Discussion

Commission staff has obtained and evaluated data from the utilities and the ISO regarding transmission constraints and has reviewed the filings in this proceeding. Staff's report, "Relieving Transmission Constraints: An Overview In Response to AB 970," is presented in Attachment 1. Table 1 summarizes the system constraints and Table 2 presents staff's recommendations for transmission upgrade projects that can be implemented by summer, 2001.

As indicated in Table 1, staff concurs with the projects proposed by the utilities with one exception. PG&E is planning to add a new bank of capacitors (which increase voltage and power flow under certain circumstances) to Martin Substation (Project #17), through which San Francisco's power flows. Staff further recommends that PG&E upgrade existing capacitors, which will increase the project's additional capacity by 50%, increasing still further PG&E's ability to raise both voltages and power deliveries.

Staff also recommends a line capacity monitoring system for the transmission link connecting the southern part of PG&E's territory to the rest of PG&E's transmission system. (Project #27.) This project was not mentioned in the ISO or PG&E filings, but is currently being tested by PG&E. Since the project gives the transmission operator real-time line capacity information and will reduce some of the economic constraints identified in the report, staff believes it should move forward for Summer, 2001.

In addition, staff recommends two projects that would address constraints on the distribution system as new growth materializes in south San Jose and northeast of Fresno. (Projects #6 and #15.) Finally, staff recommends that SCE proceed with improvements on the Victorville-Lugo 500 kV line that will improve the line's emergency overload to meet the ISO and Western States Coordinating Council's planning criteria. (Project # 31.) As indicated in Table 1, these projects are recommended by the utilities, but are not on the ISO's list of approved projects.

Based on our review of the filings in this proceeding and staff's report, we find that the thirty-three transmission projects listed in Table 2 are high priority candidates for relieving transmission constraints on the electric system by summer, 2001. We direct the utilities to proceed with these projects expeditiously so that they can be completed no later than August 1, 2001. None of these projects require further Commission action with respect to environmental review or siting, based on the requirements (and authorized exemptions) to General Order 131-D. The utilities should continue submitting monthly status reports on these transmission projects and interconnections with new generation facilities until further notice.

In its report, staff identifies several longer-term transmission planning issues for Commission consideration, including the cost-effectiveness of options for improving transmission links between northern and southern California, strategies for addressing "reliability must run" constraints¹, and projects to address stability or overload problems expected in the 2002-2005 timeframe. We intend to explore these planning and other longer-term transmission planning issues during Phase 2.