CHEYENNE -- TransCanada has signed agreements with three wind energy developers to supply power to the company's proposed $3 billion electrical transmission line that would run from Wyoming to the Southwest.
The Calgary-based company announced last week that it had concluded "open season" auctions for potential customers.
The three companies to sign on for the project are Pathfinder Renewable Wind Energy and Horizon Wind Energy -- both with Texas roots -- and BP Wind Energy NA, a subsidiary of the English energy company BP.
The Zephyr line is one of six major transmission lines that developers have proposed to export Wyoming wind power to markets hungry for renewable energy on the West Coast or desert Southwest. All face the challenges of the enormous cost and layers of permitting required to build across multiple states.
"The Zephyr project has got a number of challenges ahead, but we are exceedingly pleased with the market response from Wyoming developers and we're very much looking forward to working with them," said John Dunn, project manager for TransCanada.
The 1,100-mile Zephyr line would carry 3,000 megawatts of power from the Medicine Bow area west into Idaho and then south to southern Nevada. TransCanada hopes to build and begin operating the line by 2015.
"The very realistic time frame that we've presented for this project really contemplates that the 3,000 megawatts of associated wind generation would be built in time, so that when the project reaches commercial operation in late 2015, early 2016, then our customers will have brought on the associated wind resource basically to feed into the project," Dunn said.
The companies and TransCanada will share the project permitting costs, which are expected to be more than $80 million, Dunn said. Details of the agreements between TransCanada and the three companies are confidential, he said.
Dunn said developers intend for most of Zephyr's electricity to be sold in California, a state that is requiring its utilities to get a third of their power from renewable sources by 2020.
But TransCanada and other Wyoming wind interests have been concerned about recent actions by the California Public Utilities Commission that they believe could limit California utilities' purchase of renewable energy produced outside of that state.
The unsettled regulatory environment in California adds ambiguity to the long-term viability of the California market for out-of-state renewable energy providers, Dunn said.
"This is a $3 billion project -- it's all at-risk shareholder dollars -- and we want to make sure that before we spend those dollars that the large utilities in California have the ability to contract long term for these very competitive and attractive out-of-state renewable resources," Dunn said.