ALBUQUERQUE, N.M. — Editor’s note: This story was updated to indicate one end point of the power line will be at the Pajarito substation, not Rio Puerco.
Copyright © 2019 Albuquerque Journal
Public Service Company of New Mexico announced plans Wednesday to acquire a 165-mile transmission line for $285 million from the state’s Renewable Energy Transmission Authority.
The Western Spirit transmission project, under development since 2010, will carry 800 megawatts of electricity from wind farms that Pattern Energy Group 2 LP, doing business as Pattern Development, is building in the Estancia Valley in central New Mexico near Corona.
RETA is a quasi-governmental entity with bonding authority that the Legislature created in 2007 to help finance, build and operate renewable-energy transmission lines to pave the way for more wind generation in central and eastern New Mexico. It owns the rights to Western Spirit, which it’s developing in partnership with Pattern.
“While sunshine and wind may be plentiful in New Mexico, the ability to deliver the clean energy they can produce is limited by the capacity of transmission lines,” PNM Resources Chairman, President and CEO Pat Vincent-Collawn said in a prepared statement. “Expansion of the PNM transmission grid makes it possible for Pattern Development to invest in wind energy resources in New Mexico.”
Pattern is a global wind developer that already operates a 324-MW facility known as the Broadview Wind Farm north of Clovis. Pattern Development is now building a 221-MW facility, the Grady Wind Center, just east of Broadview, to supply about 550 MW of renewable electricity to utilities in California and other Western states.
Separately, it’s developing 11 more wind farms with nearly 3,000 MW of capacity in the Estancia Valley. That includes the 2,200-MW Corona Wind Center, a seven-farm complex that will transport electricity through the planned, 520-mile SunZia transmission project, which will cross through central and southern New Mexico into Arizona. Pattern is the anchor tenant for the first phase for SunZia, which could carry up to 3,000 MW of electricity to Western markets once fully built.
Pattern is also building an 800-MW Estancia Valley Wind Center just north of the Corona project. That’s the electricity the Western Spirit line will transport to PNM’s Pajarito substation west of Albuquerque, where it will enter the existing grid up to the Four Corners area for sale into Western states.
Pattern acquired the rights to the Estancia Valley project, then called Mesa Canyons Wind Farm, as well as the Western Spirit transmission line from Clean Energy Partners, which had been working with RETA to build the transmission infrastructure. Under the new construction partnership with Pattern, RETA was to own Western Spirit, with Pattern paying the bill for the line through usage over 20 years.
Now, Pattern will pay PNM for using the line through incremental rates that must still be approved by the Federal Energy Regulatory Commission. None of the costs, however, will affect New Mexico ratepayers, because Pattern will pick up the entire bill as sole user of the line, although it could allow other renewable energy developers to use some transmission capacity in the future.
“Pattern Development is committed to New Mexico and has already brought more renewable energy investment to the state than any other company,” Pattern CEO Mike Garland said in an email to the Journal. “PNM’s contract to acquire Western Spirit will enable Pattern Development to make another major investment in more than 800 MW of wind in Central New Mexico, with major construction activities expected to ramp up within the year.”
The Estancia Valley wind project and Western Spirit transmission line represent nearly a $1.5 billion investment that will bring hundreds of jobs and tens of millions in tax revenue and landowner lease payments, Garland said. The Estancia Valley Wind Center is expected to go online in 2021.
Taken together, all of Pattern Development’s planned and operating wind development in New Mexico totals about $8 billion in private investment.
Once built, the Western Spirit line will be RETA’s first completed transmission project. The authority previously helped upgrade existing transmission lines that serve the 100 MW High Lonesome Mesa wind farm southwest of Eunice. RETA issued $50 million in bonds to help fund that project.
Development of high-voltage transmission is critical to harness the vast wind energy potential on New Mexico’s central and eastern plains, said RETA Chairman Robert Busch. PNM’s current transmission capacity there is filled up, and new lines are essential for wind developers to invest in new facilities.
That infrastructure has gained newfound importance given the recently approved Energy Transition Act, which requires New Mexico’s public utilities to derive 50 percent of their electricity from renewable sources by 2030 and 80 percent by 2040, followed by a complete transition to carbon-free generation by 2045. The Legislature approved the bill this year, and Gov. Michelle Lujan Grisham signed it into law. Since then, PNM has said it can achieve carbon-free generation by 2040.
RETA received a state appropriation this year to conduct a comprehensive New Mexico transmission study that will begin in the next few months, Busch said.
“This is the first major step envisioned in RETA’s forward-looking mandate and is now supported by our new governor,” Busch said in a statement.
The Western Spirit project and PNM’s plan to buy the rights to it must still be approved by the state Public Regulation Commission.
“The purpose of RETA is to encourage this type of renewable investment that brings new construction jobs and tax revenues to the state,” PNM’s Vincent-Collawn said. “We are pleased to have the opportunity to support these efforts, along with Gov. Lujan Grisham’s plans to make New Mexico a leader in clean energy.”