ELECTRIC GENERATION TO COME TO CLOVIS
by Lance Adkins
Over the past several months many of you have been reading or hearing about the prospect of a new electric generation facility being built in the Clovis area.
Actually, there have been two corporations actively working to develop projects, Duke Energy North America, and Cobisa, Inc. The proposed power plants, sometimes referred to in the industry as Merchant Plants, would not be regulated in the same way other electric utilities are currently regulated in New Mexico, and the plant owners would not receive any guaranteed rate-of-return from retail ratepayers.
These plants would sell directly into the wholesale power market, primarily to other utilities. Duke Energy is a "GIANT" in the development and operation of electric generating facilities world wide, and Cobisa is a relative newcomer to the industry. Cobisa recently announced they were withdrawing from further consideration due to Duke Energy reserving the bulk of available capacity on transmission lines into both the eastern and western power grids.
Many have asked "Why Clovis?" Any prospective generation owner would need a ready and sustainable fuel supply to convert into electricity, and the Clovis area has sufficient large-capacity natural gas lines already in place. Incidentally, over 95% of new electric generation planned for construction in the US will be fueled by natural gas.
Next, high efficiency power generation requires a substantial amount of water to produce steam, which in turn drives the generator turbine, and for cooling. Much of the water used in this process can come from processed wastewater, and the City of Clovis has a significant amount of wastewater that would work nicely, at significantly less cost than pumping fresh water from our underground water supply. Plant owners would still need to pursue water rights sufficient to operate the facility should the wastewater become unavailable in the future.
Generating plants of this type have an expected operational life of 30 plus years. On the positive side, as an industrial water user, the plant could utilize less than 1½ acre feet of water per year, compared to 3 acre feet now available for agricultural production on the same land, potentially reducing pumping pressure on our areas underground water resources.
Just as important to the prospective generation owner, is a market for the power produced. Between the Communities of Clovis and Portales is an electrical interconnection between the eastern and western US electrical power grids. These grids operate out-of-phase with each other and can only be connected by converting the electricity from alternating current (AC) to direct current (DC) and back to AC again. The amount of electricity that can be transferred is limited by the physical capacity of the interconnection. A power plant located in close proximity to the interconnection could easily synchronize with either power grid without using the DC interconnection, allowing power sales to either or both the eastern and western US. In addition, the main generation owner in the region, Southwestern Public Service Company (SPS), projects they will require additional generation capacity within five years, and that they will likely purchase additional energy from other producers rather than construct new generation facilities themselves.
Duke Energy is currently proposing a state-of-the-art 600-megawatt generating facility, fueled by natural gas. In terms of serving homes, this plant would serve the electrical needs of some 60,000 average homes. In addition, they plan to design the facility to eventually expand to 1,200-megawatt capacity. Certainly, a facility of this type would provide an economic shot-in-the-arm to our local economy, employing a large number of people during the construction phase, and a number of permanent jobs in plant operations personnel.
One area of concern will be cost of wholesale power produced by the plant. With over 95% of new generation being constructed in the US fueled by natural gas, natural gas costs are expected to remain elevated, affecting the cost of gas-fueled electric power generation. With the higher costs currently associated with natural gas there is renewed interest nationwide in clean-coal power generation and even nuclear power, which have a lower fuel cost, but, are considerable more expensive to construct. Given the current crises in California, high cost and power shortages, now is a good time to develop additional generation in our region.
Lance Adkins is the General Manager of Farmers' Electric Cooperative in Clovis, New Mexico, providing electrical service to approximately 10,500 meters in New Mexico.
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