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Tres Amigas Awaits FERC Decisions on Key Issues Tres Amigas LLC is awaiting the FERC’s decision on two issues key to its plans to build facilities that would link North America’s three electricity grids and convert incoming alternating-current flows to direct current supply that could be sold where prices were favorable.
Linking the three separate grids--Eastern Interconnection, Western Electricity Coordinating Council and Electric Reliability Council of Texas—is viewed by many as a key step in helping move renewable energy from places like Texas to other locations where demand is high.
The two issues being considered by FERC are critical to the Tres Amigas endeavor. First, the company is seeking the right to charge generators competitive rates to move their power to markets that need it, rather than charging on a cost basis for that service. This is the lynchpin of the business plan for the proposed $300 million to $1 billion plant.
A preliminary study showed that over 2,000 hours in 2008 saw a price difference of more than $50 per megawatt-hour between Texas and California. As generators choose to move available power to markets where prices are higher, Tres Amigas would benefit.
The co-owners of Tres Amigas have not sought Energy Department stimulus grants for the project, preferring to seek private and equity financing.
The second key issue relates to Texas, which has deliberately isolated its electrical grid since 1935 in order to remain free from federal oversight. Tres Amigas has asked the FERC to disclaim jurisdiction over Texas. Without this ruling, the project will have much more difficulty gaining financial support—and power supply.
While the movement of power across state lines typically constitutes interstate commerce, the company’s petition suggests that because the energy is being converted from AC to DC and then back to AC before it is synchronized with its destination grids, that Texas’s power is not technically flowing into neighboring states. While some have criticized the project’s siting for its location in already wind-rich areas, others, including N.M. Gov. Bill Richardson, have praised the project as a step toward increased adoption of renewable power. |
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