Nogales Interconnection Project

 

In what would be a first for Santa Cruz County, two utility companies are proposing to build a $60-million system to connect the area’s electricity grid with northern Mexico.

UniSource Energy Services says the project would make the local power grid more reliable and could lower prices for consumers. For Hunt Power, a Dallas-based utility infrastructure firm, the new system would act as a toll road and generate revenue from providers that ship electricity back and forth across the border.

The project involves building a 138-kilovolt transmission line from the Valencia substation near the Walmart store in Nogales to a new 10-15 acre gateway substation to the west of Interstate 19 and north of Mariposa Road, according to information provided at two public meetings last week.

From the gateway station, a 230-kilovolt transmission line would run south along the city’s limit with the Coronado National Forest to the U.S.-Mexico border, where it would connect to the Mexican power grid on the west side of Nogales, Sonora.

If the extensive permitting process is successful, which includes a presidential permit to cross the international border and a conditional use permit from the City of Nogales, the transmission line would be up and running in 2018, said Arlo Corwin, project manager for Hunt Power.

“The project is first and foremost a reliability project,” Corwin said at a public meeting in Nogales last Thursday evening, noting the city is located “at the end of the U.S. grid.”

The 150-megawatt direct current interconnection, known as a “DC tie,” would link Nogales’ power grid to the Comision Federal de Electricidad grid in Sonora to create a “loop” that provides a redundant source of power.

“It works both ways. It can provide emergency response to either north of the border or south of the border,” Corwin said.

In the case of an outage in Mexico, UniSource could use the converter station to “jumpstart” its system, he said. If Nogales has power problems, “we can pull power back from Mexico to start this side of the system.”

Two transmission lines connect San Luis, Ariz. and San Luis, Sonora, with one used for emergencies and the other supplying power to four industrial customers south of the border, according to a 2013 white paper from the Arizona Mexico Commission.

The emergency line supplied San Luis, Sonora with power for 22.5 hours following a 2010 earthquake in Baja California.

Questions remain

When asked after the meeting whether the DC tie would protect Nogales’ power grid from the much larger grid in Nogales, Sonora, Ed Beck, a representative of UniSource and its sister company Tucson Electric Power, said it would act as a “fuse” in the case of a power surge or drain from Nogales, Sonora and shut off the flow of electricity.

The project also could lower rates for local customers if the new system increases the amount of electricity on the grid, Beck said during the meeting.

“That increased usage will lower, basically, the unit cost for us to serve our customers, which includes all the residential customers,” he said.

Some in the audience said they still have unanswered questions.

Jim Patterson of Tubac said he still has a “wait and see” attitude, noting the project does not appear to have any specific buyers or sellers yet. “I would like to know more about either end,” he said.

Rich Bohman, another Tubac resident, said greater reliability would benefit the Santa Cruz County community, but he wondered about the companies’ reasons for investing so much money in the project and what their “longer-range plans” are.

At last Wednesday’s regular meeting of the Nogales City Council, produce importer Jaime Chamberlain, owner of J-C Distributing, cautioned the council members to consider where the lines will be installed when the companies apply for a conditional use permit.

Reliability and sustainability in the electrical grid are “fantastic,” Chamberlain said, but he cautioned the council members to keep a close eye on which properties will be affected and the “extremely important” wording of right-of-way agreements.

City Attorney Jose Luis Machado pressed UniSource representative Lawrence “Larry” Lucero on whether the project would satisfy an order from the Arizona Corporation Commission to create a redundant feed to Santa Cruz County.

More than a decade ago, UniSource tried to install a second transmission line to achieve that goal, but the company ran into problems with the U.S. Forest Service, Lucero said.

Instead, UniSource built the Vail to Valencia line, which increased the electrical feed to the county and satisfied the ACC’s requirements in the short-term, he said.

“The opportunity to create the original concept, which is a redundant feed, is now a possibility with this project,” Lucero said.

Mexico connection

The United States and Mexico have traded electricity since 1905, when remote towns needed help getting power, but modern projects have been rare and small-scale, according to the U.S. Energy Information Administration.

Cross-border lines already exist between California and Baja California, as well as between Texas and Tamaulipas and Chihuahua.

Those transmission lines account for one-hundredth of 1 percent of all electricity used in the United States, according to the EIA, but Mexican electricity exports to the United States could increase with a wind-farm in Baja California operated by Sempra International to supply California.

At last Thursday’s public meeting, former Nogales Vice Mayor Nubar Hanessian asked if the new system would connect with a specific power plant, recalling a proposal about six years ago to build a power plant in Mexico to serve customers north of the border.

“That’s the only way I can see how you’re going to make money. Is that the idea, to connect to a power plant in Mexico?” he said.

“We don’t have a specific power plant in mind,” Corwin said, adding Hunt Power is looking at the project from the “macro” level. “There’s a lot happening in Mexico and we believe there will be new opportunities with that market.”

The idea is to “simply interconnect with CFE at a substation. There are a couple of choices in Nogales, Sonora just south of the border,” Lucero said.

“Ultimately, for us to receive revenue, we would have to have agreements with power companies that would want to move power across the tie like a toll-way, basically. That’s our business model,” Corwin said.

Thursday’s meeting was part of a public outreach effort by UniSource and Hunt Power. The next step in the project will be to “conduct feasibility and design,” followed by federal, state and local permitting that may include more public outreach.

For more information on the project see www.huntpower.com/nogalesdctie.aspx.

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