New Mexico commission staff backs SPS wind purchases

Staff at the New Mexico Public Regulation Commission filed Sept. 16 testimony with the commission in favor of a Southwestern Public Service application to take power from three wind projects.

Among those testifying was Charles Gunter, the Accounting Bureau Chief with the staff of the Utility Division of the NMPRC.

SPS, through a July 10 application, is looking for commission approval for it to:

  • enter into a purchased power agreement (PPA) with NextEra Energy ResourcesMammoth Plains Wind Project Holdings LLC for the purchase of 199 MW of wind energy beginning no later than Dec. 31, 2014,  and continuing for 20 years;
  • enter into a PPA with NextEra Energy Resources’ Palo Duro Wind Project Holdings LLC for the purchase of 249 MW of wind energy beginning no later than December 2014 and continuing for 20 years;
  • enter into a PPA with Infinity Wind Power’s Roosevelt Wind Ranch LLC for the purchase of 250 MW of wind energy beginning no later than Dec. 31, 2015, and continuing for 20 years; and
  • recover, through its fuel and purchased power cost adjustment clause (FPPCAC), the New Mexico retail customer jurisdictional share of purchased power costs under these three PPAs.

“In Staff’s opinion, the three proposed PPAs should provide fuel and purchased power cost savings with little risk to SPS or its customers,” Gunter wrote. “Further, it is appropriate for SPS to recover through its FPPCAC the New Mexico retail customer jurisdictional share of purchased power costs under the three PPAs. Staff recommends that the Commission issue a final order: authorizing SPS to enter into the three PPAs described above; and authorizing SPS to recover through its FPPCAC the New Mexico retail jurisdictional share of purchased power costs under these three PPAs.”

Also supplying Sept. 16 testimony was Bruno Carrara, Bureau Chief for the Electrical Engineering Bureau of the Utility Division of the commission. Outlining the projects, Carrara said:

  • The Mammoth facility will be a new 199 MW capacity wind project located in Dewey and Blaine counties, Okla. The project will consist of 117 wind turbines and each turbine will have a rating of 1.7 MW. The Mammoth project will produce on an annual basis an estimated 996,000 MWh of wind energy. The point of delivery will be the Tatonga 345 kV substation owned by Oklahoma Gas & Electric in Dewey County, Okla. The commercial operation date will begin on or before Dec. 31, 2014.
  • The Palo Duro facility is a new 249 MW capacity wind project that will be located in Hansford and Ochiltree counties, Texas. The project will consist of 147 wind turbines; each turbine will have a rating of 1.7 MW. The Palo Duro project will produce an estimated 1.18 million MWh of wind energy annually. The point of delivery will be SPS’s Beaver County Tap on the Hitchland-Woodward 345 kV line in Hansford and Ochiltree counties, Texas, via a 15.2 mile generation tie-line. Commercial operation will begin on or before Dec. 31, 2014.
  • The Roosevelt facility is a new 250 MW wind project that will be located in Roosevelt County, N.M. The type and number of wind turbines has not been finalized but will include: 108 turbines at 2.3 MW each for a total of 248.4 MW; 147 turbines at 1.7 MW each for a total of 249.9 MW; or 125 turbines at 2 MW each for a total of 250 MW. The Roosevelt project will produce an estimated 1.06 million MWh of wind energy annually. Roosevelt will construct an approximate nine-mile 345 kV interconnection line to connect to SPS’s Eddy County-Tolk 345 kV line near Dora, N.M. Commercial operation will begin on or before Dec. 31, 2015.

Bennie Weeks, in Aug. 13 testimony for SPS, a unit of Xcel Energy (NYSE: XEL), said the acquisition of additional wind resources through these PPAs is forecasted to reduce SPS’s energy costs up to $590m (total company) net present value over the term of the PPAs. Out of that, SPS’s New Mexico retail customers are expected to experience about $100m in savings (based upon current jurisdictional allocations). The PPAs will provide greater benefit to customers than would feasible self-build options, Weeks noted.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.