Discussion of Transmission Project

We discussed several transmission projects at the start of the PHC, and interested parties met informally with Energy Division to explore them further and report on their status after the lunch hour. I briefly summarize these projects below.

Path 45

Path 45 is the transmission path between Mexico and Southern California system, and is jointly owned by San Diego Gas & Electric Company (SDG&E) and the Comision Federale de Electricidad (CFE). It is comprised of a western leg (Tijuana-Miguel) and an eastern leg (La Rosita-Imperial Valley). SDG&E is already moving ahead with adding a second circuit to the La Rosita-Imperial Valley component of Path 45, which will double the import (or export) capability of that path from 408 to approximately 800 megawatts (MW). SDG&E has received concurrence from the California Independent System Operator (ISO) and plans to have the upgrade in service by November 1, 2001. The estimated cost is $1.6 million. There are also general discussions underway between SDG&E and CFE to consider additional upgrades to Path 45.¹ With respect to certification or environmental review requirements, it is SDG&E's understanding that this project is exempt from General Order (GO) 131-D and requires the submittal of an informational Advice Letter to the Commission. SDG&E is in the process of seeking concurrence from Energy Division.

Imperial Valley Transformers

Several generators propose that upgrades to the Imperial Valley substation be considered in the next phase of hearings. They argue that such upgrades will be needed to allow for the full capacity of generation from Mexico as well as from Palo Verde that comes along the Southwest Power Link. They contend that this project will yield significant ratepayer benefits by relieving the constraint point at the Imperial Valley substation that would prevent power from moving from Imperial Valley west to Miguel. The upgrade would involve replacement of one transformer and the addition of another transformer.

Since last September, this project has been discussed by a joint group that has been studying SDG&E's system, comprised of ISO, SDG&E, CFE and Imperial Irrigation District. It is related to the Path 45 upgrades in that once approximately 1000 MWs enters into the Imperial Valley substation either from the additional capacity on Path 45 or projects feeding directly into the substation, the system becomes overloaded. SDG&E states that the upgrade would cost approximately $30 million. Other parties believe it would cost approximately half that amount. ²

West of Pittsburg/Contra Costa

The ISO, Pacific Gas and Electric Company (PG&E) and Calpine have been discussing how best to address congestion in this area (thermal overloads), due to the new Delta Energy Center. They have agreed on a solution, namely, to install reactors at PG&E's Pittsburg switchyard, at a cost of approximately $5 million. The project is expected to be operational between April and June of 2002. PG&E will be submitting a formal request to the ISO for project approval in the near future, and will confirm with Energy Division that it is exempt from review under GO 131-D. ³

Path 26

The ISO has recently begun technical studies to investigate the feasibility and associated costs of further increasing the north to south transfer rating along Path 26 (Bakersfield to Los Angeles). ⁴ The Phase 1 study, which will be completed by October, will examine options that involve higher emergency ratings and replacement of terminal equipment at the Midway substation. It will include an evaluation of incremental benefits (e.g., reduced congestion) associated with each of the technical options. ⁵

Miguel-Mission

An upgrade to SDG&E's 230 kV line west of Mission substation system (Miguel-Mission) has been proposed before the ISO as an economic project by several generators to relieve congestion in bringing additional generation into the San Diego load center from the Mexico border area of SDG&E's service territory and northern Mexico. These generators contend that there is potential for 2500 additional MWs to be coming on-line in and near Mexico by mid-2003.

There is not consensus among the parties whether this upgrade would be economic to ratepayers, relative to other approaches to relieving congestion (e.g., a remedial action scheme), and there has been no analysis to date on the magnitude of the economic benefits. Upgrades to the Miguel-Mission line are estimated to cost in the range of $25 to $30 million. The project involves replacing conductors on existing structures, with an existing right of way. SDG&E will be discussing the environmental and certification requirements associated with this upgrade with Energy Division. ⁶

Tie Line 649

Coral Power proposes that the Commission consider reconductoring of approximately 5 ½ miles of a 69 kV line (tie line 649) to accommodate 140 MW of new generation coming on line this fall under three-year contracts. SDG&E argues that this project does not belong in this proceeding, due to its size and scope. In addition, SDG&E contends that the upgrade is not needed until the third unit comes on line and, to date, that project has not broken ground or signed a contract. According to SDG&E, the remedial action scheme that would be needed if the third project comes on line would only be required during off-peak periods. The ISO has just sent SDG&E a letter to look at potentially reinforcing the line for the third unit, and SDG&E is reviewing that letter. ⁷

San Francisco-Peninsula Area

A stakeholder group continues to meet to discuss upgrades to the Jefferson-Martin 230 kV line that are needed for reliability reasons and that may also have potential economic benefits by reducing reliability must-run (RMR) requirements. The stakeholder group process was initiated in response to an ISO report: San Francisco Peninsula Long-Term Electric Transmission Planning Technical Study, issued in October 2000. That report, in turn, came out of a study of the December 8, 1998 outage that was also the subject of a Commission proceeding. The group had their most recent meeting in June and another one is set for late September. PG&E reports that it is working very closely with the City of San Francisco to develop a proposed route for the project. Since much of the line is anticipated to be underground through the City, there are a number of challenges to finding a route and defining feasible alternatives and associated costs. The schedule developed during the stakeholder meetings still calls for the project to be operational by September of 2005. PG&E plans to file a CPCN application at the Commission in September of 2002. PG&E considers this to be among their highest priority projects and states that they are taking all necessary steps to move it forward as expeditiously as possible. None of the parties at the PHC believed that this project could be ready for evaluation during fall hearings. ⁸

Greater Bay Area

The City and County of San Francisco also brought up the Greater Bay Area project that PG&E has been exploring for both reliability and economic (RMR) reasons. This project is in very early stages of planning, and the alternatives are not yet defined. ⁹

Techachapi

Ridgetop proposes that the Commission examine the economic benefits of upgrades to the Antelope-Bailey 66 kV line to eliminate the need to curtail existing wind generation and to accommodate new wind capacity in the Techachapi region. Southern California Edison (SCE) contends that there is currently no evidence that any developers are interested in interconnecting at the line, and therefore the economic evaluation of these upgrades would be speculative. Ridgetop argues that this is a "chicken and egg" problem, since developers are not willing to come forth with projects when current generators are experiencing curtailments. To date, however, there are no specific cost estimates for the project or developer proposals.¹⁰