Building transmission lines from remote, renewable-energy-rich areas may have become simpler in late February after the Federal Energy Regulatory Commission ruled that a transmission company may negotiate capacity rights on two proposed lines with a single buyer. Before the decision, FERC required power transmission companies to offer the entire capacity at the same price and for the same length of time in an open-bidding period called “open season.”
In its decision, FERC admitted the open-season rule has become “unduly rigid and inflexible,” and is not conducive to developing renewable transmission projects. FERC will evaluate similar applications on a case-by-case basis.
The ruling was made on Feb. 19 as FERC approved an application from two subsidiaries of Calgary, Alberta-based TransCanada Corp. to presubscribe half the capacity of two $3-billion, 3,000-MW lines, to an unnamed “anchor tenant.”
Chinook Power Transmission LLC and Zephyr Power Transmission LLC will hold open season in April for the remaining 1,500 MW capacity on each line. Chinook plans a 1,000-mile, 500-kV high-voltage DC line from Harlowtown, Mont., to south of Las Vegas the same destination of a similar line Zephyr plans to run 1,100-miles from Medicine Bow, Wyo. Both will tap Pacific Northwest and Idaho wind resources and are to be in service by 2014. TransCanada will build 750-MW converter stations on each line in Borah, Idaho.
Greg Hopper, a managing director at Black & Veatch Corp., Overland Park, Kan., says having an anchor tenant will not necessarily ensure profitability, and risk-averse companies may wait until the line is fully prescribed before doing preliminary design and engineering.
FERC loosened open-season rules for natural-gas pipelines in 2005.
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