SunZia fighting condition it guarantee tranmission of renewable energy

A consortium says it wants to bring renewable wind and solar energy to Arizona cities by building two power lines from New Mexico. But it’s fighting hard against being required to guarantee it will put renewables on the line.

Building the 515-mile-long SunZia project will make Arizona’s electrical transmission more reliable, reduce congestion on existing lines and help Arizona meet increasingly strict clean air and clean power rules, the consortium says.

Opponents want 50 percent of one line set aside for renewables, to make SunZia put its money where its mouth is. They want to ensure that “dirty” fossil fuel isn’t a major source of power on lines run through the lower San Pedro River valley.

But such an order would violate federal law forbidding power lines from “undue discrimination” against energy suppliers, SunZia officials say, although opponents believe it would be legal.

This is a central issue in the power-line proposal that will go before the Arizona Corporation Commission in Phoenix on Tuesday.

The five-member commission must decide whether to grant the hotly contested SunZia proposal a certificate authorizing construction. That would be one of the last major permits the project needs. The renewables condition that line opponents want was turned down, at the consortium’s urging, in November 2015 by ACC’s Line Siting Committee, whose approval of power lines is also required.

The Obama administration has already fast-tracked approval of SunZia as one of six major transmission line projects being planned nationally to integrate renewables into the electric grid.

The power lines have been estimated to cost $1.2 billion to $2 billion and would carry enough electricity to power about 1.5 million homes. The project’s backers hope the first line will be operating by 2021. The proposal is sponsored by a consortium of five companies including Tucson Electric Power, which has a very small percentage stake, and Phoenix’s Salt River Project.

Opponents — who don’t want any power lines through the largely untrammeled San Pedro valley — question the sincerity of SunZia’s commitment to renewables. They also question the economic feasibility of building the line and selling renewable power in Arizona or California when those states already have a huge potential for solar.

They suspect — and Sun Zia denies — that the consortium most likely will use the first line to transmit fossil fuel natural gas from an approved, still unbuilt natural gas power plant slated for Bowie in eastern Arizona. The Bowie plant will be developed by the Southwestern Power Group, a leading sponsor of the SunZia project.

Opponents also want SunZia ordered to build the 300-plus mile-long New Mexico portion of line before building the 200-mile Arizona segment.

Promoting a power line as serving renewables and using it to carry only fossil fuels through the San Pedro valley would be “the ultimate sin,” said Peter Else, an opponent intervening in this case who lives along the river in rural Cascabel.

SunZia Project Manager Tom Wray counters, “You can’t put a condition on that would require the applicant to violate federal statutes in order to comply with the condition.”

CLEAN ENERGY NEEDED

Last fall, Wray testified that New Mexico’s high quality wind energy resources are “stranded,” with no way to transmit them to cities.

“That’s one of the reasons the line is so long, 515 miles, to get that resource and bring it back” to its endpoint in Pinal County, where an existing substation connects to big transmission lines serving Phoenix and Tucson, Wray told a Line Siting Committee hearing. The panel signed off on SunZia in November after 13 days of hearings.

The lines’ renewable energy will help Arizona comply with the federal Clean Power Plan, which limits power plants’ greenhouse gas-producing, carbon dioxide emissions, Wray said. Another tougher rule that the line will help Arizona meet, Wray said, is the recently tightened federal ozone air quality standard, which will leave many Arizona counties in violation.

Wray displayed maps citing federal estimates of extensive solar and wind energy resources in New Mexico and solar resources in Southern Arizona that could replace much of the coal fired power that will be eliminated by the tougher rules — if there’s adequate transmission to bring it to cities.

SunZia also has a letter of intent with the San Francisco-based SunEdison company, a global firm that builds wind and solar power projects, to supply wind energy. It would be produced at SunEdison’s planned Gallo wind farm in Lincoln County, New Mexico, near where the lines would start.

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The letter was signed “with the anticipation of an agreement” to be a formal user, testified Ravi Sankaran, a top SunEdison official, at the hearings. Sankaran handles the company’s renewable energy marketing for the western U.S. The company has raised $10 billion globally to finance renewable projects, including a Davis-Monthan Air Force Base solar project, a Tucson Electric Power solar project in Marana and four other Arizona solar projects.

The Gallo project would produce about half as much energy as SunZia’s lines could carry, he said. Assuming Lincoln County OKs the project, the company plans to start operations by 2021, he said.

The wind can complement Arizona’s solar energy when the sun isn’t shining, Sankaran said. While natural gas plants can also meet this need, it’s going to be increasingly difficult to build them because their methane and other air emissions could run afoul of federal clean air standards, he said.

“If you are a utility planner . . . you don’t want to be too dependent on any one resource,” he testified. While this plant’s wind energy is also being marketed to California, “at this point none of the energy is committed to any utility or state,” he said.

Necessity questioned

Opponents say Arizona won’t need much of SunZia’s energy, that California is the most likely target for most of SunZia’s New Mexico wind power, and that Arizona may not even be that interested.

Norm Meader, one of three intervenors opposing SunZia in the Arizona Corporation Commission case, introduced graphs and pie charts produced by Tucson Electric Power and Arizona Public Service Co. He said they show that solar resources in Arizona are far more widespread, robust and cost-effective than wind energy would be.

He also introduced a paper written by advocacy group Environment America that said Arizona’s solar capacity grew 142 percent from 2010 to 2013, and that if it continues growing at even one-seventh that pace the state will be producing 25 percent of its electricity through in-state solar by 2025.

Meader also cited a statement by a TEP official that while the utility would likely buy some New Mexico wind energy if available, the future of SunZia and several other planned New Mexico transmission projects depends on the California market.

“We’re not big enough in Arizona to justify those lines, even with all of Arizona’s renewable energy needs combined,” Carmine Tilghman, TEP’s director of renewable resources, told the Albuquerque Journal last year.

Opponents also warned that an agreement SunZia made last year to bury five miles of its line north of White Sands Missile Range in southern New Mexico could prove expensive enough to make that leg of the line unfeasible. Originally, SunZia’s Wray pegged the line burial’s cost at $500 million, but later lowered the estimate to $200 million. In part, he based that estimate on recent conversations his company has had with large manufacturers of high-voltage transmission cables in Korea and Japan.

As more evidence of their view that SunZia won’t be for renewables, opponents cited a 2015 Salt River Project letter to the commission saying that its main interest in SunZia would be for importing power from “existing generation sources located in eastern Arizona.” The utility said those existing sources are coal-fired power plants, although it didn’t rule out buying renewables from the line.

“BETTER THAN NOTHING”

Last November, the corporation commission’s Line Siting Committee wrestled with this issue before approving a much less restrictive condition.

Despite some members’ desire to insure that the lines carry renewables, they accepted SunZia’s argument that a requirement could “chill” prospective investors.

The condition says SunZia “will, in good faith and consistent with the requirements of state and federal law, use its best efforts to secure transmission service contracts for renewable energy generation.”

“I think that’s helpful,” said member Mary Hamway, after saying a few minutes earlier that the project’s purpose “has kind of gone up in smoke in my mind” due to uncertainty about renewables.

“I think it is better than nothing,” said Chairman Thomas Chenal.

“Not much,” replied member Pat Noland.