MEG/sid 2/26/2003

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Investigation Into Implementation of Assembly Bill 970 Regarding the Identification of Electric Transmission and Distribution Constraints, Actions to Resolve Those Constraints, and Related Matters Affecting the Reliability of Electric Supply.

Investigation 00-11-001 (Filed November 2, 2000)

ADMINISTRATIVE LAW JUDGE'S RULING

ON DEVELOPMENT OF RENEWABLES TRANSMISSION

PLAN PURSUANT TO SENATE BILL 1038

Senate Bill (SB) 1038 directs that the Commission produce a transmission plan for renewable electricity generation facilities, to be informed by a renewable resource assessment study conducted by the California Energy Commission (CEC):¹

§ 383.5 (j). The Energy Commission shall, by December 1, 2003, prepare and submit to the Legislature a comprehensive renewable electricity generation resource plan that describes the renewable resource potential available in California, and recommendations for a plan for development to achieve the target of increasing the amount of electricity generated from renewable sources per year, so that it equals 17 percent of the total electricity generated for consumption in California by 2006. The Energy Commission shall consult with the commission, electrical corporations, and the Independent System Operator, in the development and preparation of the plan.

§ 383.6. The [California Public Utilities] commission shall, by December 1, 2003, prepare and submit to the Legislature, a comprehensive transmission plan for renewable electricity generation facilities, to provide for the rational, orderly, cost-effective expansion of transmission facilities that may be necessary to facilitate the development of renewable electricity generation facilities identified in the renewable electricity generation facilities identified in the renewable electricity generation resource plan prepared pursuant to subdivision (j) of Section 383.5. The commission shall consult with the [California Energy] Commission, the Independent System Operator, and electrical corporations in the development and preparation of the plan.

Today's ruling establishes the schedule and process for the development of the transmission planning report required by SB 1038, based on discussion at the January 14, 2003 prehearing conference (PHC), submitted comments, and consultations with Energy Division. I am requesting further comments from the utilities and interested parties on a preliminary scope of work for the Renewables Transmission Study, which is presented in Attachment 2. The development of the SB1038 transmission study is now referred to as "Phase 7" of this proceeding.

In addition, I approve the motion by Go-Energy Partners-1983 LTD (Geo-Energy Partners) to intervene in this proceeding.

Development of SB 1038 Renewables
Transmission Study (Phase 7)

Per SB 1038, the Commission's renewables transmission study will rely on the renewable resource assessment study to be conducted by the CEC. Both studies are due to the Legislature by December 1, 2003. As indicated in my January 2, 2003 ruling, the CEC will make available its draft resource assessment results by July 1, 2003 so that the Commission may proceed expeditiously with its transmission study. At the January 14, 2003 PHC, I requested that the CEC describe the scope and content of what they will be able to hand off to this Commission on July 1. The CEC's response is attached to this ruling. (See Attachment 1.)

We also discussed at the PHC how to solicit public comments on the utilities' proposed renewables transmission plans before (as well as after) they are presented to the Commission. The California Independent System Operator (ISO) indicated that the utilities would be leading stakeholder processes this spring to establish the base cases for their five-year transmission expansion plans at the ISO. Then, once the CEC makes available their renewables assessment, the ISO and the utilities plan to evaluate whether the base cases could accommodate the additional resources, and if not, what additional transmission might be required in the five-year plan. Although the five-year plan would not be completed in the timeframe required for the SB 1038 submittal, the ISO suggested that the stakeholder process could still be an appropriate forum for public input on the utilities' proposed renewables transmission plans before they are submitted to the Commission. The ISO would take no action on the proposals, but rather facilitate the public input process through an additional stakeholder meeting in July, 2003.²

Based on the discussion at the PHC and subsequent input from CEC, ISO and Energy Division, I adopt the process and schedule for the development of the SB 1038 renewables transmission study outlined below:

1. The CEC will develop a renewables resource assessment and issue a draft assessment by July 1, 2003 as described in Attachment 1.

2. In the spring, the utilities will develop their transmission plan base cases and study plans through the usual stakeholder process overseen by the ISO grid planning department. Energy Division will attend these meetings, as needed, to become familiar with the base case plans that will be used in the SB 1038 transmission study.

3. In July, the ISO will host an additional stakeholder meeting to facilitate development by the utilities of study plans to assess, using the base cases developed for the regular planning process, the additional transmission facilities that would be required to accommodate the resources identified by the CEC. Energy Division will attend this meeting.

4. Consistent with the study plans developed in the stakeholder meeting, the utilities will undertake the studies to identify transmission additions needed to accommodate the renewable resources identified by the CEC and file their final reports in this proceeding by August 29, 2003.

5. All parties will have an opportunity to comment on the utility reports by September 15, 2003.

6. A workshop will be hosted by Energy Division to discuss the utility reports and the comments on September 23, 2003.

7. The Energy Division will prepare a draft report setting forth the renewables transmission plan for each utility. The report shall include a summary of the written comments and workshop discussion, identify any areas of disagreement, describe the positions of the parties on those areas, and present Energy Division's recommendations and rationale on how to reconcile those differences. Energy Division's draft report is due to me by October 10, 2003. I estimate at this time that a draft decision will be issued by October 15, 2003 for comment.

8. Comments on the draft decision will be due by October 27, 2003, and reply comments will be due by November 3, 2003. A final decision will be placed on the Commission's agenda for November 13, 2003, which is the last scheduled meeting in November.

The approach outlined above meets the clear intent of SB 1038 that this Commission coordinate and consult with the CEC, ISO and the utilities in developing the renewables transmission plan. However, it also means that the fulfillment of the Commission's statutory obligations is dependent upon the timely and complete submission by the CEC of a draft renewables resource assessment. The coordinated approach adopted above also relies upon an ISO grid planning process that remains on schedule. However, I am confident, based on the cooperative discussions at the PHC, that the CEC and ISO recognize this interdependence, and will put top priority on the completion of their designated tasks, as will this Commission.

For this coordinated approach to be successful, the appropriate forum for public input on SB 1038 study issues needs to be clear. As discussed in Attachment 1, the CEC will be providing an opportunity for public input into the development of their renewable resource assessment. The utilities will also be leading public meetings (referred to the "stakeholder process") at the ISO to obtain public input on what the base case should be for their transmission expansion study plans.³ We expect parties that are interested in these issues to participate actively in the CEC and ISO forums. We will not revisit these issues for the purpose of developing the SB 1038 transmission study to the Legislature during Phase 7.⁴

¹ Stats 2002, Ch. 515, Sher. All code sections presented in today's ruling refer to the Public Utilities Code.

² See Reporter's Transcript at 412-425 and January 24, 2003 letter from ISO filed in this docket.

³ Ibid.

⁴ Nothing in today's ruling is intended to preclude the Commission from revisiting transmission planning or resource potential assumptions in the context of other proceedings or in other phases of this proceeding. However, for the purpose of preparing the Phase 7 report to the Legislature, the process described in today's ruling is only workable if there is a direct "hand off" of the base case transmission planning assumptions that result from the ISO's grid planning process, and of the renewable resource assessment developed by the CEC.