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FERC on May 20 rejected SunZia Transmission LLC's request (EL10-39) for negotiated rate authority and priority rights over its proposed 460-mile transmission project because the plan is inconsistent with commission precedent and policies.
However, because the proposal is "an innovative approach that has the potential to advance" FERC's goal of providing location-constrained resources with access to markets, the commission described how the plan could be restructured to meet the agency's requirements.
The project in question, which is in the preliminary stages of development, will consist of two 500-kV transmission lines running between Lincoln County, N.M., and Pinal County, Ariz., and will have a capacity of 3,000 MW or 4,500 MW, depending on the final configuration of the lines.
SunZia, which is owned by Southwestern Power Group II LLC, ECP SunZia LLC, Shell WindEnergy Inc. and Tucson Electric Power Co., will own 86% of the project, while the Salt River Project will own 13% and Tri-State Generation and Transmission Association Inc. will own 1%. SunZia's 86% share of the project in turn will be divided among that company's owners, with SW Power, ECP SunZia, Shell and Tucson Electric holding ownership shares of 40%, 40%, 5% and 1%, respectively, reflecting each company's investment in the project.
In January, SunZia asked FERC to confirm that each of its owners may be allocated firm transmission rights on the line in accordance with its investment share in the project, and that SW Power, ECP SunZia and Shell each may use its allocated capacity to serve affiliated generators that are qualifying facilities or exempt wholesale generators without jeopardizing those affiliates' QF or EWG status. SunZia further requested that FERC allow SW Power and ECP SunZia to allocate their full pro rata shares of the project's capacity through pre-subscribed negotiated rate contracts.
FERC's order
While the commission's...