Opponents: Project would give Tres Amigas monopoly on power market

Courtesy illustration Tres Amigas filed with the Federal Energy Regulatory Commission in December, seeking approval to charge negotiated transmission rates.

By Sharna Johnson: CNJ staff writer

Opponents are lining up against a proposed electric superstation in Curry County, arguing the project would give Tres Amigas a monopoly on the power market.

Tres Amigas filed with the Federal Energy Regulatory Commission in December, seeking approval to charge negotiated transmission rates.

Negotiable rates would make it possible for the company to sell access to its transmission to power brokers who could buy cheaper electricity in one area and sell it in other areas of the country where prices are higher, according to a Feb. 3 article in the New York Times.

Opponents argue such an arrangement could cost consumers more.

They also say it would put local power companies selling higher-priced power to consumers at a disadvantage because they couldn’t compete with marketers buying at lower prices and routing their power through Tres Amigas.

“(Opposition is) not unexpected, this is a normal course of business,” Tres Amigas CEO Phil Harris said Monday.

The transmission project “has attracted both eager allies and some determined foes,” according to the New York Times article.

Among foes, Public Service Electric and Gas Company of New Jersey filed Thursday with the FERC for a clarification of Tres Amigas’ request, referring to “conflicting and confusing” statements by Tres Amigas in its efforts to seek negotiable rates.

The most aggressive opposition has come from Occidental Petroleum, which has called for the FERC to dismiss the project or call for lengthy evidentiary hearings.

Occidental has said the project would give Tres Amigas market power because it is a unique facility and plans to expand make it anti-competitive.

Harris said it is not surprising that “the fourth-largest oil and gas company in the U.S. does not want renewable energy developed.”

“We’re actually glad they’ve come out… we wish they would have supported us because there’s a lot of advantages. We think everyone wins with Tres Amigas, including gas and oil.”

Occidental Spokesman Eric Moses declined comment Tuesday, referring inquires to the companies filings with FERC.

In a Feb. 1 filing with the FERC, Occidental argued the reliability of the Tres Amigas system hadn’t been proven and the project raised significant concerns about ensuring reasonable rates for consumers.

Harris said negotiated transmission rates are vital because they are how Tres Amigas will pay back investments in the project.

The superstation has been lauded as a power solution for the nation, placing New Mexico at the forefront of renewable energy development.

Among supporters, Gov. Bill Richardson has said the project could mean billions of dollars being spent locally by the company and it would bring countless construction jobs to eastern New Mexico.

In all, Harris said, there were 56 filings from entities supporting Tres Amigas — ranging from municipalities to legislators and energy companies — and five against.

Harris said word could come any day on the FERC’s decision.

“We’re all hopeful that they will rule in favor,” he said.

Once this stage is passed, Harris said the next goal is to announce a construction schedule, perhaps as early as September.