System-Wide Need

In addition to determining SDG&E's bundled customers' resource need, the LTPP also shows whether there will be sufficient capacity in its service area to meet the reliability needs of all customers in the service area. Because SDG&E does not know the contractual positions of direct access customers in its service area, SDG&E assessed in its LTPP on a service area basis whether there will be sufficient capacity to meet the reliability needs of all customers in the service area according to the California Independent System Operator's (CAISO) grid planning criteria. SDG&E (as the transmission owner under the CAISO tariff) must comply with the CAISO statewide grid planning standards, which dictate that utilities plan their systems so that there will be no interruption of customer load for a single transmission circuit outage, with the largest generator already out of service (the "G-1/N-1" criterion). For purposes of SDG&E capacity planning, this criterion requires that SDG&E's service area has sufficient on-system resources and import capability to serve the full adverse peak summer demand forecast during the worst G-1/N-1 event. Currently, SDG&E's worst G-1/N-1 event would be the outage of the Palomar plant plus the loss of the Southwest Power Link.

The system-wide need determines whether there are enough resources in the service area to meet CAISO grid planning criteria regardless of what load these resources serve. If there are enough resources, then SDG&E and the other Load Serving Entities that serve load in the San Diego Service area will be able to meet the Commission's local resource adequacy requirements. If the system-wide need determines there are not enough resources, then new capacity must be constructed. SDG&E's LTPP shows the total system assessment with and without the Sunrise Powerlink for base case, high, and low scenarios. The LTPP assumes that all the currently existing capacity in the service area remains in service except for the South Bay Power Plant, which is assumed to retire at the end of 2009, consistent with the termination of the Port of San Diego's lease expiration date, as well as the CAISO's own planning criteria.