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Arizona-Mexico energy panel examines cross-border transmission

Arizona-Mexico energy panel  examines cross-border transmissionArizona is taking the first steps to explore a future where energy flows across the state’s southern border and creates a more integrated power grid that bolsters energy markets, strengthens the border region’s energy industry and responds to the abundant solar energy resources of the Southwest.

The bi-national Arizona-Mexico Commission Energy Committee was established by Gov. Jan Brewer in May 2011 to research ways to increase energy efficiency, promote renewable energy and encourage the development of commercial energy entities to support those goals.

At one of the committee’s meetings this past June, Brewer and Gov. Guillermo Padrés Elias of Sonora discussed how changes in Mexico’s energy laws could allow its state-operated utility to purchase energy from U.S. firms. That spurred a more focused task force to look into cross-border transmission of electricity, particularly solar-generated electricity.

During a Nov. 28 solar energy conference in Phoenix, Leisa Brug, energy policy adviser to Brewer and one of the committee co-chairs, outlined the direction the group will take.

“We’re kind of at a tipping point, where things have been freed up on the Mexico side of the border and we have the technology here,” Brug said. “Energy and the sun know no borders, and so nor should we, when it comes to energy, especially when it benefits people on both sides of that man-made border.”

Brug said it’s still early to be certain, but one of the main benefits of cross-border energy transmission could be lower costs for Mexican consumers, who now pay around three times the cost of electric energy in Arizona.

And with new solar projects being launched by Mexico, the transmission could come the other way at some point, too, Brug said.

“Today, if we had a transmission line, we could be in a position to sell much-needed energy to Mexico,” Brug said. “A few years in the future, we would love for Sonora to be in a position to sell us energy.”

Marty Shultz, senior policy director for Brownstein Hyatt Farber Schreck and former vice president of Pinnacle West Capital Corporation and Arizona Public Service, said an added benefit to a cross-border transmission line would be new projects for the much-slowed energy industry in Arizona.

Whereas growth in Arizona is not what it was before the economic downturn, and there won’t be much need for additional energy infrastructure for several years, a new market south of the U.S.- Mexico border could provide a boost for the industry.

But a cross-border energy transmission project is no small task.

Shultz said that while he was with APS, the company’s cross-border energy line work showed that the process can be weighed down by bureaucratic oversight.

Demonstrating demand for imported energy in Mexico, Brug said, is one of the most pressing considerations. That will be one of the key areas of research for the group.

John Hoopes, vice president at Salt River Project and one of the committee’s co-chairs, is cautious about the prospect of a cross- border transmission line, stressing that the committee will need to research not only the demand for imported energy, but also the determination of a location for the transmission site.

“Beyond construction itself, the most daunting task is to find feasible corridors for the transmission,” Hoopes said. “Transmission, assuming that’s necessary, appropriate and feasible, involves unique concerns. There are a lot of federal lands along the border. That raises all kinds of concerns.”

Hoopes said that while he’s eager to begin researching what’s possible, the group is still in such an initial phase of its work that he doesn’t want to make promises about what will happen in the future.

“This transmission task force is in the most preliminary of steps in assessing what transmission needs might be,” he said.

The transmission task force will meet in January, and Brug said she’s hopeful that the group could produce a report on the feasibility of a project by the end of 2013.

If the group determines that a cross-border transmission project is appropriate and workable, Brug said the Arizona Corporation Commission would need to be involved in approving it. From there, either a public or private development project would need to take it up.

Brug said the bottom line is that building on the already strong economic relationship with Mexico’s border states will only help to boost the economy of both partners and create valuable infrastructure and jobs.

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