New Mexico regulators approve sale of Xcel Energy transmission assets to Sharyland

The New Mexico Public Regulation Commission on Dec. 4 authorized the sale of some of Southwestern Public Service Co.’s (SPS) Texas transmission assets to Sharyland Distribution and Transmission Services (Case No. 13-00140-UT).

SPS, a subsidiary of Xcel Energy (NYSE:XEL), on April 29 said it had entered into an agreement with Sharyland to sell $37m worth of transmission assets, including 66.5 miles of 345-kV transmission lines, two substations and other jurisdictional transmission facilities.

The final sale price will be known in 2Q14.

The assets specifically include:

  • A 33.1-mile segment of the Hobbs-Midland line that extends from the Midland substation to a point of termination located approximately near the intersection of the Oncor 138-kV line in Andrews County, Texas. SPS said it will continue to operate and maintain the 23.4 miles of the line located in New Mexico, as well as 8.1 miles of line extending from the New Mexico state line into Texas. SPS will sell Sharyland “only the portion of the line that begins at the Midland substation and ends at Structure 350 in Andrews County, Texas,” according to a recommended order made to the New Mexico commission on Nov. 6. “The remaining 24.714 miles of the line located in Texas will be dismantled.”

  • A 33.3-mile segment of the Grassland-Borden line extending from the Borden substation to a point of termination approximately 10.5 miles south of SPS’ Grassland substation. The Grassland-Borden Line extends from the Grassland substation located in Lynn County, Texas, to the Borden substation in Borden County, Texas; however, SPS is not proposing to sell the entire span of the line to Sharyland. “[SPS] will sell Sharyland a segment of the line starting at Structure 64, which is approximately 10 miles south of the Grassland Substation, and ending at the Borden Substation,” according to the Nov. 6 recommendation. SPS will retain the segment from the Grassland Substation to Structure 62, and will dismantle Structure 63 and remove the line spans from Structure 63 to Structures 62 and 64.

  • The Midland substation: SPS’ 230-kV to 138-kV transforming substation located in Midland County, Texas.

  • The Borden Substation: SPS’ 230-kV to 138-kV transforming substation located in Borden County, Texas. 

“At the time the Grassland-Borden Line and the Hobbs-Midland Line were built, they served a dual purpose,” according to the recommended decision. “Not only did they allow SPS to transmit the power sold to Cap Rock, but they also enhanced reliability in southeastern New Mexico, which was largely dependent on generating plants located in Texas. Since that time, a considerable amount of new generation has been built in SPS’s New Mexico service area, including the Lea Power Project near Hobbs. Therefore, according to SPS, the transmission path through the Grassland-Borden Line and Hobbs-Midland Line has become much less important for maintaining reliability in New Mexico.”

The New Mexico commission’s order included approval of SPS’ proposal to share the net gains of the sale with New Mexico retail customers based on the percentage by which the assets had depreciated in New Mexico retail rates. The total to be shared with retail customers is $1.4m, or 45.16%.   

SPS on Dec. 12 notified the Public Utilities Commission of Texas of the decision (PUCT Docket No. 41430).

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.