Top Three Renewable Transmission Projects

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Arizona Corporation Commission Fifth Biennial
Transmission Assessment Commission Decision
70635 Open Hearing
Top Three Renewable Transmission
Projects Southwest Transmission Cooperative, Inc.
Jim Rein/Bruce Evans
November 23, 2009 Docket E-00000A-09-0066
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Outline of Presentation

• Factors influencing SWTC Decision for Top Three
• General Policy Comments
• General Discussion on Project Funding and Impact
  to SWTC Member Systems
• SWTCs Top Three Projects

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Factors influencing SWTC Decision

• ACC Decision No. 70635 ordered that all
  Commission-regulated utilities shalldevelop ways
  in which new transmission projects can be
  identified, approved for construction, and
  financed in a manner that will support the growth
  of renewables in Arizona.
• SWTC feels that its top three renewable
  transmission projects will help to support the
  growth of renewables in Southeast Arizona. The
  projects provide
• Access to existing or planned transmission
  projects in the short term, when most needed by
  renewable developers coming into the area.
• Ability for joint participation with other
  entities, which can ease the costs to SWTC Member
  Systems.
• Potential for renewable energy to get to markets
  in Arizona.
• Ability to accommodate SWTC Member System current
  and future RES requirements.
• Ability to accommodate the 600 MW of potential
  renewable solar development identified by the
  RTTF in Southeast Arizona.

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General Policy Comments

• SWTC is supportive of efforts AZ Stakeholders
  have made to comply with ACC Order No. 70635 and
  was involved with efforts of RTTF sub-committees.
• SWTC is in support of policy comments discussed
  by others
• Types of renewable transmission projects
• Project timing
• Definition of RTPs
• SWTC is supportive of efforts to build Renewable
  Transmission Projects (RTPs) to support SWTC
  Member System Renewable Energy Standard (RES)
  requirements. SWTC can currently meet these
  needs through its existing transmission system.

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General Policy Comments (Cont.)

• And, SWTC is generally supportive of efforts to
  build RTPs to not only meet RES but also for
  more intra-Arizona use and export to markets.
• However, SWTC is limited in its ability to
  construct RTPs or provide funding for joint
  utility RTPs, unless a need can be tied directly
  to the Member Cooperative Systems, as per RUS
  Regulations.

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SWTC Project Process
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Project Funding and Impact to SWTC Member Systems

• SWTC transmission system was designed to reliably
  and economically deliver resources to SWTC Member
  Systems.
• Expansion to the SWTC transmission system,
  through RUS funding, must be tied to Member
  System needs for reliable service and expected
  load growth.
• Funding through the Rural Utilities Service (RUS)
  is the only viable mechanism SWTC has to fund
  projects. To secure funding outside of RUS, SWTC
  must use a lien accommodation process, which
  also requires approval by RUS.

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Project Funding and Impact to SWTC Member Systems
(Cont.)

• Simultaneous with the filing of its Top Three
  Projects, SWTC filed a new rate case with the
  Commission. The new rate is needed to meet
  revenue requirements as a result of declining
  revenues.
• As a result of the declining revenues, some SWTC
  projects have been deferred including the San
  Manual Interconnect Project.
• Two of the top three projects would have a
  significant impact upon the proposed rates to the
  SWTC Member Systems.

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SWTC Top Three Renewable Transmission Projects

• San Manuel Interconnect Project
• Apache to Bicknell 230 kV Line Upgrade
• Western Saguaro-Apache 115 kV Line Upgrade (SOI
  Proposed Project)

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San Manuel Interconnect Project
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San Manuel Interconnect Project

• Project is shovel-ready - approved by ACC Line
  Siting Committee on May 12, 2009, Case 142, and
  approved by the Commission on July 9, 2009.
  Estimated in-service date is 2014.
• Total estimated cost is 4,201,359. Will be
  funded through RUS loan process. Impact to SWTC
  ratepayers is minimal.
• Tie-in to San Manuel constructed at 230 kV, but
  operated at 115 kV.
• Can accommodate approximately 240 MW from
  Renewable Generation locating near San Manuel
  (77 Solar in APS Queue).
• SWTC willing to work with third-party entities to
  upgrade its 115 kV line to allow for additional
  export of renewable energy to markets.

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Apa-Bicknell 230 kV Line Upgrade
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Apa-Bicknell 230 kV Line Upgrade

• 2 Segments planned for upgrade from 795 ACSR to
  1272 ACSS conductor (slight difference as filed
  in SWTC 2009 ACC Ten Year Plan)
• Apache to Butterfield (2016)
• Butterfield to Bicknell (2017)
• Total estimated cost is approximately
  19,600,000. Will be funded through RUS loan
  process. Impact to SWTC ratepayers is
  substantial 11.2 increase above current rate
  increase proposal
• The future upgrades could provide an additional
  450 MW that would support renewable generation in
  the area.
• SWTC willing to work with third-party entities to
  allow for interconnections to the upgraded line
  for export of renewable energy to markets.

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Western Sag-Apa 115 kV Line Upgrade
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Western Sag-Apa 115 kV Line Upgrade

• Concept is to upgrade the existing WAPA Saguaro
  to Apache 115 kV Line to a double circuit 230 kV
  Line. Use 954 ACSS or 1272 ACSS conductor as per
  WAPA standards.
• SWTC and TEP proposed this project for upgrade in
  the Western SOI process. Western may choose to
  not to fund this project, however, SWTC and TEP
  have been participating in discussions with
  another entity that has expressed interest in
  funding the project.
• Project will be shovel ready within time frame
  required as renewable resource projects develop
  in southeast Arizona.
• Upgrades could provide additional transmission
  transfer capability of as much as 1000 MW that
  would support renewable generation in the area.
• Total estimated cost (subject to change) is
  approximately 205,045,360. Funding to be
  through aegis of Western.
• SWTCs current estimated share of the cost is
  61,162,041. Impact to SWTC ratepayers is
  substantial 35 increase above current rate
  increase proposal. SWTC would expect that
  additional entities would show interest in the
  line, thus reducing costs to ratepayers.

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Questions?