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NM seeks federal waiver for transmission line

Fri, 05/04/2012 - 8:13am
SUSAN MONTOYA BRYAN - Associated Press - Associated Press

New Mexico's largest electric utility, the state's transmission authority and Power Network New Mexico have filed a request with federal regulators that would clear the way for a new transmission line to funnel solar- and wind-generated power to western markets.

The Renewable Energy Transmission Authority and Power Network New Mexico are developing the $350 million project.

The 200-mile transmission line would be capable of delivering 1,500 megawatts of electricity from eastern and central New Mexico to Public Service Company of New Mexico's switching stations. From there, it could be sent elsewhere in the West.

"It represents a practical near-term solution for addressing the lack of transmission needed for additional New Mexico renewable energy development," Jeff Mechenbier, Public Service Company of New Mexico's director of transmission, said in a statement.

Public Service Company of New Mexico is a unit of PNM Resources Inc.

Mechenbier said PNM customers will be protected from any cost risks associated with the project since the transmission authority has arranged for private capital. The project will be backed by equity from GS Infrastructure Partners II.

Developers are hoping to have the transmission line up and running in 2015.

The developers are seeking a waiver from the Federal Energy Regulatory Commission that would allow for a first-ready, first-served approach for energy producers interested in connecting to the line.

Currently, PNM must study customer requests on a first-come, first-served basis regardless of whether the customer is ready to produce electricity.

"With the level of interest in developing renewable energy in New Mexico, a first-come, first-served rule has resulted in lengthy waits and frustration for PNM and its customers," Mechenbier said. "We need improved processes that are fair and meet the needs in our region for timely and efficient transmission and generation development."

The proposed transmission line was analyzed as part of a study by Los Alamos National Laboratory. The lab found that new transmission capacity in New Mexico would enable about 5,200 megawatts of renewable energy projects to be developed.

The line would run from renewable generation plants near Torrance County to PNM's Rio Puerco station northwest of Albuquerque and then north to the Four Corners region.

The renewable energy development associated with the project has the potential to exceed $1.8 billion, according to RETA documents.

New Mexico already has utility-scale wind farms capable of generating nearly 500 megawatts of electricity, and there is a push by the solar industry to tap into the state's sunshine with either more utility-scale projects or roof-top solar for homes and businesses.

New Mexico's renewable energy standard also will be increasing from 10 percent to 15 percent in 2015.

The transmission authority first entered into an agreement with Power Network New Mexico in October 2011 to develop the transmission line. At the time, state officials called it a historic step given that it was the first relationship between a private investment firm and a quasi-state authority to build transmission.

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Follow Susan Montoya Bryan on Twitter: http://www.twitter.com/susanmbryanNM

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