Money Line

On Dec. 15, 2011, Pat Rogers, the prominent Modrall Sperling lawyer and lobbyist, sent an email to the private account of Gov. Susana Martinez' chief of staff, Keith Gardner, thanking Gardner for agreeing to set up a meeting with Martinez on behalf of one of his firm's clients. The client was Clean Line Energy Partners, a Houston, Tex.-based company that's gearing up to build a transmission line to deliver 3,500 megawatts of renewable energy 900 miles away, to southern California. "They have a multi billion dollar transmission line project for [New Mexico]," Rogers reminded Gardner. "This is real money."

Clean Line's director of development for the $2.5 billion transmission line, Keith Sparks, attended the meeting with one of the firm's founders, Jimmy Glotfelty. Sparks describes the encounter as "a very generic, informational-type meeting," in which the governor didn't say much, but appreciated the economic benefits of what Clean Line has named the Centennial West project.

"We're looking to invest a lot of money in the state of New Mexico," Sparks says. "We preferred that she learn about it from us."

That investment isn't confined to New Mexico. Since its founding in 2009, Clean Line has made progress on four transmission projects, including Centennial West, projected to cost a combined $9.7 billion. It's a powerful, well-connected company that aims not only to transport renewable energy across the country, but also to make plenty of money in the process. New Mexico, too, clearly stands to benefit from a transmission line its renewable energy power to high-demand markets. But questions of regulation and eminent domain have yet to be settled.

Clean Line is backed by investment capital from ZBI Ventures, a subsidiary of the New York venture capital firm Ziff Brothers Investments. Clean Line will be responsible for developing Centennial West, while utility companies will pay usage fees once it's online, which isn't expected to occur until 2019, Sparks says.

In the meantime, Clean Line will have to go through a regulatory maze estimated to last another five years.

In 2010, Clean Line entered into an agreement with New Mexico's Renewable Energy Transmission Authority, a quasi-state agency created to support and help finance renewable energy transmission projects. The agreement gives RETA eminent domain authority—in other words, the power to seize private land for projects that impart a "public benefit"—in the event that Clean Line is unable to acquire property. That provision that concerned one of RETA's members, Betty Rivera. According to minutes from an Oct. 27, 2010 board meeting, Rivera "questioned if the principal motive behind the [agreement] was to secure RETA's power of eminent domain."

Chairman Robert Busch replied that RETA's eminent domain procedures will be "based on the understanding that Clean Line will do everything within its power to acquire the necessary property without the use of eminent domain."

"We understand that the eminent domain process is a very sensitive issue," Sparks tells SFR. "Our preference is not to have to resort to eminent domain."

The agreement with RETA was one of Clean Line's first successes with New Mexico officials. Once a route is proposed—the exact location of the corridor is still being mapped out—Clean Line must obtain location permits from the Public Regulation Commission, Sparks says.

Otherwise, few state agencies in New Mexico offer daunting regulatory barriers to the development of the Centennial West project, although Sparks notes that Clean Line has to work with county officials, politicians, landowners and businesses. Jeremy Turner, RETA's executive director, says Clean Line wasn't required to deal with RETA.

Instead, much of the red tape Clean Line faces comes from the federal government. The Bureau of Land Management and the Western Area Power Administration, an arm of the US Department of Energy, will jointly lead an exhaustive environmental review of the project, with state and local agencies collaborating during the process.

But Clean Line has proven adept at dealing with the federal government. Glotfelty founded the US Department of Energy's Transmission Office, according to his Clean Line biography, and served as its first director. (Clean Line's other founder, Michael Skelly, made an unsuccessful bid for Congress as a Democratic nominee in 2008.) Since 2009, Clean Line has paid at least $190,000 to Washington, DC lobbying firms, according to data compiled by the Center for Responsive Politics.

Considering the government assistance available for renewable energy projects, it's money well spent.

Glotfelty testified before Congress last September in opposition to a bill that would repeal bonding authority for the WAPA, the DOE agency helping draft the environmental review of Centennial West. Under the stimulus package, Congress gave WAPA bonding authority to lend financial support to transmission projects like Centennial West.

"The loss of this program would potentially mean that Clean Line's efforts, as well as numerous others in the West, would grind to a halt," he told the House Committee on Natural Resources. "This could have a detrimental effect on energy security and eliminate the possibility for thousands of jobs."

US Rep. Ben Ray Luján, D-NM, made an amendment to exempt the Centennial West project, but it failed. Glotfelty serves on the board of directors of the American Wind Energy Association, whose political action committee has donated to Luján. The bill never made it out of committee.

More recently, Glotfelty has battled the expiration of a federal production tax credit for the wind industry. This tax credit, if Congress lets it expire, could stall the development of wind energy in eastern New Mexico.

Ultimately, as the founder of a transmission-line company, Glotfelty's biggest battle is developing pipelines to deliver renewable energy resources to markets.

"The industry has underinvested in transmission," he says.

Michael McDiarmid, manager of the wind program for the energy and conservation management division of the New Mexico Energy, Minerals and Natural Resources Department, agrees.

"The investment is a big boost for the economy," he says of transmission lines like Centennial West. "That's the main thing, besides the fact that renewable energy is good for the environment."

Clean Line says the transmission line will provide more than 5,000 construction jobs, 500 permanent jobs and spur employment opportunities in manufacturing and hospitality sectors along the line.

"Seven billion dollars could come to the state of New Mexico as a result of a line like Centennial West being developed," Sparks says.

Santa Fe Reporter