Houston-based Clean Line Energy Partners LLC has signed an agreement to acquire Power Network New Mexico from New York City-Based GS Infrastructure; which is a division of Goldman Sachs, the global investment banking firm. Financial terms for the transaction were not made public. The deal will require approval from the New Mexico Public Regulation Commission.
Also known as the Central New Mexico Collector System, the development project would construct a 200-mile-long, 345-kilovolt (kV) transmission line designed to transfer renewable power resources from New Mexico to other parts of the western United States.
Specifically, the $350-million transmission project would deliver 1,500 megawatts (MW) of renewable energy from eastern and central New Mexico to PNM’s Rio Puerco switching station northwest of Rio Rancho.
With headquarters in Albuquerque, PNM is the largest electricity provider in New Mexico, serving 500,000 customers in dozens of communities across the state. From the Rio Puerco switching station, existing PNM transmission lines would carry the energy north and west to the Four Corners switchyard, which is a gateway to western markets.
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The project is projected to bring the following economic benefits to New Mexico:
- New investment of over $2 billion in renewable generation and transmission,
- New jobs to support the renewable energy industry in the state, and
- Improved reliability of the New Mexico transmission grid.
In addition, by enabling more wind generation in the energy supply mix, the project will save scarce water resources and result in meaningful reductions in air and water pollutants and carbon dioxide emissions
The project is being jointly developed with the New Mexico Renewable Energy Transmission Authority (RETA), a public entity. RETA has authority to issue bonds to help finance renewable energy transmission or storage projects. In 2010, RETA commissioned studies by Los Alamos National Laboratory and identified the Power Network’s Central New Mexico Collector System project as a means of facilitating transmission.
Michael Skelly, president of Clean Line, said he expects demand for renewable power to grow across the western United States as coal plants are retired and states increase mandates for wind and solar power.
In California, additional rules to reduce use of ocean water to cool power plants and to limit greenhouse gas emissions also favor more use of renewables, Skelly believes. "We think any one of a number of variables will continue to help boost renewable demand in California," he commented.
Skelly declined to disclose the cost to build the power line, but said it will be in the "hundreds of millions of dollars."
The project is separate, but complements one of Clean Line's larger transmission projects, called the Centennial West Clean Line——one of four major direct-current transmission initiatives proposed by the company nationwide. The much larger Centennial West Clean Line project is designed to move 3,500 MW of renewable energy from New Mexico and Arizona to California at an estimated cost of $2.5 billion.
As the cost of building solar and wind plants declines, reducing prices to utilities, transmission becomes more attractive, according to Skelly."The cheaper the resource gets, the more worthwhile it is to go get it," he said. "It makes transmission more compelling."
New Mexico RETA, created in 2007, is one of eight state-level electric infrastructure authorities focused on developing new transmission and energy storage projects to promote development of renewable energy resources.
By statute, 30 percent of the energy transmitted by any RETA-supported project must come from renewable sources.
Edited by Rachel Ramsey