UNITED STATES NEWS

NM project to link power grids lines up partners

Jan 13, 2012, 1:09 AM

Associated Press

ALBUQUERQUE, N.M. (AP) – A $1.5 billion effort to link the nation’s three major electricity grids is getting a boost from Japanese investors and a European company well versed in integrating power markets.

The partnerships with Mitsui and Co. and the European Power Exchange will ensure access to a large talent pool and funding for the next three phases of development for the Tres Amigas SuperStation in eastern New Mexico, said Tres Amigas president and chief executive Phillip Harris.

Harris has spent the last week meeting in Santa Fe with Mitsui officials about details of the project. Construction is set to begin this summer, and officials expect the transmission hub to be operational in 2015.

“There’s massive excitement about it,” Harris said Wednesday, following one of his meetings. More meetings were planned Thursday and again next month.

Harris said there is international interest in the success of a U.S. hub that would allow electricity to flow more freely between grids, and in the development of a trading system that could work seamlessly in a global market.

“With the technology that we have today, the communications we have and the environmental issues we need solved … you’ve got to have a way to trade on all the derivatives and all of the other environmental constraints. There’s definitely a huge need for us to find a worldwide platform,” he said.

First announced in 2009, the Tres Amigas project includes building a hub across 22 square miles of rangeland near Clovis. It would serve as the meeting point for interconnections that serve the eastern and western halves of the U.S. and a separate grid that supplies Texas.

Such a hub would provide more opportunities for buying and selling electricity across the three grids. The transmission infrastructure around the project, if developed and expanded, could allow large-scale wind and solar projects in the Southwest and the Great Plains to access large power markets.

While developers see Tres Amigas as a step toward making the nation’s power system more reliable, experts say avoiding massive power outages like the one that hit Southern California and parts of Arizona and Mexico last year will require a combination of modernization and more smart-grid technology throughout each of the three interconnections, especially given the scale of the grids involved.

The western grid, for example, depends on more than 150,000 megawatts of generation to meet its load. Tres Amigas will initially be capable of transferring 750 megawatts between the eastern and western grids.

“In the grand scheme of things, even a project like this is dwarfed by the need of each of these interconnections to continue to pursue modernization and expansion of their grids,” said Abraham Ellis, a Sandia National Laboratories scientist who works on renewable energy grid integration.

In addition to infrastructure, Tres Amigas is planning for its own power exchange that would allow for the buying, selling and trading of power across all three U.S. interconnections and potentially beyond, Harris said.

Mitsui has agreed to invest $12 million in exchange for an equity interest in the project. The European exchange plans to share the expertise it has gained while coupling power markets in France, Germany, Austria and Switzerland. That exchange operates spot markets that account for more than one-third of Europe’s electricity consumption.

With construction only months away, Tres Amigas is grappling a location for its trading operations.

“Ultimately what it’s boiling down to is taxes,” Harris said. “It looks like it’s going to be a pretty heavy tax penalty to locate in New Mexico and that very well could be a deal-killer for the state.”

Tres Amigas officials said they would pay 4 to 6 percent higher taxes in New Mexico than if they were to locate in neighboring Texas, which has a number of power exchanges already in operation.

Former Gov. Toney Anaya is working with Tres Amigas to develop legislation that would offer an abatement of the gross receipts taxes related to the trading.

Supporters of the project are facing a time crunch. The Legislature begins its 30-day budget session on Tuesday and Tres Amigas plans on making a decision on where to locate its headquarters and trading floor by March.

Anaya and Harris said there’s a possibility the Legislature will address the issue since the spin-off opportunities of having both the hub and power exchange in New Mexico are so great.

“This is a way for New Mexico to get into the energy game in a big way,” Harris said. “It’s hard to estimate the peripheral and derivative businesses that will come in as a result of where it’s located.”

___

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

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

United States News

U.S. Sen. Dianne Feinstein of California, who was elected to the Senate in 1992 and broke gender ba...

Associated Press

Democratic Sen. Dianne Feinstein of California dies at age 90, sources tell the AP

U.S. Sen. Dianne Feinstein of California, who was elected to the Senate in 1992 and broke gender barriers throughout her long career, has died.

18 minutes ago

FILE - This April 10, 2011, file photo, shows a rig and supply vessel in the Gulf of Mexico, off th...

Associated Press

Biden calls for up to 3 oil and gas lease sales in the Gulf of Mexico, disappointing all sides

WASHINGTON (AP) — President Joe Biden’s administration on Friday proposed up to three oil and gas lease sales in the Gulf of Mexico but none in Alaska as it tries to navigate between energy companies seeking greater oil and gas production and environmental activists who want Biden to shut down new offshore drilling in the […]

28 minutes ago

File - As shoppers wait in the background, a woman looks at Apple's new iPhone 15 at an Apple Store...

Associated Press

Higher gas prices lift Fed’s preferred inflation gauge but underlying price pressures remain mild

WASHINGTON (AP) — An inflation gauge closely tracked by the Federal Reserve accelerated in August, boosted mainly by higher gas prices. But measures of underlying inflation slowed in the latest sign that overall price pressures are still moderating. Friday’s report from the Commerce Department showed that prices rose 0.4% from July to August, up from […]

36 minutes ago

CORRECTS NAME SPELLING Russian President Vladimir Putin, left, meets with Russian Deputy Defense Mi...

Associated Press

Putin orders former Wagner commander to take charge of ‘volunteer units’ in Ukraine

Russian President Vladimir Putin has ordered one of the top commanders of the Wagner military contractor to take charge of “volunteer units” fighting in Ukraine, signaling the Kremlin’s effort to keep using the mercenaries after the death of their chief, Yevgeny Prigozhin. In remarks released by the Kremlin on Friday, Putin told Andrei Troshev that […]

2 hours ago

FILE - President Joe Biden delivers remarks on his economic agenda at a training center run by Labo...

Associated Press

As employers face labor shortages, Biden administration rolls out playbook for training workers

WASHINGTON (AP) — The Biden administration on Friday is expected to release a playbook on best practices for training workers as the low 3.8% unemployment rate and years of underinvestment have left manufacturers, construction firms and other employers with unfilled jobs. Worker shortages have been a frustration for some employers, who upped their investments in […]

4 hours ago

The Iron Gate Dam is seen in Hornbrook, Calif., Sept. 17, 2023. The dam is one of a series of four ...

Associated Press

Things to know about the Klamath River dam removal project, the largest in US history

SACRAMENTO, Calif. (AP) — The largest dam removal project in United States history is underway along the California-Oregon border. The project will remove four dams on the Klamath River. Work has already begun on removing the smallest of the four dams. The other three will come down next year. The project is part of a […]

6 hours ago

Sponsored Articles

Home moving relocation in Arizona 2023...

BMS Moving

Tips for making your move in Arizona easier

If you're moving to a new home in Arizona, use this to-do list to alleviate some stress and ensure a smoother transition to your new home.

...

Mayo Clinic

Game on! Expert sports physicals focused on you

With tryouts quickly approaching, now is the time for parents to schedule physicals for their student-athlete. The Arizona Interscholastic Association requires that all student-athletes must have a physical exam completed before participating in team practices or competition.

...

OCD & Anxiety Treatment Center

5 mental health myths you didn’t know were made up

Helping individuals understand mental health diagnoses like obsessive compulsive spectrum disorder or generalized anxiety disorder isn’t always an easy undertaking. After all, our society tends to spread misconceptions about mental health like wildfire. This is why being mindful about how we talk about mental health is so important. We can either perpetuate misinformation about already […]

NM project to link power grids lines up partners