Western Area Power Administration’s Transmission Infrastructure Program and a group of electricity providers in Arizona committed to build a large-scale transmission project in Arizona’s Maricopa and Pinal counties. Financed through Western’s authority to borrow funds from the U.S. Treasury, the project will increase transmission capacity to deliver renewable energy, primarily solar, to consumers in Arizona, southern Nevada and southern California.

The Electrical District No. 5 – Palo Verde Hub Project will connect a renewable-rich zone south of Phoenix, Ariz., with the Palo Verde market hub, a major electrical trading hub in the western United States.

“ED5-PVH uses Western’s borrowing authority as a tool to help meet the needs of our customers and the growing energy demand in the region,” said Western Administrator Tim Meeks. “The project will also enhance the reliability of the grid and foster our Nation’s energy independence by providing access to more solar energy.”

Western will borrow up to $91 million from the U.S. Treasury to complete the project. The environmental assessment and Finding of No Significant Impact were completed and signed Aug. 9, as required by the National Environmental Policy Act.

"Renewable generation has been slow to develop in Arizona between Phoenix and Tucson because of limited transmission availability. ED5-PVH provides affordable, new transmission capacity from a high-potential solar area to an important power marketing hub in Palo Verde," said Todd Rhoades, a Western project manager working on the effort.

Upon completion in 2015, ED5-PVH will be able to deliver 254 MW of renewable energy to the Palo Verde market hub. This is enough to serve nearly 13,000 homes or 50,000 people. In total, up to 410 MW of bi-directional capacity will be added to the grid. The project will also support about 300 jobs in the local area during construction, which is scheduled to start late this year.

"Western's participation in this project through TIP greatly facilitates bringing stakeholders together and getting needed transmission built in Arizona to support renewable energy development," said Kris Mayes, former chair of the Arizona Corporation Commission. "The ACC is pursuing numerous projects to increase renewable energy development here because of Arizona's vast solar energy potential, and transmission projects like this one are necessary to make the delivery of renewable energy feasible."

The project, planned and developed in cooperation with current Western customers and other electricity providers, is comprised of two parts:

• Purchasing transmission capacity rights on the 500-kV Southeast Valley Project transmission line between Western’s Test Track substation and the Palo Verde market, a distance of 64 mi.
• Building 45 mi of new 230-kV transmission line from the Test Track substation to Western’s Electrical District No. 5 substation south of Phoenix. This consists of:
  --Adding a new 230-kV circuit to an existing Western 115-kV transmission line running from ED5 to Casa Grande substation, which is already scheduled for an upgrade
  --Attaching a 230-kV circuit to a planned SEV Project 500-kV line from Western’s Test Track substation to where it intersects with the existing line

By making use of existing rights of way, ED5-PVH minimizes cost, project length and land use impacts.

This is the third project Western has approved since receiving borrowing authority under the 2009 American Recovery and Reinvestment Act’s amendment to the Hoover Power Plant Act of 1984. The law is designed to create transmission projects that help deliver renewable energy in Western’s 15-state service territory.

Solar project, transmission upgrade founded on partnership
Western first received a proposal for the project in May 2010 from the Southwest Public Power Resources Group, a collection of public power companies that include several Western firm electric and transmission service customers of the Parker-Davis Project.

“Western’s cooperation with its customers and the tools available to Western under TIP are vital in getting the project built in a cost-effective and timely manner. This project is the right solution for meeting the load growth needs of SPPR members and facilitating the development of renewable energy in the region,” said Patrick Ledger, Arizona Electric Power Cooperative CEO and SPPR Management Committee chairman.

“Partnerships like the one we enjoy with SPPR are vitally important to Western achieving its goals,” said Meeks. “With this project, Western is responding to our customers’ requests to upgrade our transmission system to serve their future load growth requirements while simultaneously right-sizing a project to facilitate the future development of renewable energy. ED5-PVH also holds fast to the principle of ‘beneficiary pays’ by ensuring that those that benefit from this project are responsible for repaying the cost of the project.”

Project beneficiaries will generate enough revenue to repay the government’s investment and accrued interest and cover all operating expenses during the project’s service life.

Arizona utility Electric District No. 4, a SPPR member, has signed an agreement to purchase transmission capacity across the ED5-PVH project for the next 50 years. ED4 has signed re-assignment agreements with a number of other SPPR member utilities for portions of their capacity purchase.

"The transmission capacity is a critical component for our utility’s success,” said Ron McEachern, General Manager for ED4. “ED4 will use the capacity to transmit power from Palo Verde to its loads, or customers, and to the loads of other SPPR participants for the next 50 years.