Arizona regulators okay power line upgrade from Vail to Nogales, new line to Mexico

A new substation would be built on this plot of land near Nogales as part of a project to run power lines into Mexico.

David Sanders / UNS

State regulators approved a project planned by Tucson-based UniSource Energy Services and a Texas company to upgrade a high-voltage transmission line between Vail and Nogales, and related construction of a new power line from Nogales to Mexico.

The Arizona Corporation Commission voted unanimously Tuesday to approve both the Vail-Nogales project, which is backed by UES Electric, part of UNS Energy Corp. that serves Santa Cruz and Mohave counties, and the Nogales-Mexico line planned by Dallas-based Hunt Power.

The project was granted a required certificate of environmental compatibility by the Arizona Power Plant and Transmission Line Siting Committee in late September, after public-comment meetings in Nogales and Tucson.

UES says its primary part of the project, known as the Nogales Tap to Kantor Upgrade Project, will boost reliability for the utility’s Santa Cruz County customers.

The Nogales area now gets its power from a single high-voltage line extending about 55 miles from the Vail substation, south of Interstate 10 and west of South Rita Road.

Under the proposed project, UES would upgrade a 27.5-mile segment of the power line — essentially its northern half — to increase its capacity and link with the new line to Mexico for emergency backup.

Hunt Power is proposing to build and operate the Nogales-Mexico segment of the project, known as the Nogales Interconnect, with plans to sell power into Mexico.

That roughly five-mile line, including a proposed new substation west of Nogales, also would allow UNS to temporarily tap power from Mexico if needed, the utility says.

The UES portion of the line will cost an estimated $30 million to $40 million, to be recovered over years through electric rates.

Hunt Power says the Nogales Interconnection will provide a direct-current “asynchronous interconnection” — also known as a DC tie — near Nogales to enable two-way electricity transfers between the regional grid of which UES is a part, the Western Electricity Coordinating Council, and Mexico.

The DC tie is needed because the two nation’s grid frequencies are not compatible.

Hunt says the interconnection will provide greater stability and reliability to both the Arizona and Sonora grids, while the DC tie will keep the two grids completely separate, effectively acting as a firewall.

Hunt estimates the Nogales Interconnection will cost about $80 million, including the new substation.

During Tuesday’s Corporation Commission meeting, Tubac resident Marshall Magruder questioned the need for the additional power capacity and said it was improper for UES ratepayers to pay for improvements to allow a second, “merchant” circuit for sales to Mexico to be constructed later.

He cited the plan to replace all the poles on the northern half of the Vail-Nogales line with poles deigned to support two circuits.

“I don’t think we as ratepayers should pay for the extra infrastructure so they can add a circuit later,” said Magruder, a retired engineer who spent eight years on the Nogales-Santa Cruz County Energy Commission.

But Ed Beck, director of transmission development at UES and sister utility Tucson Electric Power Co., told the commission ratepayers are paying only for the system upgrades, the extra cost of double-circuit poles was minimal and the project will benefit ratepayers in the long run.

Any additional construction would require the utility to submit new applications to federal and state regulators, Beck added.

Hunt Power has applied for required U.S. Department of Energy approval — known as a presidential permit because the president must approve it — for cross-border power sales, but it still has much to work to do before construction begins.

“The ACC approval is an important milestone for the project, but it is not the last step,” Hunt spokesman Paul Schulze said in an email. “There are other required federal approvals, and we will need to secure property easements and other commercial agreements.”

Schulze said the plan is for the project to be completed by the end of 2019, subject to all necessary approvals and agreements.

Contact senior reporter David Wichner at dwichner@tucson.com or 573-4181. On Twitter: @dwichner. On Facebook: Facebook.com/DailyStarBiz

Senior reporter covering business and technology for the Arizona Daily Star/Tucson.com