Sharyland Utilities, L.P. announced that it has filed a proposal with the Public Utility Commission of Texas (PUCT) to build an 800-mile 345 kV electric transmission loop throughout the Texas Panhandle. Known as the "Panhandle Loop", this project is intended to connect up to 8,000 MW of wind, natural gas, and coal-fired generation into the Electric Reliability Council of Texas (ERCOT) electric market.

The Panhandle Loop is supported by a group of five unique and diverse companies in the energy and chemical industries: Airtricity, Inc.; Babcock & Brown Renewable Holdings Inc; Celanese, Ltd.; Occidental Energy Ventures Corp.; and Sharyland Utilities, L.P.

"Quite simply, this proposal will bring the ERCOT grid to the Panhandle. That way, the entire state can enjoy the benefits of the tremendous wind resources located there, as well as the substantial gas and coal resources," said Hunter Hunt, President of Sharyland Utilities, L.P. "Once this project is approved by the PUCT, Sharyland Utilities is committed to moving forward expeditiously with a goal of project completion as early as late 2010."

Preliminary planning has assumed approximately 4,200 MW of wind power, 2,000 MW of gas-fired power, and 1,800 MW of coal-fired power in the region. By interconnecting such a diverse mixture of fuel sources, the Panhandle Loop brings the environmental benefits of wind power to the ERCOT market, coupled with the constant power availability provided by coal and natural gas generation. This combination of wind, coal, and gas generation ensures that a greater amount of electric power is constantly flowing along the power lines, thus resulting in a more efficient and cost-effective transmission system.

The Panhandle Loop will be open access, meaning any generator -- whether it is wind, coal, natural gas, or any other source -- is welcome to use the Panhandle Loop to access the ERCOT power market, provided it is approved under ERCOT's interconnection procedures. This will enable the potential development of more than $10 billion in new generation projects in the Panhandle, which will spur economic development through capital investments, increased tax bases, and permanent jobs once facilities are built.

As the name implies, the Panhandle Loop will be a "looped" transmission system, with three interconnected transmission lines extending from three separate points in the existing ERCOT grid. The benefits of using a looped system, rather than a single radial line that simply connects two points, is that a looped system is inherently more reliable. If one line should go down, the remaining two lines will ensure that power still flows throughout the region.

"Texas needs more power, and the sooner, the better," said Pat Wood, Chairman of Airtricity's North American Advisory Board and former chairman of both the PUCT and the Federal Energy Regulatory Commission. "The potential wind tapped by this project could power over 1 million homes annually in Texas. By bringing together natural gas and coal-fired plants with abundant Panhandle wind power as early as 2010, Sharyland's cost-effective and reliable Panhandle Loop will benefit the entire state."

Sharyland Utilities filed this proposal in PUCT Docket No. 33672, a proceeding to designate Competitive Renewable Energy Zones (CREZ). In its CREZ proceeding, the PUCT is expected to designate power regions for transmission development by July 5, 2007. If the Panhandle Loop proposal is approved, Sharyland Utilities will immediately begin the steps necessary to construct the transmission facilities as expeditiously as possible with the goal of project completion by late 2010. The cost of the project is expected to be approximately $1.5 billion, based on preliminary cost estimates.