Dive Brief:

• The Federal Energy Regulatory Commission (FERC) issued an “instant proceeding” allowing the Southwest Power Pool to terminate an interconnection agreement with Tres Amigas, the proposed $1.6 billion project that would create a high-voltage direct current (HVDC) connection between the three U.S. transmission systems.
• The agreement was with Xcel Energy subsidiary Southwestern Public Service (SPS), a key utility partner. It asked the FERC to terminate the agreement after it concluded Tres Amigas had failed to meet payment commitments and defaulted on scheduled milestones.
• Tres Amigas would link the Eastern Interconnection, the Western Interconnection, and the Electric Reliability Council of Texas (ERCOT) grids to deliver abundant wind and solar generation in the West and Midwest to load centers across the country.

Dive Insight:

Xcel Energy reported SPS had voluntarily extended compliance deadlines four times, delaying the project’s agreed-on in-service date by almost two years. It also voluntarily agreed to reduce the still-unmet payment owed by Tres Amigas from $7.5 million to $1.4 million.

Tres Amigas had raised $15 million through 2011 but has not yet raised the $550 million needed to begin construction on the project’s first phase, a 73-mile, 345kV, 750 MW capacity line linking the SPS transmission system in the East and the Public Service Company of New Mexico system in the West.

Without SPS, Tres Amigas has no Eastern Interconnection partner. Because it has not yet begun construction, the New Mexico county in which it is to be located asked the state to redistribute $350,000 set aside to support the project, according to the Clovis News Journal.  

“Tres Amigas has made no attempts to cure its default and admits that it has been unable to secure funding,” FERC concluded. “We find that termination of the Agreement is not unjust, unreasonable, unduly discriminatory or preferential.”