III. The Tehachapi Wind Resource Area
The record indicates that just over 645 MW of wind generation is currently operational in the Tehachapi area, with about 345 MW connected to SCE's Antelope-Bailey 66 kV transmission system and just over 300 MW connected to an independently owned 230 kV radial transmission line (commonly referred to as the Sagebrush line).
The Tehachapi area has the potential to meet a significant portion of California's renewable energy goals. In its Renewable Resources Development Report, the CEC reports that the Tehachapi area contains the largest wind resource in California, with undeveloped potential of about 14,000 gigawatt-hours per year (about 4,500 megawatts (MW) of peak capacity). This is the largest renewable resource potential in California, except for solar power installations which the CEC reports are not currently cost-competitive.
In its report, the CEC crafted two "Plausible Resource Scenarios" to describe possible mixes of renewable technologies sufficient to meet the renewable development goals of SB 1078 (20% of electricity sales by 2017) and the Energy Action Plan4 (20% of electricity sales by 2010). These scenarios assume that the goals will be met by renewable resources located in California or near the border, and take into account technical potential data, the locations of currently proposed projects, cost estimates, and development time. Under each scenario, 4,060 MW of new wind generation would be installed in the Tehachapi area, which would produce about 40% of the renewable generation needed to meet SB 1078 and Energy Action Plan goals.
CEC cost estimates indicate that wind generation may be the most cost competitive of the renewable energy technologies, with projections that wind generation could be cost competitive with a new combined cycle natural gas power plant by 2005. The CEC recognized, however, that its wind cost estimates, while corroborated by recent bidding experience in other states, are significantly lower than recent bids by wind developers in California. The CEC postulated that wind development may be more expensive in California than in other states due to higher land lease rates and generally stricter permitting requirements.
SCE states that its 66 kV network in the Tehachapi area is fully loaded and that SCE would need to construct new transmission facilities in order to connect any new wind generation in that area. Oak Creek reports that approximately 420 MW of Tehachapi wind projects have been successful low bidders for CEC New Renewable Resources Account awards5 but are waiting to construct, due primarily to a lack of feasible transmission.
We recognize that the amount and timing of Tehachapi wind development may vary significantly from that indicated in the CEC's Plausible Resource Scenarios. The amount of wind development will depend on wind projects' ability to compete in the renewables procurement process. Under the RPS program, bids will be subject to least-cost, best-fit assessments that take into account the expected costs of transmission upgrades if needed to access the new generation. While wind may be a relatively low cost renewable technology, the need to relieve transmission constraints in the Tehachapi area will tend to increase the total cost of Tehachapi power. The intermittent nature of wind power may also affect its least-cost, best-fit assessment. Without prejudging the outcome of the RPS process, we believe it is important that the transmission planning process does not impede the ability of wind developers to compete fairly in RPS procurement.
4 The Energy Action Plan was adopted in May 2003 by this Commission, the CEC, and the California Power and Conservation Financing Authority. (See CPUC website, http://www.cpuc.ca.gov/static/industry/electric/energy+action+plan/index.htm). 5 The CEC's New Renewable Resources Account funding mechanism was created by Assembly Bill 1890. Auctions were held in 1998, 2000, and 2001.
