THE TRES AMIGAS SUPERSTATION

NMFA OC Meeting

August 27, 2013

UNITING THE NATION’S ELECTRIC POWER GRID

2

The Location: Regional Renewable Resource Potential

Source: NREL

US Population Map

Three Electrical Grids with 2010 Census Population Density (1 Dot = 2,000)

3

The US Density Table

4

0

200

400

600

800

1,000

1,200

U

nited S

tate

s

Ala

ska

Wyom

ing

Monta

na

Nort

h D

akota

South

Dakota

New

Mexic

o

Idaho

Nebra

ska

Nevada

Uta

h

Kansas

Ore

gon

Main

e

Colo

rado

Iow

a

Okla

hom

a

Ark

ansas

Arizona

Mis

sis

sip

pi

Min

nesota

Verm

ont

West V

irgin

ia

Mis

souri

Ala

bam

a

Texas

Washin

gto

n

Louis

iana

Wis

consin

Kentu

cky

New

Ham

pshire

South

Caro

lina

Tennessee

Georg

ia

Mic

hig

an

India

na

Nort

h C

aro

lina

Vir

gin

ia

Haw

aii

Illin

ois

Calif

orn

ia

Ohio

Pennsylv

ania

Flo

rida

New

York

Dela

ware

Mary

land

Connecticut

Massachusetts

Rhode I

sla

nd

New

Jers

ey

Po

pu

lati

on

per

sq

ua

re m

ile o

f la

nd

are

a

2010 State Population Density

New Mexico Rank by

State Population

2000: 36

2010: 36

Source: US Census Bureau; excluding District of Columbia

AC Transmission Lines

5

US TNME

Mid-

C

NP1

5

SP1

5 PV

Mktp

l.

IPP

BC

Hydr

o

ERC

OT

MRO

SPP

NPC

C

RFC

SER

C

FRC

C

4C

TA

6

Rail lines and State Highways

7

TNME Key Points

Key Points:

• New Mexico is well recognized for its abundant renewable energy

resources.

• Resources will remain undeveloped unless transmission can be built to carry

that power to locations where it is needed.

• The New Mexico Express project could provide significant transmission

capacity to accomplish that purpose and accordingly could benefit the

economy of our state in a substantial way

State Economic, Environmental and Policy Benefits of TNME

The benefits of building a buried HVDC superhighway in New Mexico entail:

• Economic Benefits

• Enhanced Reliability

• Increased Market Efficiency

• Consistent with National Energy Policy

8

State Map of TNME

9

TNME will create significant benefits for the New

Mexico economy

During construction, TNME will bring hundreds of new jobs to the

state

• TNME’s in-state spending will not only bring benefits to the construction

sector but also other sectors of the economy that service and support the

construction and utility industries

TNME will motivate new generation investment in New Mexico, by

providing these generators with transmission access to markets to

the East and West

• New generation investment will spur the economy – creating the

potential for thousands of new jobs and expanding the state’s GDP

TNME’s positive impact on the state economy will continue even

after construction is complete

• TNME proposes to generate revenue for the state through a service fee

paid by shippers

• TNME’s sponsors are committed to involve local workforce to operate

and maintain the transmission

10

Construction and operation of TNME will create jobs

and expand economic activity in New Mexico

Bureau of Economic Analysis data predicts that for every $100 million in construction-related

spending, the state economy will expand by $190 million and 1,800 new jobs

11

TNME

project

Increase payments

to government

(sales tax, income

tax)

Hire more workers,

increase salaries of

current employees

Buy more raw

materials from local

suppliers

Invest in new

capital to expand

production

capacity

Induced effect Local firms see increased

demand for their products

and services

Workers spend

locally (restaurants,

health care, banks,

lodging,

entertainment,

recreation, etc.)

Indirect effect Other local

businesses benefit

Local firms that

receive payment

from TNME for

services can hire

more workers, who

also spend more

locally

Labor:

engineers and

construction

workers’

salaries

Non-Labor:

payment for

material and

services, as well as

purchase of

locally-procured

equipment

Direct spending Local construction

businesses benefit

TNME will create opportunities for additional local

investment in renewables – benefiting New Mexico

12

$0

$100

$200

$300

$400

$500

$600

$700

Constructions Operations

State GDP

Mill

ion

s

Direct

Indirect

Induced

$28

0

1,000

2,000

3,000

4,000

5,000

6,000

Constructions Operations

Jobs

Direct

Indirect

Induced

5,099

166

1,000 MW of new wind serving 9.4% of New Mexico’s (2011) consumption

0

5,000

10,000

15,000

20,000

25,000

Constructions Operations

Jobs

Direct

Indirect

Induced

19,770

296 $0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

Constructions Operations

State GDP

Mill

ion

s

Direct

Indirect

Induced

$1,799

$25

1,000 MW of new solar serving 8.9% of New Mexico’s (2011) consumption

• 1,000 MW of new wind

installation in 2020 at a

total investment cost of

$2.6 billion– NREL

estimates that about 17%

or $443 million would be

spent locally in-state, as

well as $18 million in

annual operating costs

• 1,000 MW of new solar

capacity at a total

investment cost a $2.4

billion overall investment at

current estimated capital

costs – NREL estimates

that about 48% or $1.1

billion will be spent

locally in-state, as well as

$19 million in annual

operating costs

$652

Source: NREL, Land-based Wind JEDI Model, rel. W1.10.03, assuming capital costs of

$2,592/KW and O&M costs of $20/KW

Source: NREL, Solar Project PV Model rel. PV10.17.11., assuming capital costs of

$2,361/KW and O&M costs of $20/KW

TNME is proposing a shippers pay a servie fee, which

will then be remitted to New Mexico

Estimated service fee revenues

compare favorably to other tax

revenue streams the state

currently receives – assuming a

80% utilization of TNME and a

$1.0 /MWh service fee rate,

expected service fee revenues

total $14 million per annum

More than 17 times New

Mexico’s total 2012 public

utilities license

53% of New Mexico’s total

2012 public utilities sales tax

23% of New Mexico’s total

2012 property tax

13

$14

$1

$27

$60

$0

$10

$20

$30

$40

$50

$60

$70

Tres Amigas Revenues (80%

utilization at $1.0 / MWh service fee

rate)

New Mexico Total 2012 Public Utilities

License

New Mexico Total 2012 Public Utilities

Sales Tax

New Mexico Total 2012 Property Tax

Millio

ns

Tres Amigas expected tax revenues compared to other New Mexico taxes

Implied Energy Flows (TWh)

8.8 10.5 12.3 13.1 14.0 15.8 17.5

Assumed Utilization Rate

50% 60% 70% 75% 80% 90% 100%

$0.25 $2.2 $2.6 $3.1 $3.3 $3.5 $3.9 $4.4

$0.50 $4.4 $5.3 $6.1 $6.6 $7.0 $7.9 $8.8

$0.75 $6.6 $7.9 $9.2 $9.9 $10.5 $11.8 $13.1

$1.00 $8.8 $10.5 $12.3 $13.1 $14.0 $15.8 $17.5

Serv

ice

Fee R

ate

($/M

Wh

)

Revenues Collected, in millions per annum

14

Tres Amigas SuperStation….

Uniting the Electric Grid