NEET Southwest, Rayburn seek approval of CCN transfer involving 138-kV line in Texas

NextEra Energy Transmission Southwest (NEET Southwest) and Rayburn Country Electric Cooperative on Feb. 16 filed with the Public Utility Commission of Texas a joint application requesting approval to transfer Rayburn’s certificate of convenience and necessity (CCN) rights for transmission facilities from Rayburn to NEET Southwest.

The companies seek to transfer the CCN rights to an approximately 30-mile segment of 138-kV transmission line – including easements – located in Cherokee, Smith, and Rusk counties between the Jacksonville substation in Cherokee County and the Overton substation in Rusk County (the Jacksonville-Overton Line).

The Jacksonville-Overton Line is owned by Rayburn and is operated within the Southwest Power Pool (SPP) region, the companies added.

The companies noted that in June 2017, they entered into an asset purchase agreement under which Rayburn agreed to sell the Jacksonville-Overton Line to NEET Southwest for a purchase price based upon the net book value of the facilities plus a 25% acquisition adjustment. As of Jan. 31, the net book value of the Jacksonville-Overton Line was about $2m. Based upon that net book value, the current purchase price for the transaction would be about $2.5m, the companies added.

The line was built in the 1990s as part of a larger transmission build-out to serve Rayburn and other wholesale load within SPP. In 1991, the companies added, Rayburn entered into a power supply agreement with Southwestern Electric Power Company (SWEPCO). To allow delivery of power to Rayburn under that agreement, and to serve other load-serving entities in the area, Rayburn and SWEPCO built a number of transmission facilities, including the Jacksonville-Overton Line.

Rayburn concluded that it would be in the best interest of its members to integrate its load and 130 miles of its transmission within SPP into ERCOT, the companies added. With the transition of load and facilities into ERCOT, Rayburn will no longer need the Jacksonville-Overton Line to serve load within SPP. Rayburn therefore investigated options for divesting the line and, after negotiations, entered into the transaction to sell the line to NEET Southwest.

The companies also said that following the transaction, the line would remain within SPP and would continue to support the reliable operations of other load-serving entities in the area. NEET Southwest would transfer functional control of the line to SPP.

Among other things, the companies said that NEET Southwest expects to become a transmission-owning member of SPP as soon as the SPP Tariff and governing documents permit.

NEET Southwest is an indirect, wholly owned subsidiary of NextEra Energy (NYSE:NEE), and a wholly owned direct subsidiary of NextEra Energy Transmission (NEET). The application further noted that Rayburn is a not-for-profit electric generation and transmission cooperative that serves wholesale electric loads to its four electric distribution cooperative members in ERCOT and in SPP.

About Corina Rivera-Linares 3058 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.