A proposed $350 million transmission project is one step closer to opening northeastern New Mexico to more solar and wind energy development thanks to a decision by federal regulators.
The Federal Energy Regulatory Commission this week approved a request by Lucky Corridor LLC that clears the way for the Colorado-based company to start selling transmission rights and services to energy developers on what would be 93 miles of beefed-up power lines.
The decision comes a week after FERC turned down a request to fast-track another major transmission project aimed at getting more renewable energy out of New Mexico and into other western markets.
Rather than building new lines and substations, the Lucky Corridor project calls for upgrading existing lines to accommodate more electricity generated from the region's wind, solar and natural gas resources.
The project would be able to funnel 1,100 megawatts of electricity to existing customers and hubs that lead to hundreds of prospective buyers in other states.
"It's just a much easier, more conservative, less risky project than some of the big, really long transmission projects. This is a little discreet project that can do essentially the same thing," Lucky Corridor President and Chief Executive Lynn Chapman Greene told The Associated Press.
Some rural patches of land in the Southwest, including the plains of northeastern New Mexico, stand to be the most fruitful for developing wind and solar resources that can cover peak demands. However, the lack of transmission has complicated development efforts.
Despite more than 200,000 miles of transmission lines crisscrossing the nation, the existing system is nearly tapped out. Industry experts say increasing demand and state mandates for renewable energy are adding pressure, and billions of dollars in upgrades and new infrastructure will have to be made over the next decade.
Chapman Greene said the Lucky Corridor project is aimed partly at easing that transmission gridlock in New Mexico.
The project has the support of about 20 ranchers along the New Mexico-Colorado border. Lucky Corridor also has agreements with New Mexico's Renewable Energy Transmission Authority and the Western Area Power Administration to explore joint development and financing of the project.
As part of its agreement with RETA, Lucky Corridor would ensure that at least 30 percent of the electricity transmitted by the project comes from renewable sources. However, FERC said it would not authorize any preference based on the type of generation.
Lucky Corridor is also expected to sign a joint ownership agreement with Colorado-based Tri-State Generation and Transmission Association Inc., which uses the existing line to deliver about 200 megawatts of electricity to its customers.
Chapman Greene said Lucky Corridor has already spent millions of dollars on power flow studies and other engineering work. The speed at which the project develops will depend on how fast the company can sign its anchor tenants, she said.
Lucky Corridor has said construction could take about two years, and the line could be in service by early 2016.
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