The Public Utilities Commission of Nevada on Sept. 30 approved an agreement between NV Energy and LS Power affiliates that would increase NV Energy’s capacity on the 500-kV One Nevada Transmission Line (ON Line).
The transaction is tied to the California ISO’s selection of a transmission developer to build a new 500-kV line in Nevada that would connect the Harry Allen substation with the Eldorado substation – the so-called HAE project.
LS Power affiliate DesertLink is one of the three firms looking to build the project, along with Exelon Transmission Co. and NextEra Energy Transmission West, in collaboration with Southern California Edison.
In a Sept. 11 market notice, the California ISO said it will select which project sponsor will build, own, operate and maintain the HAE project. The California ISO did not provide a schedule for that selection, but LS Power expected it to come no later than the end of January 2016, an LS Power spokesperson told TransmissionHub Oct. 2.
The PUCN draft order, which the PUCN approved at its Sept. 30 meeting, approved the stipulation that modifies a transmission use and capacity exchange agreement among NV Energy and LS Power affiliates Great Basin Transmission and Great Basin Transmission South.
The stipulation also covers a license and sale agreement that grants LS Power affiliate DesertLink Holdings a license to use Nevada Power property rights and unused transmission assets in the Sunrise Corridor, according to the PUCN order (Docket No. 15-06019).
NV Energy, a unit of Berkshire Hathaway, came about following the merger of Nevada Power, Sierra Pacific Power and Sierra Pacific Resources.
The stipulation calls for an increase in the base transmission allocation of Nevada Power and Sierra Pacific on the ON Line from 760 MW to 900 MW. NV Energy and Great Basin Transmission South own the ON Line, which went into service in 2014.
The stipulation also improves the likelihood that Nevada Power customers would obtain value for property rights to develop the HAE project, according to NV Energy’s application to the PUCN. The license and sale agreement will produce a benefit to utility customers in a manner similar to the sale of property by monetizing the property rights in support of DesertLink’s bid to build the HAE project, NV Energy told the PUCN.
The deal also includes an operations and maintenance agreement under which Nevada Power would perform O&M services for DesertLink for the HAE project.
“The stipulation is a consensus resolution of the issues pursuant to the parties’ negotiations and is a reasonable recommendation and resolution of the issues in this proceeding,” the PUCN said in the draft order.
The stipulation said that if the Cal-ISO seeks to shift costs associated with the HAE project either directly or indirectly to NV Energy or Sierra Pacific by modifying the inter-regional allocations through regional planning, the utilities “will participate fully in the regional planning process and vigorously protect the interests of Nevada customers.”
The HAE project was identified by the Cal-ISO in 2014 as an economically driven project to move power between the Eldorado substation, primarily owned by SCE, and the Harry Allen substation, which is owned by NV Energy.
The project would reside within the Cal-ISO balancing area authority and transactions over the HAE project would be performed by the Cal-ISO, NV Energy said in its application. The Cal-ISO announcement of the project “created an opportunity for Nevada Power and Sierra Pacific to reduce the cost of providing service to Nevada electric customers without any risk of increased cost,” the company said.