Dive Brief:
- The Chief Financial Officer of the developer of the Tres Amigas transmission interconnection called the termination of an agreement between his company and Southwestern Public Service (SPS) "not that significant" because the FERC ruling that approved the termination allows the resuption of the deal when differences are resolved.
- Tres Amigas is a proposed $1.6 billion project that would create a high-voltage direct current (HVDC) linkage between the three segments of the U.S. grid — the Eastern Interconnection, the Western Interconnection, and the Electric Reliability Council of Texas (ERCOT). It would allow delivery of abundant wind and solar generation in the West to load centers across the country.
- FERC approved an “instant proceeding” allowing termination of the interconnection agreement between Tres Amigas and Xcel subsidiary SPS, its Eastern Interconnection utility partner. The ruling was based on the Xcel filing's report that the project developer had failed to meet payment agreements and was in default on scheduled milestones.
Dive Insight:
The FERC approval (ER15-1797) noted that Xcel and SPP are “willing to work with Tres Amigas” on a new interconnection agreement once the developer can meet contractual obligations.
Xcel Energy reported it 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 argues the $1.4 million payment would have obligated it for $500 million more.
Tres Amigas 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 transmission system in the West. Its CFO predicts activity before the end of 2015.
