned or underway, the company will have invested about $3 billion in regional infrastructure by 2021, Reeves said.