The Midcontinent ISO (MISO) on Nov. 27 said that NextEra Energy Transmission Midwest LLC has been selected as developer for the new Hartburg-Sabine Junction 500-kV project in East Texas.
The NextEra proposal includes an estimated $115m power grid investment consisting of a new 23-mile, 500-kV transmission line, four 230-kV lines, and a new substation, MISO said. The project will connect and improve the transmission network across Orange, Newton, and Jasper counties in East Texas, MISO said, adding that studies indicate that the project will alleviate longstanding energy congestion issues and import limitations, allowing lower-cost generation to serve customers in the area.
Aubrey Johnson, executive director of System Planning and Competitive Transmission for MISO, said in the statement, in part, “NextEra’s proposal reflects the best overall balance of cost and value in the development and completion of this important project for the region.”
Johnson added, “With developer selection complete, MISO will work closely with NextEra, state regulators and other stakeholders to support successful, on-time completion of the project.”
NextEra moves forward as the developer following a competitive selection process that included 12 proposals from 10 developers to build, own, operate and maintain the project, MISO said, adding that Hartburg-Sabine is its second project after the Duff-Coleman project to undergo competitive selection, a process established by FERC Order 1000.
The MISO board of directors approved the Market Efficiency Project in February as part of the RTO’s Transmission Expansion Plan for 2017. MISO also noted that it issued a request for proposals (RFP) on Feb. 6, and developers had until July 20 to complete submissions.
According to the MISO Nov. 27 selection report, the new 500-kV line will run generally southwest from the existing Hartburg substation – which is owned by Entergy Texas, Inc. – to a new project substation – the Stonewood 500-kV substation. Four new 230-kV transmission lines originating from the Stonewood substation will interconnect to existing 230-kV transmission lines nearby.
The report also noted that the project, which has a planned in-service date of June 1, 2023, consists of the new Stonewood substation and these new lines:
- Hartburg-Stonewood 500-kV Transmission Line
- Sabine-Stonewood 230-kV Transmission Line #1
- Sabine-Stonewood 230-kV Transmission Line #2
- Nederland-Stonewood 230-kV Transmission Line
- McFadden Bend-Stonewood 230-kV Transmission Line
The report noted that MISO’s Tariff requires MISO to evaluate and score proposals for mixed projects – transmission lines and substations – according to four evaluation criteria: cost and design, weighted at 35%; project implementation, weighted at 30%; operations and maintenance, weighted at 30%; and transmission planning participation, weighted at 5%.
NextEra’s selected proposal earned a total score of 97 out of a possible 100 points, the report added, noting that all other proposals scored between 40 and 95 points.
The selected proposal earned the categorization of “best” in cost and design, providing high value through robust transmission line and substation designs at comparatively low cost, the report said. NextEra’s project implementation cost of $114.8m is $6.5m below the median cost estimate. The report also said that NextEra submitted a comparatively low estimated annual transmission revenue requirement of $95m, which is $11m below the median estimate.
NextEra provided greater cost certainty than most other proposals through its proposed cost caps and cost containment features, the report said, noting that the company committed to forego allowance for funds used during construction and construction work in progress. The report added that NextEra’s cost recovery caps include:
- Project implementation cost at $114.8m
- A limit on annual transmission revenue requirement, as well as operations and maintenance costs, for the first 10 years
- Return on equity at 9.8%
- Equity in its capital structure at 45%
NextEra’s selected proposal excelled in its transmission line and substation design, the report said, noting that the proposal offers, for instance a double-breaker, double-bus arrangement for the 230-kV bus in the new Stonewood substation, the highest-capacity transformer bank, as well as balanced environmental risks and mitigation in transmission line and substation design.
Among other things, the report said that NextEra’s selected proposal featured, for instance, hurricane preparedness and response plans developed and tested over time; well-supported testing, switching, and predictive maintenance programs; and access to sample spare parts, with a spare 500/230-kV transformer, a spare 500-kV breaker, and a spare 230-kV breaker located at the Stonewood substation site.
As noted in the report, NextEra is a subsidiary of NextEra Energy Transmission, LLC, and an indirect, wholly owned subsidiary of NextEra Energy (NYSE:NEE).
Article amended at 5:51 p.m., EST, on Nov. 27, 2018, to note that MISO said that the project will connect and improve the transmission network across Orange, Newton, and Jasper counties in East Texas.