PNM Resources (NYSE:PNM) on May 1 said that its wholly owned New Mexico utility subsidiary, PNM, has entered into an agreement with an affiliate of Pattern Energy Group 2 LP – Pattern Development – and the New Mexico Renewable Energy Transmission Authority (NM RETA) to acquire the Western Spirit transmission project.
As noted in the statement, NM RETA and Pattern Development have partnered to develop and build the project, which PNM will acquire once construction is completed in 2021, resulting in a $285m net investment. PNM said that the capacity additions will strengthen the company’s existing system and provide upgrades to accommodate 800 MW of new wind energy.
PNM Resources’ Chairman, President, and CEO Pat Vincent-Collawn said in the statement, in part: “While sunshine and wind may be plentiful in New Mexico, the ability to deliver the clean energy they can produce is limited by the capacity of transmission lines. Expansion of the PNM transmission grid makes it possible for Pattern Development to invest in wind energy resources in New Mexico.”
A PNM wholesale transmission customer will fund the investment through an incremental rate that is subject to FERC approval and will not impact the rates of PNM’s existing retail and wholesale customers, PNM said, adding that the acquisition is also subject to the necessary regulatory approvals.
NM RETA’s Gloria Castillo on May 6 told TransmissionHub that Western Spirit Transmission LLC is co-developing the project with NM RETA, and that a different Pattern entity involved in developing wind generation facilities will pay PNM for transmission services.
Of what regulatory applications have been submitted, Castillo noted that NM RETA has just submitted to the New Mexico Public Regulation Commission an updated request for a reliability determination for the latest routing of the Western Spirit Line. Castillo added, “We have already received an approval of an earlier routing.”
Of when NM RETA expects the acquisition to be completed, Castillo said: “While we can never predict the timing of regulatory approvals, the reliability update is a straightforward mater. We hope to have the updated approval in 60 to 90 days.”
Project construction has not begun, Castillo said, adding that the acquisition of rights of way and other pre-construction activities are underway.
Pattern Energy’s Matt Dallas on May 6 told TransmissionHub that project construction is expected to begin by early 2020.
In response to why the decision was made for PNM to acquire the project, Dallas said, “PNM examined multiple options for the transmission expansions necessary to meet FERC upgrades required under FERC obligations, and selected Western Spirit in part because of its long history with N.M. RETA, which offered certainty that the project could be fully developed and constructed in a timely manner, with minimal permitting risk.”
Castillo said: “In view of the extensive transmission network that PNM currently operates in this part of New Mexico, PNM was always a potential buyer. It is RETA’s understanding that PNM needs additional transmission infrastructure and capacity to service pending transmission service requests being made by renewable energy developers.”
As TransmissionHub reported, Pattern Development in May 2018 said that it has acquired the Western Spirit Transmission Line and Mesa Canyons Wind Farm in New Mexico from Clean Line Energy Partners.
According to the project’s website, the proposed 140-mile, 345-kV Western Spirit line would “collect renewable power from wind-rich central New Mexico and deliver” about 1,000 MW of power to the existing grid in northwestern New Mexico.