Southwestern Public Service (SPS) on Oct. 24 filed with the New Mexico Public Regulation Commission a hearing examiner’s proposed recommended decision pertaining to the company’s proposed 345-kV transmission line and associated facilities in Lea and Eddy counties in New Mexico.
The hearing examiner recommended that the commission conclude that the public convenience and necessity requires, or will require, SPS to build, operate and maintain the proposed project, and therefore SPS’ request for issuance of a certificate of convenience and necessity (CCN) for the proposed project is in the public interest and should be granted.
SPS said that commission staff and URENCO USA d/b/a Louisiana Energy Services LLC (LES) do not oppose the proposed recommended decision, and neither the New Mexico Attorney General nor Occidental Permian Ltd., have responded on the recommended decision.
As noted in the hearing examiner’s proposed recommended decision submitted to the commission, SPS in May filed its application, requesting that the commission issue a CCN in relation to the project, which extends about 88 miles from SPS’ Hobbs generating substation to its China Draw substation; approve the location of the proposed 345-kV transmission line segments and associated facilities; determine a minimum 150-foot right of way (ROW) width is necessary to build, operate and maintain the proposed 345-kV transmission line segments; and authorize SPS to accrue an allowance for funds used during construction (AFUDC) to finance construction of the 345-kV transmission line and associated facilities.
The 345-kV transmission line would consist of three segments: a line extending from the Hobbs generating station, located 10 miles west of Hobbs, N.M., to the proposed Kiowa substation; a line extending from the new Kiowa substation to the North Loving substation, located two miles northeast of Loving, N.M.; and a line extending from the North Loving substation to the China Draw substation, located 25 miles southeast of Carlsbad, N.M.
The transmission line segments would cross about 44 miles of federal land, about 30 miles of state-owned land, and about 13 miles of privately owned land, the hearing examiner added. The total line length of the 345-kV transmission line would be about 87 miles, and about 414 steel tangent structures would be installed over the total length of the line.
The hearing examiner also noted that the proposed project’s estimated cost is about $163m, including about $3.2m attributable to AFUDC. SPS plans to have the proposed project in service by June 2018, based on the need for the proposed project and the associated construction schedule timeline. Individual transmission line segments and bus structures may be completed in stages prior to that date, the hearing examiner added.
Noting that SPS has been experiencing substantial load growth in its southeastern New Mexico service area involving oil and gas development, new mining activities, and other resource-related development, the hearing examiner said that the proposed project’s need was evaluated by the Southwest Power Pool (SPP) in conjunction with SPS and other stakeholders through the SPP’s High Priority Incremental Load Study. For southeastern New Mexico, that study identified the significant expansion of oil and gas facilities in the Avalon and Bone Springs shale deposits as the reason for the exceptional load growth in the area, and determined that the proposed project is needed to serve the projected natural resources load, along with any other load additions expected in the SPP footprint.
The hearing examiner added that as a result of the study process, individual projects in SPS’ southeastern New Mexico service area were identified to address the reliability needs and were initiated through SPP’s notification to construct (NTC) process. The NTCs identified these upgrades to SPS’ transmission system that are included in the proposed project:
- Construct a new 47.2-mile, 345-kV line from the Kiowa substation to the Hobbs generation substation
- Build a new Kiowa 345-kV substation
- Install a new 345/115-kV 448 MVA transformer at the new Kiowa substation
- Build a new 20.4-mile, 345-kV line from the new Kiowa substation to the North Loving substation
- Install a new 345/115-kV 448 MVA transformer at the North Loving substation
- Install 345-kV line terminals at the North Loving substation for Kiowa and China Draw; install 345-kV terminal equipment necessary to install the 345/115-kV 448 MVA transformer at North Loving
- Build a new 18.2-mile, 345-kV line from the North Loving substation to the China Draw substation
- Install a new 345/115-kV 448 MVA transformer at the China Draw substation
- Build a 345-kV ring bus, expandable to breaker and a half for six lines or transformer terminals at the China Draw substation
The hearing examiner also said that staff concluded that the proposed project is needed to enhance reliability in SPS’ southeastern New Mexico service area and accommodate projected load growth. Staff recommended that the commission grant SPS’ request for issuance of a CCN for the proposed project.
The hearing examiner added that the EA determined that the three 345-kV transmission line segments, as modified by the EA, and associated facilities, would not unduly impair important environment values. The EA also concluded that the proposed project is not expected to have any significant impacts on the biological, cultural or visual resources found in the designated study area.
While isolated occurrences of special status species – such as the lesser prairie-chicken – and associated habitat, playas, migratory bird nesting areas, cave and karst features, and potentially jurisdictional water features were identified, the EA found that the route was sited to minimize impacts to those resources.
The hearing examiner also noted that the BLM found that the proposed project would not have any significant impacts, individually or cumulatively, on the quality of the human environment. The BLM in February granted to SPS a 150-foot ROW for all BLM-managed lands crossed by the 345-kV transmission line segments that would extend from the Hobbs generating substation to the China Draw substation; and an ROW for the Kiowa substation, which would be built on BLM lands.
As to the state lands crossed by the proposed project, the NMSLO granted to SPS a 35-year, 150-foot ROW for the proposed 345-kV line, authorized SPS to build and maintain the proposed transmission line segments on the specified NMSLO lands in Eddy and Lea counties, and authorized a 20-foot temporary constriction space on those same lands.
SPS has also obtained the necessary ROW easements from 17 landowners for the private lands crossed by the proposed project, the hearing examiner added, noting that the company is continuing to negotiate with three landowners to secure the remaining private easements to complete the proposed project.
Among other things, the hearing examiner said that staff recommended that the commission enter the requested ROW determination in its final order, and that the commission authorize SPS to accrue AFUDC for the proposed project.
The hearing examiner recommended that the commission order SPS to make the compliance filings specified by staff, including that SPS file the actual costs of the proposed project as soon as they become available.
SPS is a subsidiary of Xcel Energy (NYSE:XEL).