The SunZia Transmission Project just won a hard-fought peace with the U.S. military. But the project must now face a fight with environmentalists before it can deliver high value New Mexico wind and southwestern solar power to energy hungry cities in California and Arizona.

“SunZia is grounded in regional planning. It is not a developer’s wild idea,” SunZia Southwest Transmission Project Manager Tom Wray explained to Utility Dive.

Wray has been involved in transmission planning since 1995. Even then, the Southwest Area Transmission Subregional (SWAT) Planning Group was looking for a way to improve “the transfer capability between southern New Mexico and southern Arizona” and “the interface between Arizona and Southern California,” Wray said.

Proposed in 2006 and intended to meet that need, SunZia would be two 500 kilovolt, alternating current (AC) lines with a 3,000 megawatt capacity. Projected to cost $2 billion, SunZia would “enable the development of renewable energy resources, including wind, solar, and geothermal generation, by creating access to the interstate power grid in the Southwest,” according to the U.S. Bureau of Land Management website.

“SunZia is just a long extension cord to tap into 11,000-plus megawatts of class 4 winds with a capacity factor of 45% to 47% that are currently stranded in central New Mexico,” Wray said. And it could also transmit the enormous solar resource along the Interstate 10 corridor, he added.

SunZia is only now completing its National Environmental Policy Act (NEPA) permitting process, which began in 2009. “Big transmission projects are not for the faint of heart,” Wray acknowledged. “We are hoping to get an ROD [Record of Decision] by February 2015.”

The permitting maze

“SunZia was the first major long distance transmission line that started through the NEPA process,” explained Sonoran Institute Senior Adviser John Shepard. “These long distance transmission lines are the mother of all land use challenges. They cover a lot of ground, cross multiple landscapes, go by multiple communities, and, for the most part, the beneficiaries are the power generators at one end and the purchasers at the other end. In between, these lines have significant impacts on landscapes and communities that get limited benefits.”

The Wilderness Society (TWS) was among the southern Arizona environmental groups that worked with SunZia and the many federal agencies involved, under NEPA, in permitting for lands under the jurisdiction of the Department of Interior (DOI). “We think public lands have a role but we want development to be done in the right places and the right ways,” TWS Assistant Director Alex Daue told Utility Dive.

TWS accepts the need for new transmission but wants a route that strikes a balance between providing renewables and avoiding “unacceptable impacts,” Daue said. “Unfortunately, the route the developer and DOI’s Bureau of Land Management (BLM) have settled on in Arizona does not strike that balance.”

SunZia has, however, reached an agreement with the Department of Defense (DOD) to underground five miles of wires in three separate segments on lands near the White Sands Missile Range, Wray said.

The agreement came only after DOD rejected the route selected in the BLM’s final Environmental Impact Study (EIS). Reaching a compromise took “at least a couple of dozen meetings over a couple of years,” Wray said. “I understand and respect the DOD position. But providing electricity is also a matter of national security.”

In the end, driven by the White House Council on Environmental Quality (CEQ), SunZia found cooperation from the office of the Secretary of Defense, Secretaries of the Interior Salazar and Jewell, and DOI Counsel Steve Black.

Launched in 2009, the Obama administration’s Rapid Response Transmission Team (RRTT) initiative “worked very well” by showing the agencies how to improve interdepartmental cooperation, Wray said. “Getting that done was a big deal. Secretary Salazar and Steve Black deserve a lot of credit for changing that mindset. And Secretary Jewell has continued that effort.”

The RRTT was created to prevent “residual objections” to the BLM final EIS, Shepard said. By that standard, it “manifestly failed because DOD was against the BLM route in the final EIS.”

“Everyone involved with these projects is struggling with the legacy of the old way of doing them, without upfront planning and a landscape scale approach to finding lower impact routes and better engagement with stakeholders and the public,” Daue said. “RRTT is trying to leverage some of the evolving thinking but it is a real challenge.”

“They have a path forward,” said American Wind Energy Association Western Policy Director Tom Darin, who helped develop the RRTT while working at the White House. “Some think the solution is a bad precedent because burying high voltage lines costs a lot of money. But White Sands might say it should have been a longer segment. It is a path forward. The RRTT helped the project get there.”

Ready to finance?

With the last objection to the final EIS resolved, the BLM’s early 2015 ROD would allow Wray to proceed to financing. “It will be a project-financed project,” he explained. “There is a lot of money now chasing bankable projects with PPAs from investment grade utilities. We will take generators’ contracts to sell electricity to their customers and pledge those contracts as collateral to borrow money to build the project.”

When construction is completed, SunZia will refinance. “Banks love transmission lines because they are risk-less and they are forever,” Wray said.

He expects construction to take “about 36 months to 40 months” and be complete in time for “the next tranche of opportunity” to sell renewables in the California and Arizona markets. He predicts that will come between late 2018 and early 2020, driven by increased state mandates and the need for more renewables to meet federal emissions regulations.

But TWS and other Arizona environmentalists may disrupt Wray’s timetable. When the BLM’s designated western energy corridors threatened “unacceptable impacts,” the groups’ lawsuit stopped development in those corridors. It remains stopped while BLM rewrites rules for environmentally sensitive areas and access to renewable resources.

The environmental groups likewise object to the BLM’s final decision on the SunZia route. It could, they argue, harm the San Pedro River Valley, its wildlife refuge, and avian habitat. It would also fragment the still unspoiled Aravaipa Canyon. “The environmental impacts far outweigh the benefits,” Daue said, though proposed routes through Tucson would be acceptable.

Because of the population and infrastructure there, that BLM alternative route through the Tucson basin was never really viable, Shepard said. “But the environmental community maintains the impacts of SunZia in the San Pedro River Valley are significant enough that the route should not happen.”

Daue would not predict whether or not there will be another lawsuit.

“If there is, and the court determines BLM did not do adequate study, it will require a re-evaluation of those aspects of the EIS,” Shepard said.

BLM will probably not issue a Notice to Proceed if there is a legal challenge. “White Sands is handled," Shepard explained. "The San Pedro River Valley is the other deal-breaker.”