On March 23, 2012, the California Independent System Operator Corporation (“California ISO”) approved its “2011-2012 Transmission Plan” which identifies thirty projects needed to maintain reliability. Those thirty projects are projected to cost $691 million. Approved transmission projects in the California ISO can be identified as a reliability, public policy, or economic upgrade. Reliability projects are analyzed on a 10-year planning horizon where facilities are evaluated based on whether they would be compliant with the mandatory reliability standards established by NERC and the California ISO. No new economic projects were approved this year, and the new plan also reaffirmed that the projects approved from previous years are sufficient to meet the additional requirements of the state’s goal of meeting a 33% renewable portfolio standard by the year 2020.
Interestingly, none of the thirty approved reliability projects are from independent or non-incumbent transmission developers. Last year FERC released Order No. 1000 requiring planning regions to remove a right of first refusal for incumbent transmission owners from their respective tariffs (see July 22, 2011 edition of the WER). The California ISO has since made changes to its tariff to allow for a competitive bidding process for “reliability-driven elements” that provide economic or policy benefits. The California ISO identified five potential upgrades that could be developed from a bidder, but the California ISO ultimately determined those projects do not provide sufficient economic or policy benefits to warrant opening up the project to non-incumbent developers.
The three largest approved reliability projects, worth a combined cost of $280 million, are Pacific Gas & Electric’s (“PG&E”):
- New Bridgeville-Garberville No. 2 115 kV Line Project;
- Embarcadero-Potrero 230 kV Underground Cable Project; and
- Kern PP 115 kV Area Reinforcement Project.
PG&E’s service territory contained a total of 22 projects. Southern California Edison Co. was approved for three reliability projects estimated to be worth $25 million, and San Diego Gas & Electric Co. was approved for five projects worth $56 million.
The transmission plan also states the California ISO’s immediate focus for the upcoming year will be on:
- obtaining approvals for identified transmission;
- renewable energy procurement; and
- revisiting procurement forecasting assumptions for use in the 2012/2013 transmission plan cycle.
A copy of the California ISO 2012-2012 Transmission Plan is available here.