The Western Spirit Transmission Line (”Western Spirit”) is a proposed 345 kV transmission line that will connect more than 800 MW of new wind power to the existing New Mexico grid. Western Spirit is currently owned by the New Mexico Renewable Energy Transmission Authority (”NM RETA”), which is co-developing the line with Pattern Energy Group LP (“Pattern Energy”), a private renewable power company. After Western Spirit is constructed it will be acquired by the Public Service Company of New Mexico (”PNM”), and it will strengthen New Mexico’s grid and enhance its ability to run on renewable power. Western Spirit was selected by PNM as the best option for a capacity upgrade needed to enable the construction of over 800 MW of new wind projects. The line has been under development since 2010 when NM RETA first identified it as a benefit to the New Mexico grid.
Project Background & Description
New Mexico Renewable Transmission Authority (“NM RETA”)
NM RETA is a state authority established by statute to identify and develop transmission to enable renewable energy in New Mexico. NM RETA first identified Western Spirit in 2010 as a benefit to the grid and is the current owner & co-developer of the project.
Pattern Energy Group LP (“Pattern Energy”)
Pattern Energy is NM RETA’s private co-development partner for Western Spirit. Pattern Energy is a global leader in wind, solar, and transmission with over 5,000 MW placed in service, including New Mexico’s largest wind energy investments to date.
The Public Service Company of New Mexico (“PNM”)
PNM is the largest grid operator in New Mexico and will acquire Western Spirit when it is operational as a capacity upgrade that will enable the construction of over 800 MW of new wind energy. The investment and acquisition cost of Western Spirit will be repaid by Pattern Energy’s wind projects.
NM RETA currently owns the line and is co-developing the project with Pattern Energy. NM RETA and Pattern Energy will construct Western Spirit, and once it is operational PNM will acquire the asset.
More than half of the 800 MW is already under contract, and the remaining is being actively marketed throughout the west. The wind power enabled by Western Spirit would be available to interested New Mexico utilities or electric co-ops, provided the power contracts are deemed just and reasonable by relevant regulatory bodies such as the New Mexico Public Regulations Commission (NM PRC). However, Western Spirit is not being built with any expectation or requirement that PNM should buy any of the enabled wind power, and PNM’s acquisition of the line does not represent any express intention to contract for the wind power.
Yes. The Western Spirit transmission line will create hundreds of jobs, support local communities through property tax payments, and allow New Mexico to harness and export its great wind energy resource, bringing new investments of approximately $1.5 billion in new wind farms to New Mexico.
In addition, the line will help address a need for increased transmission reliability in light of new renewable energy goals. The New Mexico electric grid is currently at capacity between Albuquerque and the wind-rich areas in the central and eastern parts of the state, but Western Spirit will add capacity and significant strength to the grid, making the PNM system much more prepared to run on a majority of renewable energy power, as required by 2030 under
New Mexico’s Energy Transition Act.
The new wind farms made possible by the Western Spirit transmission line will also bring significant financial contributions to local communities through employment opportunities, college training, property taxes, and landowner royalties. State and local governments can use their new sources of revenue to support local community needs, such as improvements to schools, hospitals, fire departments, and police services.
Currently, New Mexico has more than 1,100 MW of installed wind capacity and 1,000 to 2,000 people in jobs related to the wind industry. The Western Spirit transmission line will almost double the amount of wind energy available in New Mexico, enabling 800 MW of wind to come onto to the grid, tapping into New Mexico’s incredible natural wind resources, and making wind power from central New Mexico available to New Mexico utilities and co-ops that otherwise would not be able to access this incredible natural resource.
No. The project itself still requires some approvals from the NM PRC, and the PNM acquisition will require approval from the NM PRC and the Federal Energy Regulatory Commission (FERC).
No. NM RETA is a state government authority that is exempt from the siting and location regulations which apply to privately developed transmission lines. This streamlined permitting authority is one of the primary benefits NM RETA can offer to invite private investment in New Mexico from companies like Pattern Energy. Even so, NM RETA is required to consider the best interest of the citizens of New Mexico, and has ensured that the Western Spirit project is responsibly sited with regard to environmental considerations. Pattern Energy has internal standards that outpace the industry, and which it applies to all of its energy infrastructure, including wind, solar, and transmission projects.
Yes. The NM PRC’s approval is needed for the acquisition of the transmission line from NM RETA and Pattern Energy. For the project to go forward the NM PRC also must affirm that there will be no negative implications for the reliability of the electric grid prior to construction and operations of the line.
Yes. PNM is required to obtain FERC approval for the incremental rate that will be charged to Pattern Energy’s wind projects as new transmission customers, to ensure that the cost of the line will be isolated from and will not impact PNM’s existing retail and wholesale ratepayers.
No. The project itself still requires some approvals from the NM PRC, and the PNM acquisition will require approval from the NM PRC and the Federal Energy Regulatory Commission (FERC).
The project is expected to begin construction by early 2020, for a commercial operations date in 2021.
- May 2019 — PNM applies for FERC approval of acquisition and incremental tariff rate and NM PRC approval of acquisition
- FERC will have up to 180 days to act on the acquisition portion (a “203 application”) and up to 60 days to act on the incremental rate filing (a “205 filing”).
- For the NM PRC approval, PNM is requesting a 6-month
- Q1 2020 — Western Spirit obtains all necessary permits
- Q1 2020 — Western Spirit acquires real property rights
- Q1 2020 — Western Spirit commences construction
- Q2 2021 — PNM acquisition and commercial operation of Western Spirit
No, not directly. The investment in Western Spirit will be repaid entirely by Pattern Energy’s wind facilities once they are operational, by way of a new incremental rate that will be designed to exempt current PNM ratepayers from the cost of the capacity upgrade. Pattern Energy’s wind energy projects will fund the transmission service cost with revenue from their power purchase agreements, including about 500 MW contracted to off-takers throughout the west, including off-takers in California.
However, if PNM at a future date opts to contract for some of the remaining wind capacity, such a contract would be subject to the regular authority and review of the NM PRC, and if the NM PRC deems such a contract reasonable then a portion of the power price would represent some of the transmission service cost.
Pattern Energy has a transmission service request for 800 MW of new capacity on the PNM system, and PNM identified Western Spirit as the best option to meet that need.
Under federal law, PNM has an obligation to identify and enable capacity upgrades for new transmission customers like Pattern Energy, provided that those new customers can fund the upgrades necessary to deliver new power to an existing grid. Several years ago, PNM selected Western Spirit as the best option to upgrade New Mexico’s capacity, in part because NM RETA had already been developing the line for over eight years and as such it has a high degree of certainty to be completed in a timely manner.
Yes, the money to fund the acquisition or construction of transmission lines is obtained through banks and investors, who expect a return on their investment. The rate of that return is determined by either FERC or the NM PRC, whoever has jurisdiction over the ratemaking.
No. This acquisition contract represents the culmination of a process which began years ago when PNM evaluated capacity upgrade options in response to its obligations under federal law to respond to transmission service requests from wind companies throughout the state. The alignment with the grid needs presented by the Energy Transaction Act is a coincidental benefit to this transaction, as the addition of Western Spirit will make the PNM system better prepared to run on a majority of renewable power.
Land and Right of Way
In 2011, NM RETA and Power Network New Mexico developed several possible transmission line routes. Pattern Energy and NM RETA jointly have worked to select and refine one of these alternatives. Pattern Energy and NM RETA gathered a wide range of information through agency coordination, existing geographic information sources, and field reconnaissance to inform the route. Pattern Energy and NM RETA worked with federal, state, and county agencies, environmental NGOs, and Native American tribes to select a route. The Western Spirit transmission line was sited in a way that minimizes the overall effect of the transmission line on the natural and human environment while avoiding unreasonable and circuitous routes, unreasonable costs, and special design requirements.
Representatives of Pattern Energy will meet with each landowner affected by the Western Spirit project and will take landowner feedback into consideration when determining structure placements and other issues of concern to landowners.
Pattern Energy and NM RETA have worked with a wide range of interested parties to select a route, including federal, state, and county agencies, environmental NGOs, and Native American tribes, and does not expect any substantial changes to the Western Spirit transmission line route. Pattern Energy will meet with each landowner affected by the Western Spirit transmission line and will take landowner feedback into consideration when determining structure placements and possible route adjustments.
Though Pattern Energy strives for 100% voluntarily negotiated property rights, NM RETA was created by the New Mexico state legislature with statutory rights to exercise eminent domain, so long as the property owner is compensated. Pattern Energy and NM RETA have a commitment to use every effort to negotiate in good faith with landowners, with a goal to acquire 100% of necessary right-of-way through voluntary, fairly compensated contracts. However, eminent domain can be critical for financing linear infrastructure in cases where certain landowners are absentee or deceased without heirs, so no living person is available to negotiate. Pattern Energy has acquired 100% of its property rights for previous projects through landowner negotiation and will use every effort to keep a landowner at the negotiation table.
The government of New Mexico created NM RETA as a means to invite private sector investment into New Mexico and to expedite the transition to an economy rich with renewable power. New Mexico provided several means to invite the private sector, including financing support, permitting support, development support, and in certain circumstances the use of eminent domain, so long as landowners are compensated fairly. As NM RETA is a state agency acting on behalf of the citizens of New Mexico, it is tasked with managing its powers and authorities responsibly as it partners with private companies like Pattern Energy to deliver on its mandate to identify the best renewable energy transmission lines for New Mexico, and invite in the private capital and expertise to bring those projects to fruition.
Granting eminent domain is a critical tool of last resort. It enables the opportunity to keep projects moving forward after reasonable efforts have been made to provide a fair market value for property. It is also a way to continue to attract renewable investments, which benefits the economic development of the state.
PNM will not be involved with any of the development or right-of-way acquisition, as the build-transfer agreement requires the line to be fully constructed and operational prior to PNM assuming ownership of the asset. Therefore, even though PNM has eminent domain authority in some instances, PNM’s authority will not be involved in any of the land right acquisition in any form.
Yes. The Western Spirit transmission line has entered into voluntary and mutually agreed-upon contracts to cross the Pueblo of Isleta. The line will also cross land controlled by the Bureau of Reclamation around the Rio Grande river crossing.
Western Spirit Transmission LLC estimates that the Western Spirit Transmission line will be approximately 165 miles long.
A right-of-way is a legal arrangement to allow use of a portion of property for a specific purpose, such as an easement for a transmission line or an access road.
Western Spirit Transmission LLC estimates that the right-of-way for the Western Spirit Transmission line will be 150 feet wide.
Yes, provided that the drill site is not located within the right-of-way of the transmission line.
Yes, provided that the pit is not located within of the transmission right-of-way and does not interfere with the project’s ability to access the line.
No. The easement agreement will specify that NM RETA can use the easement solely in connection with an electric transmission line.
Negotiations for right-of-way agreements will continue in 2019 with construction estimated to begin in 2020.
Yes. Often the length of a transmission line is long enough that tower structures can avoid sensitive areas like wetlands and bodies of water.
We will perform bird surveys to find potential threatened and endangered species, including some species of eagles.
The project is planned to be completed in one phase.
Any changes in the ownership would require the new owner to honor existing agreements.
If used, chemical vegetation management will be compliant with federal, state and/or county-approved control measures. Western Spirit Transmission LLC plans to use local contractors to handle any necessary vegetation management.
Yes, provided that Western Spirit Transmission LLC and its contractors continue to have access to the right-of-way.
Yes. Western Spirit Transmission LLC will acquire easements, but the land will still belong to the landowners and can be used for activities such as farming, grazing, and other activities that do not interfere with the operation of the line.
Farming of row crops can continue under the lines. There will be sufficient clearance under the transmission line to grow full-height crops (up to about 10 feet tall), not including tree crops, and to operate standard farm equipment.
Ranching and grazing are totally compatible and will not be restricted. Less than 1% of the total easement area for the project will be occupied by structure footprints.
Crops less than 10 feet tall may be grown safely under power lines. The easement area can also be used for pasture and grazing lands. Western Spirit Transmission LLC must comply with the public safety standards of National Electrical Safety Code and North American Electric Reliability Corporation Standards to ensure the reliable operation of the transmission line. These standards place restrictions on tree height under and around transmission lines.
Hunting is one of many compatible outdoor recreational activities that can occur within and adjacent to the transmission line right-of-way.
Western Spirit Transmission LLC and NM RETA will acquire an easement from landowners. The easement will grant NM RETA certain surface rights over a specific portion of the property. Participating landowners will not be asked to sell their land. Easement agreements will be negotiated individually with each landowner and will consider many factors including, but not limited to:
- Existing uses of the land (e.g., crops vs. grazing vs. residential)
- Type and number of structures that will be placed on the land
- The requirement for future access rights to the land
- Environmental conditions
Western Spirit Transmission LLC requires that its representatives follow a Code of Conduct, which provides that all representatives treat every landowner with consideration and respect. In addition, Western Spirit Transmission LLC strives to build and maintain long-lasting relationships with landowners by working in a respectful and collaborative manner for the life of the project.
Western Spirit Transmission LLC is committed to compensating landowners fairly and seeks to reach voluntarily negotiated agreements with 100% of the landowners along the line’s route. The landowner compensation package will include an easement payment, based on the size of the easement required and market value of the land, and an additional payment for each structure placed on the landowner’s property. Other payments may be made in certain circumstances, including for:
- Crop damage
- Commercially marketable timber
- Irrigation interference
Western Spirit Transmission LLC will engage a certified independent appraisal firm to determine each easement’s fair market value per acre based on a market data study, which will analyze recent arms-length sales in in the area for similar types of land.
Easement payments are made in two lump sum installments. The first installment is paid upon a landowner’s execution of an option. The second lump sum is paid when Western Spirit Transmission LLC exercises the option.
Western Spirit Transmission LLC and NM RETA will attempt to identify potential routes as far from homes as possible, while also taking into account other routing criteria.
Habitable structures are not allowed within the right-of-way.
No. In order to comply with National Electrical Safety Code requirements and good utility practice, habitable structures may not be located within a transmission line right-of-way.
Western Spirit Transmission LLC will either repair or compensate landowners, at the landowner’s election, for damages to improvements or personal property that occur during the construction or maintenance of the line on their property.
Right-of-way acquisition for a project of this size and located in the State of New Mexico involves both private and State Trust lands; however, the majority of our route passes primarily through private land.
Representatives are available to begin discussion of compensation for easements with affected landowners. A portion of the compensation for easements will be paid as soon as landowners sign an option, and the remainder will be paid prior to or simultaneously with the exercise of the option and recording of the easement. This second installment is expected to be paid prior to start of construction. Structure payments also will be paid prior to start of construction.
Western Spirit is asking that you sign a Survey Consent in order to grant us temporary access to your property for purposes of performing biological, cultural, easement boundary, wetland and geotechnical surveys. These surveys help us determine the feasibility of the route across your property, as well as identify potential issues or areas such as, for example, wetlands, threatened or endangered species or cultural artifacts, that would need to be avoided or mitigated. For more information we have a document that explains the types of surveys we are utilizing.
Signing a Survey Consent does not obligate you in any way to sign an option or easement. If this is a concern, the landowner can add a statement to the “Restrictions or Comments” section in the Survey Consent specifically stating this. A landowner can rescind their signed Survey Consent at any time by sending the Western Spirit team a written note or email.
You can place a time limit (i.e. only for 6 months) on your Survey Consent by expressly writing that in the “Restrictions or Comments” section. You can write in any other specific restrictions, comments or information, and we and our agents must comply with them.
A few examples of such are:
- Grantee must provide 24-hour prior notice before entering the property each time
- Grantee must be accompanied by Owner or a representative of Owner
- Access is only permitted through the southern gate off of Highway 70
- Gate Code is 3214; gates must be left closed at all times
The Survey Consent specifically provides an indemnity to protect the landowner in the event that the Grantee or its agents cause any damage or harm to persons or property as a result of the survey activities.
Yes. All construction crews working on the line are required to have fire suppression onsite. Survey crews will generally have fire suppression in their pickup trucks for safety purposes. When survey crews are traveling on foot however, they are not required to carry fire suppression.
Excess rock will generally be used onsite to support permanent erosion control and/or traffic barriers.
The Renewable Energy Transmission Authority of New Mexico maintains general liability insurance as required by New Mexico state law and regulations. Similarly, Pattern Energy maintains general liability insurance in accordance with good business practices.
The Option Agreement requires that Western Spirit indemnify the landowner for any injury to persons or damages to property, unless it is caused by the gross negligence or intentional misconduct of the landowner. This indemnity survives the expiration of the Option Agreement, even after the Grant of Easement is exercised.
Under the terms of the Option Agreement the Grantee is responsible for all damages to livestock, crops, improvements or other personal property of the landowner caused by the Grantee or its agents.
The easement is granted solely for the purpose of one electrical utility line. It cannot be used for any other purpose.
Existing public roads — Western Spirit may improve and will be required to repair any damage that may occur during the construction of the transmission line. Once the project is placed into operation the public roads will be maintained pursuant to county or state regulations in the same manner as all other public roads in the state.
Existing private roads — Western Spirit may improve and will be required to repair any damage that may occur during the construction of the transmission line. Once the project is complete existing private roads will be maintained by their owner.
New access roads constructed by Western Spirit – Western Spirit will maintain all roads constructed by the project and used as long-term access roads for the transmission line.
Erosion control will be managed in accordance with the Stormwater Pollution Prevention Plan (SWPPP) permit for the duration of construction. This will include straw wattle, sand bags, berms, etc. in disturbed areas to mitigate erosion. It is also worth noting that we are also developing a set of standard best management practices with the Claunch-Pinto Soil and Water Conservation District and New Mexico State Forestry stakeholders to address erosion control, stormwater management, reseeding, impacts to streams, vegetative management and invasive weed management.
The Option Agreement includes a right of access to the Property to the Grantee. Such entry is at the Grantee’s risk, as the Grantee waives any claims against the landowner unless it is caused by the gross negligence or intentional misconduct of the landowner.
Yes. Construction water will be needed throughout construction for dust mitigation as well as grading/excavating.
NM RETA originally identified the best routes for a “collector system” of renewable energy in central New Mexico in 2010, in a process that included the Western Spirit right-of-way. Western Spirit has been in development with NM RETA since 2013, but development efforts have increased substantially since Pattern Energy partnered with NM RETA in 2018.
The New Mexico legislature created NM RETA by statute in 2007 as a governmental instrument to identify the best routes for transmission for the people of New Mexico as we move to an economy rich with renewable energy, and then to invite investment from the private sector to help finance, plan, acquire, maintain and operate certain renewable transmission and energy storage facilities. NM RETA has worked with several companies in the past, but Western Spirit will be the first project that NM RETA brings to construction and commercial operations.
Under its lease agreement with Pattern Energy, NM RETA will:
- Coordinate with Pattern Energy regarding project development
- Coordinate and assist in obtaining all material permits
- Jointly develop the route with Pattern Energy and advise on any suggested adjustments or refinements
- Assist in the negotiation of all rights-of-way and easements
- Execute all required easements and other real estate agreements
Yes. In the past NM RETA had other private development partners, but Pattern Energy is now the sole private company co-developing Western Spirit, and is on track to bring the project to fruition by 2021.
Other Projects & Companies
No. SunZia and the respective wind farms under development by Pattern Energy are legally and electrically distinct from Western Spirit. Pattern Energy still owns the capacity rights for the SunZia transmission line and continues to work with Southwestern Power Group to bring SunZia to fruition, but the two sets of projects are distinct from one another.
Both BB2 and Western Spirit represent requests to PNM for new transmission service, and under FERC rules, PNM is required to provide that requested service. The difference between these two particular projects is how the FERC methodology determines the customer rates should be structured. For Western Spirit, the cost of moving the power on this new line is higher than the current average cost to move power on PNM’s system, and integrating the project into the overall rate structure would increase the cost to all customers. FERC methodology aims to hold existing customers harmless, so in the case of Western Spirit it says to keep the project separate from the overall rate structure and have the customer pay for the new project separately. In the case of BB2, the integration of the project into the overall rate structure would actually result in a lower average cost to customers, so FERC methodology says to integrate the project into the overall rate structure and share that benefit among all customers.