Now that a presidential permit has been issued, the developer of the Nogales Interconnection Project is moving forward with a direct-current interconnection to allow cross-border electricity transmission between southern Arizona and northwest Mexico.
The roughly $80 million Nogales Interconnection Project in the border town of Nogales, Ariz., will be a combination of efforts of Nogales Transmission LLC, owned by entities within private developer Hunt Consolidated Inc., and local utility UNS Electric Inc.
Joe Salkowski, a spokesman for UNS Electric parent company UNS Energy Corp., said the project's developers are in negotiations with potential off-takers of electricity that will be transmitted on the facilities and used on both sides of the border. The presidential permit was the last major regulatory hurdle for the project. Salkowski said UNS Energy, ultimately owned by Fortis Inc., and Hunt Power are jointly developing the project and anticipate a financial closing in the second quarter of 2019 that would allow construction to move forward.
"The project has received approvals from state and federal authorities including the [Department of Energy] and the [Federal Energy Regulatory Commission] on federal level and the Arizona Corporation Commission to allow the project to move forward," Salkowski said.
The DOE issued the presidential permit Oct. 10, more than two years after Nogales Transmission applied for the permit on April 8, 2016.
The project would run across the border to allow an interconnection between the asynchronous electric grids of the U.S. and Mexico via a direct-current tie to a high-voltage, direct-current converter at the proposed Gateway substation on the outskirts of Nogales.
The first phase of the project will include a converter with capacity of 150 MW, but the system will be designed for a second phase to carry up to 300 MW, Salkowski said. The first phase is expected to come into service in 2021.
Hunt Power says the project is expected to improve system reliability and opportunities for cost savings by expanding the flow of energy between Nogales and the northwest Mexico region.
In addition to the Gateway substation, the project will consist of a 3-mile, 138-kV alternating-current transmission line between UNS Electric's existing Valencia substation and the Gateway substation, as well as a new 2-mile, 230-kV AC transmission line extending south from the Gateway substation to the proposed U.S.-Mexico border crossing, where it will interconnect with the Red Nacional de Transmission grid operated by Mexico's Centro Nacional De Control De Energia.