More renewable energy, mainly solar power, is coming to Arizona, southern Nevada and southern California through a transmission project to be built by the Western Area Power Administration’s transmission infrastructure program and the Southwest Public Power Resources Group.
The entities have committed to build the Electrical District No. 5-Palo Verde Hub Project, which will connect a “renewable-rich” zone south of Phoenix, Ariz., with the Palo Verde market hub, a major electrical trading hub in the western United States. ED5-PVH includes portions of two other existing projects and adds new 230-kV circuits to existing and planned transmission lines.
Renewable generation has been “slow to develop” between Phoenix and Tucson, Ariz., because of limited transmission availability, Todd Rhoades, a Western project manager working on the effort, said in a statement. “ED5-PVH provides affordable, new transmission capacity from a high-potential solar area to an important power marketing hub in Palo Verde.”
Arizona utility Electric District No. 4, a member of SPPR, has agreed to buy transmission capacity across the ED5-PVH project for the next 50 years, and has signed re-assignment agreements with other SPPR member utilities for portions of their capacity purchase.
Western will borrow up to $91m from the U.S. Treasury to complete the project. The administration can fund transmission projects in its service area that integrate renewable energy into the grid or are in the public interest through a $3.25bn U.S. Treasury revolving fund created by the 2009 American Recovery and Reinvestment Act amendment to the Hoover Power Plant Act of 1984.
While Western borrows this money at the onset of the projects, it will be repaid by the owners and beneficiaries of the project during the project’s service life. The money is returned to the revolving fund to be used for other applicable Western transmission projects.
“While rooftop solar PVs are a very important part of the mix to offset expensive peaking load, the key people who are able to get projects financed right now, and who can take advantage of tax incentives, are developers of large systems,” Seth Masia, deputy editor of SOLAR TODAY magazine, which is published by the American Solar Energy Society, told TransmissionHub Sept. 15.
This is the third project Western has approved since receiving borrowing authority under the ARRA’s amendment to the Hoover Power Plant Act, the administration said.
When completed, the project will be able to deliver 254 MW of renewable energy to the Palo Verde market hub, and in total, up to 410 MW of bi-directional capacity will be added to the grid. Western also said the project will support about 300 jobs in the local area during construction, which is scheduled to begin late this year.
The project, planned and developed in cooperation with current Western customers and other electricity providers, is made up of two parts: buying transmission capacity rights on Salt River Project‘s 500-kV Southeast Valley Project transmission line between Western’s Test Track substation and the Palo Verde market, a distance of 64 miles; and building 45 miles of new 230-kV transmission line from the Test Track substation to Western’s Electrical District No. 5 substation, south of Phoenix.
Western first received a proposal for the project in May 2010 from SPPR, a group of 40 public power companies.
Western spokesperson Lisa Meiman said no further regulatory approvals are needed as the National Environmental Policy Act environmental review has been completed. No siting permits are needed as the project uses existing rights-of-way, she said.
The line is expected to be completed in 2015.