Clean Line Energy Partners has signed an agreement to acquire Power Network New Mexico, a company that is developing with the New Mexico Renewable Energy Transmission Authority (RETA) a 200-mile, 345-kV transmission line.
The project is located entirely within the state of New Mexico and will connect wind resources in the east-central part of the state to Albuquerque.
“It’s windy in east-central New Mexico, and if you get the power to Albuquerque you can get it to Four Corners,” Clean Line CEO Michael Skelly told TransmissionHub on April 25. “The reason Four Corners is such a compelling place to get to is because there are a lot of coal retirements there and that’s going to free up transmission capacity going west,” he said.
Clean Line and RETA will collaborate on the development of the project, with Clean Line financing development and, eventually, construction activities, Skelly said. Both entities will bring to bear their technical and routing expertise to the project. RETA will also be helpful in navigating tribal issues that the project could run into with respect to siting, Skelly said.
“It will be several more years of development before we start to build anything,” he said, adding that the project will cost “several hundred million dollars.”
TransmissionHub has reported the project to cost between $350m and $400m and enter service in 2Q15.
The acquisition of this project would boost Clean Line’s presence in New Mexico. The company is currently developing the Centennial West transmission line, a 900-mile, 600-kV transmission line that begins at Guadalupe, N.M., and ends at Mira Loma, Calif.
“This will both leverage our experience in the state and allow us to build on that,” Skelly said. “We already work with RETA on the Centennial West line so this is a sort of natural extension of those efforts.”
The two projects’ resource areas are about 150 miles apart, he noted.
Power Network New Mexico is owned by the GS Infrastructure Partners family of funds, which formed the company solely to develop a 1,500 MW merchant transmission collector system for renewable power in the state, according to a filing the company made with FERC on April 25. In the filing, Power Network New Mexico asked FERC to cancel its market-based rate tariff. Doing so would remove the company’s status as a public utility and obviate the need for FERC approval of the transaction.
The companies are looking to close the transaction within 60 days.
The intended acquisition of Power Network’s project is the second major transaction Clean Line has announced in the last five months. National Grid’s $40m investment in Clean Line, announced in November 2012, closed in January.
This article was amended at 6:04 p.m. on April 26, 2013, to reflect TransmissionHub’s previous coverage of the project’s cost and in-service date.