FERC Denies Waiver Request by PNM and RETA for Changes to PNM's Transmission Queue

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[author: Albright, Jeffrey H.]

On September 20, 2012, the Federal Energy Regulatory Commission (FERC) denied requests by the Public Service Company of New Mexico (PNM) and the New Mexico Renewable Energy Transmission Authority (RETA) that would have allowed the Power Network Project to advance to the first position in PNM's transmission queue and to charge negotiated rates for transmission rights on the Power Network Project. The Power Network Project is designed to provide bundled service over its new facilities and PNM's transmission system from Rio Puerco NM to Four Corners for one composite rate. The Power Network Project is designed to add new facilities consisting of approximately 200 miles of 345 kV double circuit transmission facilities from eastern and central New Mexico to Rio Puerco, just northwest of Albuquerque, adding approximately 1500 MW of new electric transmission capacity for further transmission to Arizona and California by approximately 2015.

Opponents to the PNM and RETA request argued that changing the transmission queue would prejudice other companies who were ahead of Power Network, and that there was significant concern of whether sufficient transmission capacity was available on the grid to the Four Corners subsequent to any transmission capacity that would result from the Power Network Project. NM Governor Martinez, several members of Congress and others supported PNM and RETA's applications. New Mexico Public Regulation Commissioner Lyons contended that the waiver request would add uncertainty to other stakeholders who owned property or were developing facilities that would be pre-empted by placing Power Network higher in the queue. He encouraged PNM to engage its stakeholders in reforming its queue process. PRC Commissioner Howe acknowledged that the Power Network Project is not jurisdictional to the NMPRC, he encouraged FERC to hold a technical conference in New Mexico in order to discuss the technical merits and potential problems of the Power Network Project. FERC also pointed to the lack of environmental impacts and other potential issues that make approval of a change in the transmission queue premature at this time.

In summary, FERC determined that approving the waiver could result in undesirable consequences, including harm to the parties that are not able to participate in the Power Network Project, and that the transmission service requests in the queue over Path 48 to the Four Corners exceed the available transmission capacity. FERC determined that if it were to grant the waiver, further network upgrades might impose an economic handicap to those existing customers in the transmission queue who would be placed at a disadvantage by placing Power Network Project ahead of them. At the end of the day, FERC determined that the waiver could not be granted as it is, and the accompanying Negotiated Rates Application was premature, but could be revisited if PNM and RETA successfully restructure its transmission queue and find a solution for removing the existing transmission queue backlog.

Read the full Order here.

 

Published In: Administrative Agency Updates, Energy & Utilities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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