By Amanda Durish Cook
CARMEL, Ind. — MISO said Tuesday it has selected NextEra Energy Transmission Midwest to construct the Hartburg-Sabine junction 500-kV project in East Texas, wrapping up months of evaluation.
The announcement for MISO’s second-ever competitively bid transmission project comes more than a month ahead of a year-end deadline for a decision. The RTO’s studies concluded the project will alleviate longstanding congestion issues and import limitations near the Texas-Louisiana border.
NextEra proposes to spend $115 million to build a new 23-mile 500-kV transmission line, four short 230-kV lines and the new Stonewood 500-kV substation, which will connect the longer line with the existing Hartburg substation to the southwest. The company estimates the project will have a 2.20:1 benefit-cost ratio and be in service by June 1, 2023. NextEra Transmission Midwest is a subsidiary of Juno Beach, Fla.-based NextEra Energy.
MISO issued the request for proposals in early February with a July 20 deadline for developers’ proposals. The RTO in September said it was evaluating 12 complete proposals. (See MISO Evaluating 12 Proposals for 2nd Competitive Project.)
“NextEra’s proposal offers an outstanding combination of low cost and high value, with best-in-class cost and design, best-in-class project implementation plans and top-tier plans for operations and maintenance,” MISO said in its selection report. The RTO’s Tariff requires it to evaluate proposals based on cost and design (35% consideration), project implementation (30%), operations and maintenance (30%) and transmission planning participation (5%).
NextEra’s proposal scored 97 out of a possible 100 points, with other developers scoring between 95 and 40 points, the lowest still within the “acceptable” range. The RTO’s competitive development rules prohibit it from revealing how rejected proposals were ranked.
MISO said while all developers had the “necessary capabilities to design, finance, construct, operate and maintain the project,” there were “meaningful distinctions among the proposals with respect to specificity, certainty, risk mitigation, cost, quality of design and overall value.”
Project proposals ranged in benefit-cost from 1.37:1 to 2.34:1 and cost anywhere from $95.4 million to $133.9 million for 19.9 miles to 24.5 miles of 500-kV transmission line. MISO’s most recent estimate put the project cost at $122.4 million. Annual transmission revenue requirements in the proposals ranged from $88.2 million to $166.3 million. NextEra submitted an estimated annual transmission revenue requirement of $95 million.
“MISO was impressed by the quality and depth of all proposals for this project — and we congratulate NextEra on their merit-based selection as the developer,” Aubrey Johnson, the RTO’s executive director of system planning and competitive transmission, said in a statement. “NextEra’s proposal reflects the best overall balance of cost and value in the development and completion of this important project for the region.”
“With developer selection complete, MISO will work closely with NextEra, state regulators and other stakeholders to support successful, on-time completion of the project,” Johnson said.
MISO’s Board of Directors approved the Hartburg-Sabine project belatedly in February, still part of MISO’s 2017 Transmission Expansion Plan (MTEP 17). Approval was delayed because of stakeholder concerns over the cost estimate and a late Tariff change to separate Texas and Louisiana into their own zones for cost allocation. (See MISO Board Approves Texas Competitive Tx Project.)
The Hartburg-Sabine project comes two years after MISO’s first competitively bid effort, MTEP 15’s $49.8-million Duff-Coleman 345-kV project in southern Indiana and western Kentucky. LS Power won selection with a $49.8 million proposal. That project will be under construction throughout 2019 and 2020 and in service no later than January 1, 2021. (See LS Power Unit Wins MISO’s First Competitive Project.)