If all goes as planned, construction on Pattern Energy Group’s Southern Cross transmission project would begin in 2014, Chris Shugart, senior developer with Pattern Energy, told TransmissionHub on Dec. 19.
Pattern Energy on Dec. 19 said FERC has ordered the city of Garland, Texas, and its municipal-owned utility, Garland Power & Light to interconnect Southern Cross with the Electric Reliability Council of Texas.
Shugart declined to disclose the exact cost of the project, but said it was “well over $1bn.”
As for permitting, Shugart said the FERC approvals were the “key” ones needed. While some states require transmission companies to be certified as state utilities, that is not the case for either Louisiana or Mississippi. “In the case of Texas, we have Garland Power & Light, which is already certified,” he added.
“As we get into the exact siting and land acquisition process, there, of course, will be a whole variety of state and federal laws that we will comply with in siting our line and assessing [the] impacts of our line,” he said.
The project has a capacity of up to 3,000 MW, and will be about 400 miles long. Its beginning point is at ERCOT Interconnection in East Texas, with an ending point at substations in northeast Mississippi. The power delivery date is scheduled for about 2016.
Between now and 2016, much of the company’s efforts will involve marketing the capacity, routing the line, and acquiring right-of-way, Shugart said.
“This is over 400 miles of new right-of-way, so it’s going to be a pretty substantial land acquisition effort that has to proceed before we begin construction.”
Project benefits involve providing the Southeast with Texas’ vast wind energy resource and reliability.
“Compared with almost any of the large HVDC lines that are otherwise being developed in the country, this one is unique in that it’s connecting two robust markets as opposed to a lot of the others that are coming from areas with a lot of wind generation, but not much load,” he said. “This is connecting two very robust systems with very diverse resources, and that opens up all kinds of opportunities for reliability assistance between the regions.”
Shugart said the company is proceeding with the project despite uncertainty surrounding wind energy policy.
As noted recently by the American Wind Energy Association, Congress finalized year-end legislative activity without taking action to extend the wind energy production tax credit.
“There, obviously, is uncertainty about what’s going to happen with the current federal incentives for wind at the end of 2012,” Shugart said, noting that the transmission project is a longer-term project.
“I think that something will end up happening at the federal government – what that looks like, and when that happens, there’s uncertainty around that, but we think the wind industry is on strong fundamentals and it will be proceeding in the timeframe we’re talking about,” he said. “Exactly what structure and regulatory framework it’s under at that point remains to be seen, but we’re certainly proceeding ahead.”
The order also directs Texas transmission providers to provide transmission service into and out of ERCOT, and contained a disclaimer of jurisdiction by FERC, ensuring the continued status quo of all transmission providers and entities within ERCOT as generally exempt from FERC regulation. Pattern Energy said FERC’s confirmation of the disclaimer of jurisdiction represents a regulatory milestone in the project’s development.
FERC will finalize the order upon completion of the interconnection studies and final definition of the necessary interconnection facilities.
In another order, FERC granted Pattern Energy the authority to sell transmission service on Southern Cross at negotiated rates, and detailed provisions for subscribing anchor tenants and holding an open season as a participant-funded transmission project. The order allows Pattern Energy, through its wholly owned subsidiary Southern Cross Transmission, to start anchor tenant negotiations with interested shippers immediately.