Lucky Corridor lines up wind project customer base for N.M. power line project

Lucky Corridor LLC, which is developing a transmission line project in northern New Mexico, told the Federal Energy Regulatory Commission on Jan. 9 that it has lined up wind project developer Gallegos Wind Farm LLC as a potential customer for 500 MW of capacity.

Under existing authority dating back to a 2012 approval of this project by FERC, Lucky Corridor is authorized to allocate 70% of the line’s capacity to anchor customers. The company now requests authority to increase this allocation up to 100%.

The company was formed to develop, acquire, construct, and operate electric transmission infrastructure in northern New Mexico. It is developing two transmission projects— the Lucky Corridor Project and the Mora Line. The company plans separately to seek authority to presubscribe transmission capacity at negotiated rates for the Mora Line.

The Lucky Corridor Project is a 93-mile transmission facility upgrade of an existing 115 kV line to a double-circuit 230-kV transmission line owned by Tri-State Generation and Transmission Association. That upgrade would add 850 MW of capacity to the existing 250 MW on the Tri-State line, bringing the total to 1,100 MW. The line would run from Tri-State’s 230-kV Gladstone, New Mexico, substation to Tri-State’s 345-kV Taos substation. Energy transmitted on the line would likely be delivered into the transmission system of Public Service Co. New Mexico for transmission on PNM’s system to Four Corners.

It now appears more likely, though not yet certain, that the Lucky Corridor Project will have a configuration different from that principally described in the 2012 order. In the 2012 order the commission noted that the company was considering constructing the project as a 345-kV transmission line. After the commission issued the 2012 order, the company continued engineering work on both the double circuit 230 kV and the single circuit 345 kV configurations. The final choice depends upon several factors, including studies performed under the National Environmental Policy Act (NEPA), an ypotential terms and conditions of a joint participation agreement between the company and Tri-State that would facilitate the 230-kV configuration, and market factors.

The 345-kV configuration would stand alone, not as an upgrade to Tri-State’s 115-kV line, and would be single-circuit rather than double-circuit. Like the 230-kV configuration, the 345-kV line would provide 850 MW of transmission capacity. The company has submitted both the 230 kV and 345 kV configurations for approvals under NEPA. The company estimates that it can construct the 345 kV configuration for about $83m less than the 230 kV configuration. At this time the 345 kV configuration is the more likely to be built.

Gallegos Wind has a call on 59% of the line’s 850 MW of new capacity

Some 500 MW or 59% of the 850 MW of capacity of the Lucky Corridor Project has been optioned to Gallegos Wind Farm LLC, an affiliate of a company doing business in New Mexico as Triangle Gallegos LP. On June 4, 2013, Lucky Corridor entered into an anchor customer agreement granting a conditional option to Gallegos Wind Farm for 300 MW of east-to-west transmission from the Gallegos Wind Farm interconnecting with the Lucky Corridor Project at a point near the Gladstone Substation near Farley, New Mexico, to a point near Tri-State’s Taos, New Mexico, substation. The option is not binding in the event Lucky Corridor abandons or is unable to finance the Lucky Corridor Project. Both Lucky Corridor and Gallegos Wind Farm agree to utilize their reasonable best efforts to develop their respective projects.

In 2014, to expand its project area for additional phases, Gallegos Wind Farm requested that the New Mexico State Land Office conduct an auction on the Union County, New Mexico, courthouse steps for the right to develop wind energy resources on state lands contiguous with privately-owned land Gallegos Wind Farm already controlled. Although the state received approximately twenty requests for the bid package, Lucky Corridor received no serious indications of interest in the capacity. Gallegos Wind Farm was the sole party to submit a bid at the auction.

Following up Gallegos Wind Farm’s acquisition of development rights on state lands, on June 26, 2014, Lucky Corridor entered into a second anchor customer agreement for the Lucky Corridor Project. Through this agreement Gallegos Wind Farm acquired a conditional option for an additional 200 MW of east-to-west transmission from its interconnection at Farley, New Mexico, to PNM’s Ojo substation near Espanola, New Mexico. The agreement anticipates the 345 kV configuration and associated interconnections.

Luck Corridor said it continues to seek potential customers to presubscribe remaining capacity through its website, direct meetings and telephone conferences with gas and renewable energy generation developers, attendance at industry conferences, and when advertising would appear productive. Gallegos Wind Farm has significant prospects for expanding its wind farm development, thereby creating significant potential that it will acquire additional capacity from the company.

Lynn Chapman Greene, the majority owner and the Chief Executive Officer of Lucky Corridor, said in attached testimony: “There are no other agreements with any customers for the Lucky Corridor Project. The owners of Gallegos Wind Farm now control and are developing about 90,000 acres of prime renewable energy resource land, and have more than five years of data from eleven met towers. The met tower data shows first rate wind energy available at the time of day and time of year when the Southwestern U.S. has peak demand. The avian studies, permitting activities and other development work are proceeding. Limited construction starts have included the construction of turbine string roads in both 2013 and 2014.”

Greene added: “In addition to the Gallegos projects, we know of three wind projects under development in the eastern area of the Lucky Corridor Project. We also know of an operating solar project, believed to be 30 MW owned by an affiliate of the Southern Companies, and believed to be unable to expand unless we are successful at developing new transmission capacity. We believe there are about 700 operating gas wells along our pathway, but know of no current, announced plans to produce electricity from that gas. The fact that only Gallegos Wind Farm submitted a bid for the opportunity to develop a project on New Mexico State lands demonstrates that the numbers are small. Even so, we plan to advertise in early 2015 to be certain that we have not missed any potential takers.”

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.