The division of the US transmission grid into separate regions has been the cause of complaints, disconnected pricing, and even blackouts for years.
One startup firm is trying to change that, and has taken on a devilishly complicated but potentially industry-transforming project in the American southwest.
For more on energy startups in a sector that traditionally favors large-scale players, see: First Stop Brooklyn: Wind Energy Startup Makes An Unlikely Home.
A former transmission executive, a California consultant, an alternative energy investor and a corporate energy infrastructure firm eager to show off its newest technology have joined forces on the Tres Amigas Superstation project in Clovis, New Mexico. The superstation would be able to access current and planned transmission on all three existing electricity grids in the US if built; including the Eastern, Western and Texas (ERCOT) connections, with their various regional markets and operators.
The ability to trade power across multiple pools and move electricity from one grid structure to the next could help even out prices and allow trading of electricity to grow in what has traditionally been an extremely balkanized market, project attorney and Steptoe Johnson lawyer Dave Raskin told Breaking Energy. The project is also located near thousands of megawatts of existing or proposed renewable energy projects, Raskin said.
The team building Tres Amigas, which plans to begin construction early in 2012, includes: CEO Phillip Harris, a founder of eastern electricity market PJM Interconnection; COO Ziad Alaywan, formerly at the California Independent System Operator and engineering firm ZGlobal; CFO Russell Stidolph, a founder of private equity firm AltEnergy; and American Superconductor, a Massachusetts based provider of electricity infrastructure.
The project was approved to price transmission services, most important federal approval, by the Federal Energy Regulatory Commission in March 2010, and is set to file new agreements, including an “anchor customer agreement,” with FERC soon, Raskin said.
While the land for the project itself is now under lease, “whether or not there will be issues with transmission siting into the superstation is unclear,” Raskin said. “Siting remains a difficult, open issue” at the state level, he said.
“FERC is trying to allow for development of a national trading system [in electricity], but siting has state level authority with big opportunities for parochialism.”
Siting Stumbles Sting
The most recent transmission order from FERC resolves many of the issues around transmission planning process and the framework for cost recovery from the capital-intensive projects, Raskin said, but the remaining issue of siting authority wasn’t dealt with in Order 1000.
For more on the FERC order and the transmission industry’s response, read: Paying For The New Grid and Energy Stakeholders Ask Senate To Oppose Transmission Bill.
With uncertainty created by court orders on a 2005 FERC decision, Raskin said that any change on siting would have to originate with Capitol Hill. “A lot of projects are going to move forward over the next couple of years,” creating an opportunity for public debate on where and how transmission issues should be resolved.