The proposed decision of ALJ Gottstein was mailed to the parties in accordance with Section 311(d) of the Public Utilities Code and Rule 77.1 of the Rules of Practice and Procedure. Comments were filed on _____________ and reply comments were filed on _______________.
1. The modeling approach used in this proceeding to establish the reliability need for new transmission capability to the Southwest has never been used before by either the utilities or the ISO. The matrix model used in this proceeding was benchmarked against the results of a Southern California power flow study, using one set of similar input assumptions.
2. The results of the matrix model are the same as those of the Southern California power flow study only if transmission capability is derated in the matrix model.
3. The one-to-one derating assumption used by the ISO in benchmarking the model has not been confirmed with power flow studies.
4. The derating formula was not applied consistently in the scenario analyses presented on the record. In addition, the formula does not deduct capacity retirements when calculating the gap between in-state generation resources and loads or the resulting derate of transfer capability.
5. The record indicates that derating would not be needed on a one-to-one basis, or perhaps not even at all, if sufficient additional reactive voltage support is installed. However, the derate formula used by the ISO does not factor in any relationship between reactive voltage support and required reduction in transfer capability.
6. If the one-to-one derate ratio is inaccurate, or should not be applied at all, the matrix model results will not match the Southern California study for the benchmarked case and will underestimate the need for new transmission by approximately 2-3 years.
7. Based on the record, the transfer capability of existing transmission interties is higher than the input assumptions used in the matrix model. Path 45 transfer capacity will be increased from 408 MW to 800 MW, effective in 2002. The transfer capability of Southern California import transmission has been increased from 13,200 MW to 14,300 MW due to the installation of new reactive voltage support.
8. The outage and retirements assumptions used for Scenarios 2, 4, and 5 are more consistent with the evidentiary record than those assumed under the Joint Parties' Planning Scenario.
9. Projections of load between base load and base load minus 10% assumptions are consistent with the record concerning future demand and conservation efforts. Load projections at 10%-20% above base load projections appear highly unlikely.
10. Based on the number of new generation projects under construction and the number that have already received financing for Southern California, the "very low" new internal generation case (720 MW) appears highly unlikely.
11. Because utilities have never before had a large number of generators wanting to build in California, it is difficult at this time to assess the likelihood of the "low" to "maximum" (5,500 MW to 20,500 MW) of new in-state generation coming on line.
12. Assessing the likelihood of projects coming on line for export from Mexico is difficult at this time because: 1) there have been no exports from Mexico to Southern California in the past; 2) construction and financing on new projects requesting interconnection studies have not been completed; 3) contracts and commitments for power projects have not been finalized in all cases.
13. The assumptions for external resources available from Arizona and Nevada are inflated because they are based on a resource potential estimate that is approximately 10,000 MW larger than the amounts generally used in CEC load and resource assessments.
14. Reruning the matrix model with updated assumptions on transfer capability and with the derating formula applied consistently (and incorporating retirements into the formula), yields the following results:
· No need for new transmission to the Southwest until 2009 or beyond in all cases except those run under 1) very low new internal generation (720 MW) and 2) low or medium internal generation with a 10%-20% increase in base load demand.
· The only two cases in which need is indicated before 2011 in scenarios with other than the "very low" internal generation assumptions is the "low" generation scenario with 1) a 10% increase in base load assuming no post-2004 retirements and 2) base load demand assuming post-2004 retirements.
· Accounting for the potential 2-3 year bias in the matrix model based on the benchmark run, the need for new transmission does not surface before 2008, under all but relatively unlikely combinations of load and internal generation assumptions.
15. The Joint Parties did not present an economic analysis of additional Southwest transfer capability on the record, but intend to pursue an RFP process initiated by the ISO to develop a joint methodology for such an analysis.
16. The Joint Parties presented preliminary cost estimates for transmission upgrades to the Southwest. The total estimates ranged between three-quarters billion to three and three-quarters billion dollars, depending upon the route and ultimate cost of transmission line per line.
17. Transmission owners, ISO staff, and interested stakeholders participate in the ISO's annual transmission planning process to identify projects needed for system reliability purposes. At the completion of this process, transmission projects under $20 million are approved by ISO management, i.e., the Regional Transmission Manager in the Grid Planning Department in consultation with ISO officers, as needed. Projects over $20 million are approved by the ISO Board. The ISO has never assessed the economic need for transmission projects since its inception in 1997. Since the ISO has been established, all of the projects approved (over 200) have involved upgrades to address reliability requirements. Less than 10 of those projects have required ISO Board approval.
18. The ISO does not conduct evidentiary proceedings to scrutinize the assumptions or methods utilized in its transmission planning process.
19. Based on the record in this proceeding, we find that new transmission to the Southwest (including Mexico) is not likely to be needed for reliability purposes before 2008. Our conclusions take account of recent updates to transmission transfer capability identified on the record, as well as potential bias in the model utilized by the Joint Parties.
20. The Commission should monitor the reliability efforts conducted through the ISO's Grid Coordinated Planning Process in order to update and confirm these results with the detailed power flow studies conducted during that process. As discussed in this decision, Energy Division should report to the Assigned Commissioner and ALJ if the power flow studies indicate a need for new Southwest transfer capability earlier than 2008.
21. The issues raised by Coral Power in this proceeding regarding the need to reduce congestion west of Miguel should be addressed in the separate set of evidentiary hearings scheduled this fall.
22. To the extent that significant ratepayer funding is involved to further upgrade Path 45, this issue may be included in the evidentiary hearings on the economic need for new transmission to the Southwest.
23. No findings can be made from this record regarding the adequacy of the in-state transmission grid in the Southern California region.
1. Decisions concerning the economic need of major transmission projects, as well as the allocation of costs among ratepayers and other project beneficiaries, should not be left to the discretion of ISO management personnel or Board. Instead, this assessment should be made at the Commission, which has both a statutory mandate and authority to protect ratepayers' interests and an open evidentiary process to scrutinize the methodologies and assumptions used to reach such determinations.
2. In order to proceed with further evaluation of transmission upgrades to the Southwest as soon as possible, this order should be effective today.
IT IS ORDERED that:
1. Energy Division shall monitor the reliability modeling efforts conducted through the California Independent System Operator's (ISO) Grid Coordinated Planning Process or other planning processes in order to update and confirm the results of this proceeding on an ongoing basis. Specifically, Energy Division shall report by letter to the Assigned Commissioner and Administrative Law Judge (ALJ) if the power flow studies indicate a need for new transmission capacity to Arizona, Nevada, and Mexico for reliability purposes earlier than 2008. This report shall be filed and served in this proceeding.
2. Pacific Gas and Electric Company, San Diego Gas & Electric Company (SDG&E), and Southern California Edison Company shall jointly file the results of the ISO/stakeholder Request for Proposal process in this proceeding within 15 days from the date the consultant's final report is completed. Copies of the full report shall be served on Energy Division and the assigned ALJ. A notice of the availability of this report shall also be served in this proceeding. As soon as practicable thereafter, the assigned ALJ will hold a further prehearing conference to schedule evidentiary hearings on the economic need for new transmission to the Southwest.
3. SDG&E shall submit information on the status of discussions or actions to further upgrade Path 45 in its monthly transmission status reports.
This order is effective today.
Dated , at San Francisco, California.
Table 1 |
||||||||
SUMMARY OF RESULTS: SCENARIOS WITH NO RETIREMENTS AND ISO OUTAGE FIGURES | ||||||||
Case # |
Description of Load |
Availability of External |
Year That New Line Needed | |||||
and Internal Generation |
Generation Levels |
(2001-2011 Planning Period) * | ||||||
With Derate |
Without Derate | |||||||
J1.1, J1.2 |
Maximum internal generation |
Maximum and medium |
after 2011 |
N/A | ||||
J1.3, J1.4 |
Baseload, Baseload plus 10% |
|||||||
J1.5, J1.6 |
Baseload plus 20% |
|||||||
J3.1, J3.2 |
Baseload less 10% |
|||||||
J3.3, J3.4 |
Baseload less 20% |
|||||||
J3.5, J3.6 |
Average Load |
|||||||
J2.1, J2.2 |
Medium internal generation |
Maximum and medium |
after 2011 |
N/A | ||||
J2.4, J2.5 |
Baseload, Baseload plus 10% |
|||||||
J2.6, J4.1 |
Baseload less 10%, less 20% |
|||||||
J4.2, J4.4 |
Average load |
|||||||
J4.5, J4.6 |
||||||||
J5.1, J5.2 |
Low internal generation |
Maximum and medium |
after 2011 |
N/A | ||||
J5.4, J5.5 |
Baseload, Baseload plus 10% |
|||||||
J5.6, J6.1 |
Baseload less 10%, less 20% |
|||||||
J6.2, J6.4 |
Average load |
|||||||
J6.5, J6.6 |
||||||||
J7.4, J7.5 |
Very low internal generation |
Maximum and medium |
after 2011 |
N/A | ||||
J7.6, J8.4 |
Baseload less 10%, less 20% |
|||||||
J8.5, J8.6 |
Average load |
|||||||
J2.3 &J4.3 |
Medium internal generation levels |
Maximum and medium |
2011 |
N/A | ||||
Base load plus 20% |
||||||||
J5.3 & J6.3 |
Low internal generation levels |
Maximum and medium |
2009 |
N/A | ||||
Base load plus 20% |
||||||||
J7.1 & J8.1 |
Very low internal generation levels |
Maximum and medium |
2008 |
after 2011 | ||||
Base load |
||||||||
J7.2 & J8.2 |
Very low internal generation levels |
Maximum and medium |
2005 |
2008 | ||||
Base load plus 10% |
||||||||
J7.3 & J8.3 |
Very low internal generation levels |
Maximum and medium |
2001 |
2001 | ||||
Base load plus 20% |
||||||||
NOTES: |
||||||||
NA= "not applicable". Derating was only done for the baseload, baseload plus 10% |
||||||||
and baseload plus 20% load runs under the "very low internal generation" cases. |
||||||||
* For some or all of the years, there may be insufficient external resources for import to meet | ||||||||
all of the load demand within California. |
Table 2 |
|||||||||||
SUMMARY OF RESULTS: SCENARIOS WITH RETIREMENTS AND CEC OUTAGE FIGURES |
|||||||||||
Case # |
Description of Load |
Availability of External |
Year That New Line Needed |
||||||||
and Internal Generation |
Generation Levels |
(2001-2011 Planning Period) * |
With Post-2004 |
||||||||
With Derate |
Without Derate |
Retirements** |
|||||||||
J1.1, J1.2 |
Maximum internal generation |
Maximum and medium |
after 2011 |
N/A |
After 2011 |
||||||
J1.3, J1.4 |
Baseload, Baseload plus 10% |
||||||||||
J1.5, J1.6 |
Baseload plus 20% |
||||||||||
J3.1, J3.2 |
Baseload less 10% |
||||||||||
J3.3, J3.4 |
Baseload less 20% |
||||||||||
J3.5, J3.6 |
Average Load |
||||||||||
J2.1, J2.4 |
Medium internal generation |
Maximum and medium |
after 2011 |
N/A |
After 2001 |
||||||
J2.5, J2.6 |
Baseload |
||||||||||
J4.1, J4.4 |
Baseload less 10%, less 20% |
||||||||||
J4.5, J4.6 |
Average load |
||||||||||
J5.1, J5.4 |
Low internal generation |
Maximum and medium |
after 2011 |
N/A |
After 2011 |
||||||
J5.5, J5.6 |
Baseload |
||||||||||
J6.1, J6.4 |
Baseload less 10%, less 20% |
||||||||||
J6.5, J6.6 |
Average load |
||||||||||
J7.5, J7.6 |
Very low internal generation |
Maximum and medium |
after 2011 |
N/A |
After 2011 |
||||||
J8.5, J8.6 |
Baseload less 20% |
||||||||||
Average load |
|||||||||||
J2.2 & J4.2 |
Medium internal generation levels |
Maximum and medium |
2010 |
N/A |
2008 |
||||||
Base load plus 10% |
|||||||||||
J2.3 & J4.3 |
Medium internal generation levels |
Maximum and medium |
2006 |
N/A |
2005 |
||||||
Base load plus 20% |
|||||||||||
J5.2 & J6.2 |
Low internal generation levels |
Maximum and medium |
2008 |
N/A |
2007 |
||||||
Base load plus 10% |
|||||||||||
J5.3 & J6.3 |
Low internal generation levels |
Maximum and medium |
2004 |
N/A |
2004 |
||||||
Base load plus 20% |
|||||||||||
J7.1 & J8.1 |
Very low internal generation levels |
Maximum and medium |
2004 |
2006 |
2004 |
||||||
Base load case |
|||||||||||
J7.2 |
Very low internal generation levels |
Maximum |
2001 |
2002 |
2001 |
||||||
Base load plus 10% |
|||||||||||
J7.3 |
Very low internal generation levels |
Medium |
2001 |
2001 |
2001 |
||||||
Base load plus 20% |
|||||||||||
J7.4 & J8.4 |
Very low internal generation levels |
Maximum and medium |
2011 |
N/A |
2008 |
||||||
Base load less 10% |
|||||||||||
J8.2 |
Very low internal generation levels |
Medium |
2001 |
2002 |
2001 |
||||||
Base load plus 10% |
|||||||||||
J8.3 |
Very low internal generation levels |
Medium |
2001 |
2001 |
2001 |
||||||
Base load plus 20% more |
|||||||||||
NOTES: |
|||||||||||
NA= "not applicable". Derating was only done for the baseload, baseload plus 10% and baseload plus 20% load runs under the |
|||||||||||
* For some or all of the years, there may be insufficient external resources for import to meet all of the load demand within California. | |||||||||||
** Scenario with Post-2004 Retirements includes derating. |
|||||||||||
Table 3 |
||||||||||
SUMMARY OF RESULTS: SCENARIOS WITH NO RETIREMENTS AND ISO OUTAGE FIGURES | ||||||||||
WITH UPDATED TRANSFER CAPABILITY AND DERATE CONSISTENTLY APPLIED | ||||||||||
Case # |
Description of Load |
Availability of External |
Year That New Line Needed |
|||||||
and Internal Generation |
Generation Levels |
(2001-2011 Planning Period) * |
||||||||
With Derate |
Without Derate |
|||||||||
J1.1, J1.2 |
Maximum internal generation |
Maximum and medium |
after 2011 |
after 2011 |
||||||
J1.3, J1.4 |
Baseload, Baseload plus 10% |
|||||||||
J1.5, J1.6 |
Baseload plus 20% |
|||||||||
J3.1, J3.2 |
Baseload less 10% |
|||||||||
J3.3, J3.4 |
Baseload less 20% |
|||||||||
J3.5, J3.6 |
Average Load |
|||||||||
J2.1, J2.2 |
Medium internal generation |
Maximum and medium |
after 2011 |
after 2011 |
||||||
J2.4, J2.5 |
Baseload, Baseload plus 10% |
|||||||||
J2.6, J4.1 |
Baseload less 10%, less 20% |
|||||||||
J4.2, J4.4 |
Average load |
|||||||||
J4.5, J4.6 |
||||||||||
J5.1, J5.2 |
Low internal generation |
Maximum and medium |
after 2011 |
after 2011 |
||||||
J5.4, J5.5 |
Baseload, Baseload plus 10% |
|||||||||
J5.6, J6.1 |
Baseload less 10%, less 20% |
|||||||||
J6.2, J6.4 |
Average load |
|||||||||
J6.5, J6.6 |
||||||||||
J7.4, J7.5 |
Very low internal generation |
Maximum and medium |
after 2011 |
after 2011 |
||||||
J7.6, J8.4 |
Baseload less 10%, less 20% |
|||||||||
J8.5, J8.6 |
Average load |
|||||||||
J2.3 &J4.3 |
Medium internal generation levels |
Maximum and medium |
after 2011 |
after 2011 |
||||||
Base load plus 20% |
||||||||||
J5.3 & J6.3 |
Low internal generation levels |
Maximum and medium |
2011 |
2011 |
||||||
Base load plus 20% |
||||||||||
J7.1 & J8.1 |
Very low internal generation levels |
Maximum and medium |
2010 |
after 2011 |
||||||
Base load |
||||||||||
J7.2 & J8.2 |
Very low internal generation levels |
Maximum and medium |
2007 |
2009 |
||||||
Base load plus 10% |
||||||||||
J7.3 & J8.3 |
Very low internal generation levels |
Maximum and medium |
2004 |
2004 |
||||||
Base load plus 20% |
||||||||||
NOTES: |
||||||||||
NA= "not applicable". |
||||||||||
* For some or all of the years, there may be insufficient external resources for import to meet all of the load demand within California. | ||||||||||
Table 4 |
||||||||||
SUMMARY OF RESULTS: SCENARIOS WITH RETIREMENTS AND CEC OUTAGE FIGURES |
||||||||||
WITH UPDATED TRANSFER CAPABILITY AND DERATE CONSISTENTLY APPLIED | ||||||||||
Case # |
Description of Load |
Availability of External |
Year That New Line Needed |
|||||||
and Internal Generation |
Generation Levels |
(2001-2011 Planning Period) * |
With Post-2004 | |||||||
With Derate |
Without Derate |
Retirements** | ||||||||
J1.1, J1.2 |
Maximum internal generation |
Maximum and medium |
after 2011 |
after 2011 |
after 2011 | |||||
J1.3, J1.4 |
Baseload, Baseload plus 10% |
|||||||||
J1.5, J1.6 |
Baseload plus 20% |
|||||||||
J3.1, J3.2 |
Baseload less 10% |
|||||||||
J3.3, J3.4 |
Baseload less 20% |
|||||||||
J3.5, J3.6 |
Average Load |
|||||||||
J2.4, J2.5 |
Medium internal generation |
Maximum and medium |
after 2011 |
after 2011 |
after 2011 | |||||
J2.6, J4.4 |
Baseload less 10%, less 20% |
|||||||||
J4.5, J4.6 |
Average load |
|||||||||
J5.4, J5.5 |
Low internal generation |
Maximum and medium |
after 2011 |
after 2011 |
after 2011 | |||||
J5.6, J6.4 |
Baseload less 10%, less 20% |
|||||||||
J6.5, J6.6 |
Average load |
|||||||||
J2.1, J4.1 |
Medium internal generation |
Maximum and medium |
after 2011 |
after 2011 |
2011 | |||||
|
Baseload |
|||||||||
J5.1, J6.1 |
Low internal generation |
Maximum and medium |
after 2011 |
after 2011 |
2009 | |||||
|
Baseload |
|||||||||
J7.6, J8.6 |
Very low internal generation |
Maximum and medium |
after 2011 |
after 2011 |
after 2011 | |||||
Average load |
||||||||||
J2.2 & J4.2 |
Medium internal generation levels |
Maximum and medium |
2011 |
after 2011 |
2008 | |||||
Base load plus 10% |
||||||||||
J2.3 & J4.3 |
Medium internal generation levels |
Maximum and medium |
2007 |
2007 |
2006 | |||||
Base load plus 20% |
||||||||||
J5.2 & J6.2 |
Low internal generation levels |
Maximum and medium |
2009 |
2009 |
2007 | |||||
Base load plus 10% |
||||||||||
J5.3 & J6.3 |
Low internal generation levels |
Maximum and medium |
2005 |
2005 |
2005 | |||||
Base load plus 20% |
||||||||||
J7.1 & J8.1 |
Very low internal generation levels |
Maximum and medium |
2004 |
2007 |
2004 | |||||
Base load case |
||||||||||
J7.2 |
Very low internal generation levels |
Maximum |
2004 |
2004 |
2004 | |||||
Base load plus 10% |
||||||||||
J7.3 |
Very low internal generation levels |
Medium |
2001 |
2001 |
2001 | |||||
Base load plus 20% |
||||||||||
J7.4 & J8.4 |
Very low internal generation levels |
Maximum and medium |
2007 |
after 2011 |
2006 | |||||
Base load less 10% |
||||||||||
J8.2 |
Very low internal generation levels |
Medium |
2004 |
2004 |
2001 | |||||
Base load plus 10% |
||||||||||
J8.3 |
Very low internal generation levels |
Medium |
2001 |
2001 |
2001 | |||||
Base load plus 20% more |
||||||||||
J7.5, J8.5 |
Very low internal generation |
Maximum and medium |
2011 |
after 2011 |
2007 | |||||
|
Baseload less 20% |
|||||||||
|
||||||||||
NOTES: |
||||||||||
NA= "not applicable". |
||||||||||
* For some or all of the years, there may be insufficient external resources for import to meet all of the load demand within California. |
Figure 1 -Summary of Planning Scenario 1
Figure 2 - Summary of Scenario 2 -
CEC's Alternate Retirement and Outages Assumptions
************ APPEARANCES ************ |
Scott Blaising |
Marcie Milner |
Douglas K. Kerner |
Gayatri Schilberg |
Barry F. Mc Carthy |
Don Schoenbeck |
Steven C. Nelson |
Keith Mc Crea |
Maury Kruth |
(END OF ATTACHMENT 1)
ATTACHMENT 2
LIST OF ACRONYMS
AB Assembly Bill
ALJ Administrative Law Judge
Board Board of Governors of the California Independent
System Operator
Btu British thermal units
CEC California Energy Commission
CFE Comision Federale de Electricidad
Coral Power Coral Power L.L.C.
CPCN Certificate of Public Convenience and Necessity
D. Decision
Exh. Exhibit
ISO California Independent System Operator
Joint Parties California Independent System Operator, California
Energy Commission, Southern California Edison
Company, and San Diego Gas & Electric Company
kWh kilowatt hour
MW megawatt
Path 45 SDG&E/Mexico transmission intertie
PG&E Pacific Gas and Electric Company
PHC Prehearing Conference
RFP Request for Proposals
RT Reporter's Transcript
SCE Southern California Edison Company
Scenario 1 Joint Parties' Planning Scenario
SDG&E San Diego Gas & Electric Company
Southwest Arizona, Nevada or Mexico
SSRC Save Southwest Riverside County
"the utilities" San Diego Gas & Electric Company and
Southern California Edison Company, collectively
WSCC Western System Coordinating Council
(END OF ATTACHMENT 2)