Interview: Tres Amigas' Phil Harris

Tres Amigas LLC hopes to complete $550m financing by early fall for the first stage of its proposed “SuperStation,” the first common US power grid interconnection that will allow wind and solar generators to move electricity across America, chief executive Phil Harris tells Recharge.

“We’re in negotiations so I can’t say more than that. But it’s all positive and on trajectory,” he says, with groundbreaking scheduled for the fourth quarter. “The project is construction-ready. We have everything else - permitting and right-of-way.”

The SuperStation will be located in eastern New Mexico near Clovis, close to the Oklahoma-Texas Panhandle region - the hottest US wind play at present.

It will serve as the country’s first renewable energy market hub. Electric utilities and transmission companies will be able to connect to it, and buy power from and sell power to each of the three US power grids: the Eastern and Western Interconnections, and Electric Reliability Council of Texas’ network.

The US has the world’s largest and most complex electric transmission system. Over decades, it has evolved into the three alternating current (AC) grids in the lower 48 states that generally operate independently of each other. While that set-up functions reasonably well, it has retarded growth of wind and solar by limiting the ability of developers to market power nationwide.

“The opportunities to be able to move between any of these three areas gives the renewable generators a vastly huge market that they can all sell simultaneously,” Harris says. “One thing we are putting into our control room is the sophistication and controls to be able to dispatch and manage that process. It give not just a new market, but a new capability that doesn’t exist now in the region to move this power.”

Tres Amigas will also be open to natural gas-fired generators. “We’re agnostic as to energy source. We’re just the transmission connector and don’t take title to the energy,” he adds.

While the project is more than one year behind schedule, Harris notes that Tres Amigas has gone from ideas to construction-ready in less than five years.

“Everyone we’ve talked to has been impressed with that. Typically, for a transmission, anything of this magnitude is 10-plus years,” he says.

“The other point is that even those for various reasons who are choosing not to invest in Tres Amigas for construction, really like the project. Everyone we have talked to is very encouraging for us to get it built. They say North America needs it and that it is time for the nation to do it. We’re very pleased,” he adds.

Three stages

The project’s initial three-year stage will consist of a 750MW intertie between the Eastern and Western Interconnections utilizing the grids of Southwestern Public Service (SPS), a subsidiary of Xcel Energy, and Public Service Company of New Mexico.

To do this, the Federal Energy Regulatory Commission (FERC) earlier approved a plan whereby Tres Amigas will pay SPS to expand a substation, while the developer will build a 119km, 345kV line connection with SPS. FERC regulates interstate bulk electricity transmission.

Once financing is nailed down, Harris says that Tres Amigas has a “well laid-out plan” that it will begin executing. Among other things, it involves filings with FERC, setting up Tres Amigas’ open-access transmission tariff, establishing control rooms in Albuquerque, getting communications and SCADA in place, and gaining certification as a balancing authority in the Western Electricity Coordinating Council (WECC).

WECC is the regional entity responsible for coordinating and promoting bulk electric system reliability in the Western Interconnection.

Tres Amigas then will also order equipment including voltage source converters (VSCs) from Alstom, breakers, superconductor cable from AMSC (a project investor) and transmission towers. “There will be some civil construction at the site which will start ramping up rapidly as equipment comes in,” Harris says.

The 1.5GW second phase - linking the Western Interconnection with ERCOT at Hereford, Texas - is also taking shape and Harris hopes to begin construction in 2016. For that to occur, FERC will need to approve Tres Amigas’ request for a “waiver of jurisdiction” over ERCOT, which it expects to file by yearend.

“ERCOT will not connect with anybody outside unless FERC waives jurisdiction over the transaction. They don’t want to be regulated by FERC,” he says, adding, “Nothing will go forward in Texas without the waiver.”

The second phase will also take three years to complete. Harris says that ERCOT has been “very good and honest to work with” on interconnection studies and the process is going well. “They are trying to find the best and most economical solution that will help ERCOT,” he adds, noting ERCOT is not for or against Tres Amigas.

“They are looking at all equipment, options and opportunities, what to bring and what the value propositions are,” he says. “That’s exactly the kind of analysis that we want to have because all our experience shows that the VSCs and the way we will operate will bring electrical value to the CREZ and ERCOT.”

CREZ is the recently completed $7bn transmission build-out within ERCOT that opened some of Texas’ best wind resource areas.

Harris says that Tres Amigas will act as a kind of shock absorber for ERCOT when it has high power prices, and reactive and frequency problems. ERCOT presently has no outside help as a self-contained system.

The third phase will be 3GW and raise the total ties between the three interconnections to 5GW. “It’s the rational goal for Tres Amigas,” Harris says, pointing to similar size or greater connections between Regional Transmission Organizations (RTOs) within the Eastern Interconnection. Harris was formerly chief executive of RTO PJM Interconnection.

Looking ahead

Harris says the beauty of Tres Amigas is that it is the largest infrastructure project in North America not directly charged to ratepayers. It also has no government guarantees or financial support.

“It’s unique in that it totally stands on its own merits like a toll bridge. If this electrical toll bridge has value to you in either moving energy or in the ancillary support that our equipment can provide, then you’ll pay for it,” he says. “Our studies have shown that the value of Tres Amigas electrically and economically is huge.”