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Developer opens solicitation for capacity on Ariz./NM transmission line


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Developer opens solicitation for capacity on Ariz./NM transmission line

Thedeveloper of a new and upgraded transmission project across southern New Mexicoand Arizona launched an open solicitation for capacity on the line.

TheSouthline Transmission Project consists of about 240 miles of new 345-kV linebetween the Afton substation near Las Cruces, N.M., and the Apache substation,south of Wilcox, Ariz., and the upgrade to double-circuit 230-kV of about 120miles of existing single-circuit 115-kV line owned by the , orWAPA, running between the Apache substation and the Saguaro and Tortolitasubstations near Tucson, Ariz. The line will connect to up to 14 existingsubstations and may include the development of a new substation in Luna County,N.M., the developer said.

DeveloperSouthline Transmission LLCis a subsidiary of Hunt Power LP,a private entity part of a group of companies controlled by the Ray Huntfamily. The entity that began the open solicitation on March 31, SU FERC LLC, asubsidiary of Sharyland UtilitiesLP, is also controlled by the Hunt family.

Accordingto a Southline fact sheet, the line would improve reliability and relievecongestion in the Desert Southwest, as well as facilitate the delivery ofelectricity from renewable resources. A project timeline calls for the line tobe in service in 2018.

FERCin September 2015 accepteda public/private partnership between the two Hunt-controlled entities and WAPA.Southline Transmission intends to use a real estate investment trust, or REIT,structure to act as a passive financing entity leasing its ownership interestto SU FERC. SU FERC has the right to use Southline Transmission's portion ofthe assets, operate the assets, sell transmission service at negotiated ratesand allocate capacity rights to customers.

Accordingto the solicitation notice, the overall project will provide up to 1,000 MW ofbidirectional transmission capacity. SU FERC will have 882 MW of east-to-westcapacity rights from Afton to Apache, and 748 MW from Apache toSaguaro/Tortolita. In the west-to-east direction, SU FERC will have 186 MW fromSaguaro/Tortolita to Apache and 825 MW from Apache to Afton.

WAPAwill hold the remaining capacity rights, which are not subject to thesolicitation.

Customerswill have to demonstrate first mover status and an investment-grade creditrating or other evidence of creditworthiness, according to the solicitationnotice. Bidders will have to request at least 50 MW of capacity for at least 10years. The first phase of negotiations is set to begin July 11.

Aninformation webinar on the open solicitation is scheduled for April 22. Theadministrator of the solicitation process is Energy Strategies LLC of Salt LakeCity.