RE: I.00-11-001, Transmission and Renewable Resources

Dear Judge Gottstein:

Pursuant to your request at the recent Prehearing Conference (PHC) in this docket, the California Energy Commission (Energy Commission) is pleased to provide the following information concerning our July 1 draft resource assessment.

As you know, Senate Bill 1038 (Chapter 515, Statutes of 2002, [SB 1038]) requires the Energy Commission to develop a renewable resource plan by December 1, 2003. This resource plan will serve as the basis for the transmission plan that SB 1038 requires the California Public Utilities Commission (CPUC) to develop. There was considerable discussion about the nature of the Energy Commission's July 1 draft renewable resource plan during the January 14th PHC. Accordingly, we are providing the following description of what that product will and will not contain.

By way of background, the staffs of the CPUC and Energy Commission have been discussing what the CPUC will need in order to prepare its transmission plan and by when. The Energy Commission will ensure that its staff continues to coordinate with the CPUC throughout this proceeding as well. Since, as we understand it, the goal of this first renewable transmission assessment is to determine whether certain transmission upgrades need to be evaluated at a project-specific level, we plan to focus on the planning years that the California Independent System Operator (CAISO) will be using for its 2003 grid planning study-2005 and 2008.

On July 1, the Energy Commission will provide to the CPUC a preliminary renewable resource assessment which will assume a level of renewable development in 2005 and in 2008 sufficient to allow Pacific Gas & Electric, Southern California Edison, San Diego Gas & Electric, and any other "obligated entities" to achieve the incremental Renewable Portfolio Standard (RPS) goals embodied in Senate Bill 1078 (Chapter 516, statutes of 2002). We will be providing an opportunity for public input into the development of this

ATTACHMENT 1

renewable resource assessment, and we welcome the comments of the CPUC, the utilities, the CAISO and renewable developers. We will publish an initial draft of the assessment by early June and request public comment on the draft.

The resource assessment will provide renewable megawatt additions for the transmission plan's target years by technology type and by renewable resource locations, e.g., Tehachapi, Salton Sea, San Gorgonio, Altamont, and Siskiyou County. We will also include an analysis of renewable resource potential by technology type and location, as SB 1038 requires. This analysis will provide transmission planners with some basis for developing bounding cases for renewable resource development.

While the assessment will be as detailed as it can reasonably be, it will not contain project-specific information. It is speculative to assume that any given project will emerge as a winner in a future RPS solicitation, since rules for this solicitation have not yet been established. Further, since the Energy Commission's SB 1038 renewable resource plan is not due until December 2003, the July 1 assessment will be preliminary. New information could become available after July that may alter our assumptions. Still, the plan should permit a reconnaissance level analysis of current and/or potential transmission constraints. In addition, the Energy Commission staff will continue to collaborate with the CPUC staff after July 1, so that both the Energy Commission's renewable resource plan and the CPUC's renewable transmission plan remain as coordinated as possible as they are developing.

I hope the above information is responsive to your request.

Sincerely,

Jennifer Tachera

Staff Attorney

California Energy Commission

cc: Service List for I. 00-11-001

(END OF ATTACHMENT 1)

ATTACHMENT 2

Page 1

Scope of Work For SB 1038 Renewable Transmission Study

The Purpose of the Study

Senate Bill (SB) 1038 requires the California Public Utility Commission to provide a transmission plan for renewable electricity generating facilities by December 1, 2003. The purpose of this study is to present information to the Legislature about transmission upgrades that may be needed to interconnect and deliver new renewable generation. The study will focus on identifying the scope and costs of new transmission facilities, potential new line routes, potential new substation locations and, as appropriate, critical issues that might affect the development of those facilities.

Scope of Work

The study will examine how the utilities' transmission network may need to be expanded to accommodate the renewable generation identified in the California Energy Commission's (CEC) July 1, 2003 preliminary renewable resource assessment. In cases where there is congestion between the point of insertion into the grid and the load center, the study will also identify the facilities needed to relieve the congestion.

Under companion legislation SB 1078, which establishes the Renewable Portfolio Standard (RPS) Program, the utilities are required to develop procurement plans that include a solicitation of renewable generation resources to meet the statutory goals. However, those procurement plans are currently under development, and the results of the first solicitation will not be available in time for inclusion in the Commission's report to the Legislature. Therefore, the SB 1038 transmission study will not, by definition, take a position on which potential renewable generation facilities might actually be developed. The study will present a renewable transmission expansion plan that will require further refinements, once the results of the RPS solicitations are known, and specific interconnection studies have been undertaken. However, it will present an informative, broad plan that identifies cost-effective expansions to the transmission grid in response to the CEC's preliminary assessment, as described further below.

The following sections provide further direction on the scope of work for the utilities' proposed plans and the Commission's report to the Legislature:

1. The utilities shall each formulate a plan for connecting to the electrical network the new renewable resource generation identified by the CEC. The plans will provide for phased construction, e.g., single 230 kV circuit on double circuit towers in 2005, second 230 kV cicuit strung in 2008, as appropriate to accommodate the renewable generation development identified in the CEC's assessment. Each utility's plan shall include all the transmission facilities, including new lines and substations and upgrades to existing lines and substations, to transmit the power from the power sources to the load centers. In the case of geothermal sources, the transmission will connect to the takeoff structure at the power plant switchyard. In the case of wind farms, the transmission will start

ATTACHMENT 2

Page 2

with the substation used to transform the medium voltage of the feeders from the wind farm to transmission voltage for insertion into the grid. Standard reliability criteria will be applied to the generator transmission connections, that is, remedial action schemes will be depended upon rather than redundant circuits for mitigating the effects of forced line outages. As described further in #3 below, in cases where there is congestion between the point of insertion into the grid and the load center, the utilities will identify the level of congestion and identify the facilities needed to relieve the congestion.

2. In developing their plans, the utilities will utilize the base case transmission plans currently being developed through the ISO's grid planning process, and assess modifications to the base plan in response to the CEC's July 1, 2003 preliminary renewable resource assessment. In that assessment, the CEC will identify for the years 2005 and 2008 new renewable resources in terms of general location and megawatt (MW) capacity. The report will most likely identify a resource as being of a certain type (geothermal, wind, etc.), of a certain capacity (MW), and in a general area. For the purpose of formulating the transmission plan, the utilities will need to make certain assumptions. For instance, if the preliminary report specifies 500 MW of geothermal power within a 100-mile radius of a given location, the plan could assume two 200 MW power plants and one 100 MW power plant at different points on the 100-mile periphery of the location. Similarly, assumptions will have to be made regarding the size and location of the wind farm substations. These assumptions will be based on the utilities' experience with existing facilities, including the responses to their solicitations to renewable generation developers for interconnection studies and the evidentiary record developed in this proceeding (e.g., the Tehachapi transmission project).

3. For each renewable generation cluster, the utilities are to identify possible transmission congestion beyond the first point of interconnection that would result if all of the identified renewable generators in such cluster won bids and signed contracts to provide "must-take" energy under the RPS Program. Potential transmission upgrades that may eliminate the congestion will be identified. For congestion that also involves conventional generators, different levels of transmission upgrades should be identified assuming a) the energy from all renewable generators in the cluster is "must-take" and the upgrade only eliminates congestion for such renewable energy; and b) the upgrade eliminates congestion for all generation on the relevant transmission facilities.7

ATTACHMENT 2

Page 3

4. For each identified transmission project, the utilities will provide the transmission line voltage, approximate routing and substation modifications in general terms, along with conceptual engineering design information, including geographical maps and simplified electric diagrams. This information will be formulated based on the utility's engineering experience and will not necessarily require power flow network simulations. The utilities will also include cost estimates for each project at the conceptual level based on the utility's experience for each major category of project cost, e.g., conductor and breakers. In addition, the utilities will provide cost ranges for land acquisition, mitigation of anticipated environmental impacts, and other costs, as appropriate. Discussion should be provided where more than one transmission upgrade alternative is identified, or where multiple stages are warranted. Discussion should be provided regarding possible right-of-way issues and potential environmental issues encountered with the transmission line routing.

5. The utilities are expected to provide the information outlined in #3-#5 above for transmission projects related to renewable generation that have already been studied in accordance with the ISO's and utility interconnection tariffs. This information may be presented in appendices to the transmission study.

6. The utilities may provide some of the information required under this Scope of Study under Public Utilities Code §583, as appropriate. However, the utilities are advised that Commission's report to the Legislature will need to contain project cost ranges for each identified transmission expansion project. The utilities should work with Energy Division in developing a format for presenting that information in a public version of their proposed plans and in the December 1, 2003 Commission report, possibly using a format similar to the one developed for the cost information submitted in each monthly status reports.

(END OF ATTACHMENT 2)

CERTIFICATE OF SERVICE

I certify that I have by mail this day served a true copy of the original attached Administrative Law Judge's Ruling on Development of Renewables Transmission Plan Pursuant to Senate Bill 1038 on all parties of record in this proceeding or their attorneys of record. In addition, service was also performed by electronic mail.

Dated February 26, 2003, at San Francisco, California.

/s/ FANNIE SID

Fannie Sid

NOTICE

Parties should notify the Process Office, Public Utilities Commission, 505 Van Ness Avenue, Room 2000, San Francisco, CA 94102, of any change of address to insure that they continue to receive documents. You must indicate the proceeding number on the service list on which your name appears.

7 An evaluation of how the market may value congestion, or how the market could manage potential congestion (as an alternative to expanding transmission) is beyond the scope of this initial study. However, this type of evaluation may be required in future refinements of the transmission plan, once the winning renewables bidders are identified.

Previous PageTop Of PageGo To First Page