Public Service Company of New Mexico (PNM) on Feb. 24 filed a new transmission service agreement (TSA) with Iberdrola Renewables LLC at FERC, seeking authority to deliver up to 170 MW from the Arabella Wind LLC generation project in New Mexico to a switchyard outside of the PNM balancing authority area (BAA).
The TSA is for up to 170 MW of power from the Guadalupe 345-kV switching station to Iberdrola’s designated customer at the Four Corners 345-kV switchyard in the Arizona Public Service BAA, according to the filing (Docket No. ER16-997).
PNM submitted the non-conforming TSA for firm point-to-point transmission service to replace a previous interconnection agreement with the Arabella project that FERC approved Oct. 8, 2015. On Dec. 11, 2015, Arabella and PNM agreed to cancel the previous agreement and executed a pro forma agreement for firm point-to-point transmission service consistent with the terms of PNM’s open access transmission tariff, the utility said.
Arabella then assigned the pro forma agreement to Broadview Energy JN, which subsequently assigned the agreement to Iberdrola Renewables, according to the filing. Iberdrola Renewables assumed responsibility to obtain dynamic scheduling service for the output of the wind generation facility from the Guadalupe receipt point to the Four Corners delivery point, PNM said.
That dynamic scheduling service is the non-conforming provision of the TSA, and was mutually agreed upon by Iberdrola Renewables and PNM, with Iberdrola Renewables agreeing to be charged for any transmission losses in accordance with PNM’s open access transmission tariff, said PNM.
“The commission has accepted non-conforming provisions to the pro forma TSA when it finds that they are just and reasonable and that other unique factors necessitate the nonconforming provisions,” the utility said.
The non-conforming provisions are just and reasonable because they are needed to accommodate the request to deliver the wind project’s output outside PNM’s BAA “and clarify that Iberdrola Renewables is responsible to pay for losses,” PNM asserted.
FERC has previously accepted TSAs filed by PNM that included dynamic scheduling service with provisions associated with transmission losses, PNM added.
In the previous interconnection agreement that was approved by FERC, PNM indicated that its 345-kV transmission line extending from a switching station north of Bernalillo, N.M., to PNM’s Blackwater station in the Clovis-Portales area of eastern New Mexico is fully subscribed and would require a significant amount of voltage support to accommodate an injection of 170 MW. That voltage support would come from a static VAR compensator at PNM’s Guadalupe switching station and other network upgrades at a cost of $35.7m, according to the previous agreement.
In the latest facilities study report to accommodate the transmission service, completed by PNM in December 2015, the utility put the cost of the static VAR compensator and other network upgrades at $39.1m, and said the upgrades would take about 19 months to construct. Accounting for local permitting requirements, availability of land and other factors, the upgrades are expected to be completed by March 1, 2018, according to the facilities study report.
PNM said it may incur outage-related costs, such as re-dispatch, during the construction of the system upgrades, and while those costs could not be estimated at this point, it reserved the right to recover such costs from Iberdrola Renewables.
PNM is a subsidiary of PNM Resources (NYSE:PNM).