5. CAISO Approval and Cost Recovery Issues
Similar to the Commission's own decision, CAISO Board approval of the Project was based upon construction of the entire Project and the economic analysis assuming access to low-cost energy in Arizona. The CAISO Letter50 reflects that the CAISO intends to consider the California-only Project separately with regard to SCE's compliance with the CAISO tariff, which impacts SCE's ability to recover costs through FERC's ordinary transmission charges. While CAISO approval for the California-only Project is not necessary for the Commission to issue this decision on SCE's Petition, CAISO approval will be a determinative factor in whether construction costs are recovered from transmission users in FERC-administered rates.51
The CAISO Letter sets forth the conditions for CAISO approval of the California-only Project, based upon the CAISO's tariff at FERC.52 In response to the CAISO Letter, DRA protested that the Commission should deny the Petition because the record does not demonstrate the need for the California-only Project and need has not yet been determined by the CAISO. DRA proposes that SCE re-file the Petition after the CAISO has determined the need for the California-only Project.53
We disagree with DRA's contention that the Petition should be denied. Withholding Commission approval until CAISO approval, and then reconsidering the need for the California-only Project, will only serve to delay construction of this important transmission resource.
However, we recognize that CAISO approval is necessary to FERC rate-recovery, and thus beneficial to SCE ratepayers. Thus, our approval here is contingent upon CAISO approval of the California-only Project. As CAISO approval will likely be conditioned upon executed interconnection agreements, among other things, this condition will prevent construction of the line if no interconnection requests materialize into actual projects.
Further, we recognize that the status of the CAISO's interconnection queue and executed interconnection agreements are critical to CAISO approval and the ultimate use of the California-only Project. We also understand that interconnection requests in Arizona could impact the use of the California-only Project. Consequently, we require SCE to provide notice to the Director of the Commission's Energy Division and the Director of the Division of Ratepayer Advocates on the status of interconnection requests and agreements as they relate to the Project every six months. Such notices shall include information on both renewable interconnection requests and agreements, as well as information on conventional generation seeking interconnection to the California-only Project approved here, and any expansion of that project to Arizona.
50 Supplemental Filing, Attachment I.
51 SCE is not seeking backstop cost recovery under Pub. Util. Code § 399.2.5.
52 Supplemental Filing, Attachment I at 3.
53 Response of the [sic] Division of Ratepayer Advocates to Southern California Edison Company's Supplemental Information on Petition for Modification of D.07-01-040, July 6, 2009.
