Pathfinder Wind, DATC partner on Zephyr transmission project

Wheatland – On Dec. 15, 2011, Pathfinder Power Transmission, LLC sold the Zephyr Power Transmission Project to Duke American Transmission Company (DATC), which will develop, construct, own and operate the line.
     Duke and the American Transmission Company (ATC) are utility companies that formed a partnership in 2011 to develop transmission opportunities away from each of their existing retail and franchise territories.
    DATC will now take over the Zephyr project, which is planned to be a 950-mile direct current transmission line that starts in Chugwater and would move 3,000 megawatts (MW) of wind energy to California markets through a Nevada route, terminating in the Eldorado Valley just south of Las Vegas, Nev.
    Although Pathfinder Power Transmission will no longer share ownership in the line, Pathfinder Renewable Wind Energy, LLC has contracted about 70 percent of the line’s capacity. The line will connect with Pathfinder Wind’s wind generation project on more than 160,000 acres near Chugwater, and an open season will determine subscription for the remaining 900 MW of capacity on the line.
About DATC
    Duke is an investor-owned company headquartered in North Carolina that has a focus on retail utilities in four states and maintains 21,000 miles of transmission lines. ATC is dedicated to transmission and is headquartered in Wisconsin. After forming in 2001, the company invested $2.5 billion in new transmission over the last decade.
    “Duke and ATC share a vision that transmission is an enabling technology,” said Duke Energy Senior Vice President for Transmission Development Phillip Grigsby. “Transmission can bring lower cost electricity to places where costs are high.”
    Grigsby was present at a Jan. 26 meeting in Wheatland, where Pathfinder and DATC representatives informed area stakeholders of the partnership.
    Grigsby said the projects in which the partnership looks to invest have a focus on improving reliability on the grid, or moving lower cost resources to higher cost markets.
    “We also think transmission is important in integrating wind energy,” he added. “It’s necessary in order to move high quality wind resources to the load centers that will use the electricity.”
Zephyr will remain direct current
    Grigsby said the main advantage of using a high voltage direct current (HVDC) line is because the project will be long, without intermediate dropoff points.
    “If we had intermediate markets, DC wouldn’t be cost effective, because we’d need converter stations along the line, and they represent a large amount of the cost in projects like this,” he explained. “Because we don’t have intermediate markets, DC could be very effective, because of lower line losses and it can more efficiently move 3,000 MW of wind energy.”
Zephyr’s route will be
examined
    Of Zephyr’s current proposed route, Grigsby said DATC will take another look at its path to make sure it’s right.
    “The existing route may not be the most efficient. We want to work with stakeholders to make sure we find the path that works the best and is the most cost-effective and efficient to make the project a success,” he explained.
    He continued, “Our philosophy is that we want to be as open and transparent in the process as we can. The last thing we want to do is create animosity in the community. We’ll do our best to find ways to route our project in such a way that it will have the least impact on a community, or at least in a way that a community can agree is optimal.”
Zephyr scheduled for 2020 in-service
    Currently the targeted in-service date for the transmission line is 2020, with construction beginning in 2017.
    “We’re working closely with Pathfinder and other sharers on the line to meet that schedule,” said Grigsby.         “We believe strongly in renewable integration projects,” continued Grigsby, mentioning Pathfinder Wind. “We can’t develop in isolation from each other – we have to work together with the stakeholders in the market. That’s our guiding principle.”
    “We’re committed to working together as an integrated project, and will continue as we reach out to other stakeholder groups beyond Wyoming so we can complete a project that meets the requirements of the generation, transmission and the broader community of customers to move energy into a high value market,” said Grigsby.
    Christy Martinez is managing editor of the Wyoming Livestock Roundup and can be reached at christy@wylr.net.

Natural gas plays a role in Zephyr
    At the Jan. 26 stakeholders’ meeting in Wheatland, where members of Pathfinder Renewable Wind Energy and Duke American Transmission Company discussed the future of the Zephyr Power Transmission Project, Brian Case of General Electric also spoke about using Wyoming’s natural gas supply to firm up wind-generated energy.
    “We’re in a unique time in the U.S. power industry – in fact, we’re sitting on about 100 years of natural gas supply,” said Case. “The Zephyr project is a great opportunity to use more of America’s resources.”
    Case said the nice thing about the natural gas component of wind energy transmission, and the technology being developed at GE to support the industry, is that the company now develops gas turbines that are made to integrate with renewable energy.
    “Having generation that can turn on and off to support wind is very important,” he commented. “Our gas turbines are jet engines that have the ability to turn on and get up to full speed in 10 minutes. That’s the technology we’re developing, and we’ll continue to invest in technology to further develop and optimize the wind resource.”
    Although the exact type of unit that would be in use hasn’t been fully determined, Case estimated each one would use 90 to 112 million cubic feet of natural gas per day.
    “That would produce about 680 megawatts of power, so it would depend on the need on the transmission line, which would dictate how we would size the plant,” he said.
    “We’d be the largest consumer of natural gas in Wyoming, and we’d increase consumption within the state’s borders by 50 percent,” added Pathfinder Renewable Wind Energy Managing Partner Jeff Meyer.
    “We can take some of Wyoming’s gas and help create energy, balance the transmission line and provide supplemental power,” he said. “We can take Wyoming’s natural resource and satisfy an insatiable demand for renewable power. This project has the market dynamics going for it.”

Meyer explains tax situation
    Jeff Meyer, managing partner in Pathfinder Renewable Wind Energy, says his company is in agreement on the total amount of the taxes his company will pay for wind development in Platte County, but he says the disagreement is when they should be paid.
    “The 3,000 megawatt project will represent close to $1 billion in taxes paid over the 30-year life, or about $30 million per year for Platte County, and a little more than half of that would stick in the county,” says Meyer. “With an annual operating budget for the entire county projected to be $12.1 million in 2012, Pathfinder would almost double the entire budget per year, every year.”
    He says the disagreement is not over the total dollars, but when they should be paid.
    “The status quo model calls on us to pay $300 million of the $1 billion before we even start generating our first electron for the California market, and because of that we can’t get bank financing,” he explains of the project’s current status.