“This project will be built,” a key official in the proposed wind-power electric transmission line from New Mexico to Arizona promised Lincoln County commissioners at their meeting last week.
To take advantage of the full production tax credit, a commercial operation must be running by 2020, and representatives of SunZia and Pattern Energy said their firms are up to the job. Several county ranch owners are involved in providing rights of way for the wind turbines and transmission line.
Martin Bailey, who is the real property manager for the Sun Zia project and for Southwestern Project Group, a principal in the project, said the transmission line will cover 515 miles, consisting of two 500 kv (kilovolt, a unit of electromotive force, equal to 1000 volts) circuits that run from south of Corona in Lincoln County to the southeastern portion of Phoenix.
Breaking down the miles, Bailey said 315 are in New Mexico. Of that total, 134 are on Bureau of Land management property, 90 miles are owned by the state and 94 miles are privately owned. A land service contracting firm was engaged to negotiate right of entry and right of way agreements, he said. In Arizona, all but four miles of the privately owned 16 miles are part of an agreement already accepted by that state, he said. The BLM owns 50 miles and the state owns 134 miles.
“We’re getting to the point where we can show where the towers are going to be,” he said.
The reception from private landowners has been “very positive,” he said. “A couple are opposed for variety of reasons, but I think we’ve made substantial progress. We have over 50 miles of right of entry secured.”
Commissioner Dallas Draper asked if the military from Holloman Air Force Base and White Sands Missile Range have accepted the route. Bailey said a memorandum of agreement was executed by the U.S. Department of Defense, but the journey has taken time.
“When started in 2008, we had a 460-mile route,” he said. “Over time and investigation, our environmental contractor and BLM’s looked over 2,400 miles of alternatives. Seven and a half years later, (the route) was determined by a record of decision in February of 2015. Some issues we asked to be revised. It still not set in stone, because if we run into a cultural or biological resource, it could be slightly modified, but within a quarter mile either side is where we think it is going to be.”
Draper asked if in view of the Public Service Company of New Mexico’s contention that it needs a rate increase, PNM would be able to tap into the transmission line. Bailey replied that the state’s power needs already are being met with existing resources. SunZia officials have talked to PNM about resource allocation and establishing a site to access their system, “but right now, it would create an overload. They have an interest in it, because wind resources are very cost effective. I think over time as the project gets further along and turbines get built, we will see PNM jump on board.”
Bailey said the permitting process has been extensive and the company just executed an agreement with the BLM with the stated purpose of bringing high quality renewable energy to western markets, specifically Arizona and California. The Western Electric Coordinating Council permitting process, where a phase rating process approach is used, has rated the project at 4,500 megawatts in an alternating current and direct current configuration, he said.
“We’re in the plan of development stage, where there is a requirement under the BLM grant document that we prepare a full implementation plan on how it is going to be constructed, cultural resource surveys, biological surveys, species surveys, eagle surveys, and all have to be done before BLM will issue a notice to proceed,” Bailey said. “We’re hoping that will happen by the end of 2017. The research surveys will start in Arizona on 25th of this month and run west to east. We segment research studies into four (sections) tied to substation locations, strategic areas where robust resources of wind and solar exist.”
In May 2011, SunZia received permission from the Energy Regulatory Commission to allow 50 percent of the Sun Zia capacity to be transacted under a merchant contractual basis. The company started a search for an anchor tenant, which is similar to a shopping mall that needs a large department store as an anchor to create a guaranteed stream of revenue and ensure profitability. Sun Zia signed a letter of intent with First Wind, which was acquired in 2014 by Sun Edison, he said. After multiple acquisitions that company was in financial disarray and declared bankruptcy in April 2016. The search for an anchor was renewed and Pattern Energy was selected, one of five or six top companies doing wind, he said.
Pattern Energy has a portfolio of 18 wind power facilities, including one it has agreed to acquire, with a total owned interest of 2,644 megawatts in the United States, Canada and Chile that use proven best-in-class technology, according to the company’s website.
“We’re on a very tight schedule,” Bailey said. “There is vast interest in New Mexico wind resource. It’s very robust and hits markets on time of day and year and creates a level energy field. The production tax credit product must be in service by 2020. We’re pushing the envelope to get into commercial operation by that deadline. After 2020, the production tax credit diminishes every year with a sunset clause.”
Pattern project manager Loralee Hunt told commissioners that for the past 16 years she practiced law in Roswell “until I was caught up in this wind energy business.” Her father currently is a state senator in District 7 covering the counties of Dona Ana and Otero, “and we have been working as a land owner with my family’s over 100-year-old farm and ranch for the last six years in wind development.”
“I’ve been on contract with Pattern Energy as a result of that projects for the last 18 months,” she said. “The entire process was so exciting to me that I agreed to serve as their project manager for all of their wind development in the state of New Mexico.
“This project will get built. It will be one of the first in the country, a massive IPP (independent power producer) project that is privately owned that will take energy across state lines into the California market. The Broadview project where I have been working is the first to transports power from New Mexico all the way to California. Pattern is in the process of completing the first two phases of that. The last phase will be in commercial operation by January 1, 2019. Their commitment to get projects done is phenomenal.”
Hunt said she met with land owners all day Monday and had more meetings set for Tuesday.
“It’s a very exciting time for New Mexico and as we struggle with the budget, it is nice to see an opportunity to be an energy exporter in addition to our robust oil and gas industry and bring economic development into the state,” Hunt said.
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