Photo: transmission structure in a arid landscape

Transmission Infrastructure Program powers forward in 2023

WAPA’s new strategic plan, Power Forward 2030, not only helps define the organization’s trajectory for the next seven years, but it can also help individual WAPA programs move ahead in an aligned manner supporting a coherent strategy. 

The Transmission Infrastructure Program – WAPA’s revolving loan program that aims to leverage federal funds and attract non-federal co-investment to support the development of transmission, energy storage and related infrastructure – provides a case in point.​ 

But first, a bit about how TIP works. 

Get to know TIP

“I want our customers and all TIP stakeholders to know that this program stands ready to help get their project to the finish line and put steel in the ground,” said Senior Vice President and Transmission Infrastructure Program Manager​​ Paul Schwabe. 

Congress authorized a permanent $3.25 billion revolving borrowing authority for WAPA to help finance new and upgraded transmission, energy storage and related facilities projects located in the organization’s service territory that facilitate the delivery of renewable energy. WAPA’s borrowing authority from the U.S. Treasury, managed by TIP, helps make projects more competitive and beneficial to ratepayers by providing low-cost capital to a project. 

TIP provides financing options for a range of project sizes and development timelines from generally large-scale, long-development transmission projects in the multi-billion-dollar category, as well as relatively smaller and quicker development projects, such as utility-scale battery storage. Other forms of energy storage projects also qualify, including pumped hydro storage and compressed air systems among other types. Many experts see further developing a diverse portfolio of energy storage technologies that can store and discharge energy over various durations as crucial in reliably integrating more variable wind and solar energy into the grid. 

“One of my goals is to reach a steady TIP partnership base that encompasses near-term, medium-term and long-term opportunities,” Schwabe said. “Looking across project types, transmission will stay at the heart of the program but will be supplemented by energy storage projects and also keeping eye on emerging sectors and different customer types.”  

One thing to keep in mind: a TIP loan constitutes a federal action, and these projects will be required to complete some level of environmental analysis under the National Environmental Policy Act before a TIP loan can be approved. 

In accordance with NEPA, large-scale transmission projects typically require a full environmental impact statement, while it may be sufficient for smaller-scale interconnection and energy storage projects to complete the ‘categorical exclusion’ or ‘environmental assessment’ levels of NEPA review.  

TIP’s value proposition

TIP currently provides both financing and development assistance, and delivers value based on what Schwabe calls “The Three C’s”: customers, capital and commercialization.  

“The hallmark of the TIP program, of course, is the access to low-cost and long-term capital. That can help with affordability and cost-control to the rate payer, particularly in the higher-interest and inflationary-pressure market we are experiencing in 2023,” Schwabe said. 

With more than 700 customers, WAPA has a deep well of trusted partners who may leverage TIP’s capital lending or project development expertise. In addition to WAPA’s customers, TIP works with private infrastructure developers and investors pursuing transmission and storage projects within WAPA’s service territory.  

In terms of commercialization, TIP can also connect customers and other developers with WAPA subject matter experts who can help lead the NEPA process, identify market opportunities and assist with engineering and interconnection studies and several other requirements to bring a project to market. Uniquely, WAPA has direct expertise and experience in transmission development, operations, maintenance, marketing and ownership, which it can leverage to support the development of projects and bring them to market, benefiting a wide range of stakeholders. 

Powering forward with TIP

WAPA’s new strategic plan also served as an opportunity to refocus and reinvigorate TIP’s purpose in service of WAPA’s mission.  

TIP primarily supports the second of three topline strategic goals outlined in Power Forward 2030, “Modernize the Grid.” In turn, TIP’s work directly bolsters Objective 3.3 that states, “We leverage federal and non-federal financial and technical resources to expand and modernize the grid.” 

Specifically, it outlines the need for TIP to provide low-cost capital to facilitate the delivery of renewables to the grid; facilitate development of new and upgraded transmission lines and related facilities that strengthen the grid; and leverage WAPA’s expertise and experience to contribute to effective transmission solutions. 

Uniquely, this part of the strategic plan specifically calls out TIP’s targeting and facilitation of energy storage projects as a key strategic initiative aimed at supporting WAPA customers’ needs in this area. 

Meading by example

Last year, WAPA’s Desert Southwest region and TIP sought submissions that proposed partnerships to upgrade existing facilities owned by WAPA or construct new transmission facilities around Boulder City, Nevada, and the nearby Mead Substation energy trading hub. Secondarily, it targeted potential agreements taking transmission service from or interconnecting to the upgraded or newly constructed transmission facilities. 

“We received several engaging responses, and we are now vetting those ideas and pursuing further discussions and progressions with these potential partners,” Schwabe said. 

“I’m excited about this outreach opportunity to build further connections with our customers and stakeholders,” said Senior Vice President and Desert Southwest Regional Manager Jack Murray. “DSW and TIP will continue to follow up on these promising initial steps as we explore ways to better serve our customers,” he added. 

TIPping point ahead?

In 2023, TIP plans to focus on a range of priorities, including strengthening and expanding partnership opportunities and adapting to recent changes in the project financing industry resulting from the Inflation Reduction Act and other recent legislation. TIP will also meet with more customers to discuss potential improvements, efficiencies and informational needs to ensure they understand and can access this important resource. 

“In late 2021 and 2022, we saw the passage of multiple pieces of federal legislation that dramatically changed the industry through new and structurally different long-term incentives, new federal loan programs for transmission and further capitalization of other existing loan programs,” Schwabe said. 

“We will coordinate regularly and closely with these programs going forward,” he said.  

For his part, Schwabe plans to meet with as many potential partners as possible to discuss how they might collaborate to provide beneficial outcomes for each party. 

“TIP’s doors are open, and I really enjoy engaging WAPA customers, private infrastructure developers, and the many different TIP stakeholders on these exciting, potentially game-changing opportunities,” Schwabe concluded. “I see the next decade ahead as a golden opportunity for the TIP program.”  

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Last modified on March 12th, 2024