Tortoise Capital Resources Corp. (TTO) has entered into a definitive agreement with the Public Service Company of New Mexico (PNM) for the sale of its 40% undivided interest in the Eastern Interconnect Project (EIP) upon lease termination on April 1, 2015. The lease provides PNM an end-of-lease option to purchase TTO's interest for fair market value, and the parties agreed to a value of $7.7 million for the transaction.
TTO acquired an existing lease for the EIP - a 216 mile, 345 kV bulk power transmission line and related equipment and substations - on June 30, 2011, and will continue to lease its interest in the EIP to PNM through April 1, 2015.
The negotiation of the end-of-lease purchase option was prompted, in part, by a directive from the Federal Energy Regulatory Commission (FERC). FERC directed PNM, in consultation with TTO, to identify the party that would provide transmission service over the leased portion of the EIP beyond the lease expiration in 2015.
