East End Billed for Upgrading Nucla-Telluride Transmission Line

TELLURIDE – With construction underway on the Nucla-Telluride 115kV power line upgrade, San Miguel Power Association customers in eastern portions of San Miguel County will see a surcharge of 7.474 percent on their August energy bill, which, over the next 30 years will finance a loan of approximately $10 million covering a portion of the project’s cost.

According to SMPA Communications Executive Becky Mashburn, the surcharge becomes effective Aug. 1 for SMPA members who would receive backup power from the power-line upgrade, once it is completed, in approximately two years. The surcharge area includes Telluride, Mountain Village, Ophir, Sawpit, the Trout Lake/San Bernardo area, Placerville, the Illium Valley and Specie, Wilson and Sunshine mesas.

The 7.474 percent surcharge, which will be a line item on monthly bills, is based on the estimated costs of the underground project and financing amortized over 30 years.

The entire transmission-line project, which spans 50 miles, will cost approximately $56 million with Tri-State Generation and Transmission Association contributing $7.5 million and $1.2 million coming from the Coalition of Concerned San Miguel County Homeowners. It is estimated that the total cost of under-grounding roughly 10 miles of the line will cost $19 million.

“This was a compromise between the local governments, San Miguel County, Tri-State and SMPA,” Mashburn said on Tuesday. “The initial estimate is that it will be a 30-year surcharge, which is a very conservative figure. If we can pay ahead, we will, but right now, the estimate is 30 years.”

The member surcharge will be recalculated when construction is completed, to establish the final surcharge, based on the final project and financing costs. All funds collected from the final surcharge will be used to meet debt payments; any excess revenue collected, due to an increase in SMPA sales, will go toward advance payments on the principal. Should the project be terminated for any reason after the initial surcharge takes effect, SMPA will refund the collected amounts back to members.

“Thanks to the collaboration of all parties, the residents in the Telluride region will be secure in the knowledge that once the new line is completed, we will have sufficient backup power in the case of damage to our primary line,” said Telluride Mayor Stu Fraser in a press release issued to The Watch. “Part of making that a reality is the surcharge. It’s a cost-sharing measure supported by all those delivering and receiving the power.”

Construction on the project started last June, after nearly a decade of litigation between Tri-State, the Colorado Public Utility Commission and private homeowners surrounding the upgrade area of the outdated 69kV Nucla power line. Currently, according to SMPA, Telluride, Mountain Village and the surrounding areas receive electricity through the primary transmission line, which runs over Coal Bank, Molas and Ophir passes as well as across approximately 300 identified avalanche paths along the way, leaving the region at risk of multi-day power outages during the busy winter ski season.

The 69kV line running from Nucla to Telluride currently serving as a backup to the main power line is not capable of supporting the region’s power needs during peak winter season. By upgrading the 69kV line to a 115kV line, it will mean more capacity, more power and more back-up support for the east end of San Miguel County. Once constructed, the new line will transmit electricity from the Nucla substation, west of Naturita, to the Sunshine mesa substation near Telluride.

“It was vital that San Miguel Power work with the local governments to find a way to get this line constructed,” said SMPA General Manager Kevin Ritter. “Without it, the region could be subject to rolling blackouts and prolonged outages in the winter simply because the backup line can’t provide the power required. It would become more than an inconvenience, as the region would basically be at a standstill during its busiest and most lucrative time of year.”

In 2010, construction on the transmission line will begin, starting outside the Nucla switchyard in Montrose County and going to the Norwood substation in San Miguel County. The underground cable system will also begin in 2010 on Specie and west Wilson mesas with trench installation.

Power-line construction from the Norwood substation to Specie Mesa is expected to take place in 2011 along with the continued installation of the underground cable system on Specie and Wilson mesas.

Finally, in 2012, it is expected that the transmission line from the Sunshine substation to Sunshine Mesa will be constructed, and the underground cable system on the mesas finished. Substation construction will take place at the Sunshine, Wilson and Norwood substations, as will Nucla switchyard modifications.

“The new 115kV power line is a significant step forward in ensuring a reliable supply of electricity for the residents and businesses in Mountain Village for years to come,” said Mountain Village Town Manager Greg Sparks. “The town is pleased to have played a part in the resolution of this regional issue.”

For regular updates about the project’s progress visit http://tristate.coop/Transmission/Nucla/Nucla-Sunshine-project.cfm. For more information about the surcharge contact SMPA at 970/626-5549 or 970/864-7311.