Edison Files New Transmission Funding Plan

Southern California Edison asked federal regulators to approve a new method to fund a set of transmission projects that would carry wind power from the Tehachapis to utility customers. If approved by the Federal Energy Regulatory Commission, the plan could break the logjam preventing access to major renewable power development. Edison's petition, filed at FERC March 23, would have ratepayers pay for three transmission projects and assure the utility of recovery of its costs. Cost recovery would be guaranteed even if developers' plans for more wind turbines do not materialize, and/or Edison decides to abandon or cancel its transmission projects. The plan would eliminate the utility's risks and negate potential disallowances. "Edison requests that the commission remove perceived barriers to investment in new high voltage, trunk-line transmission facilities necessary to interconnect to large concentrations of potential renewable generation resources located a reasonable distance from the existing grid," states the filing. The filing, which came two months later than the utility predicted, would have FERC declare a new category of transmission facilities dedicated to renewables. If the plan is approved, regulators will be making an exception to their nondiscriminatory-access rule, because it would be built for transmitting renewable power. Edison is asking for precedent-setting rules. Regulatory approval would ease and possibly end the bitter stalemate between wind developers and the utility. Developers say they cannot afford to build transmission lines to hook up to their facilities. Edison was ordered by the California Public Utilities Commission in June 2004 to pay for the transmission project up front but balked at that order, taking the case to court. Edison won its case in the Second District California Court of Appeal, arguing that the CPUC is federally preempted from issuing such an order. "The filing clearly shows why it has been and continues to be so hard to get transmission built," said Hal Romanowitz, Oak Creek Energy president. "The general outline by Edison should set up this issue for an effective resolution at FERC for a problem that is much broader than just Tehachapi." Oak Creek currently has 34.5 MW of wind turbines in the Tehachapi area, with another 600 MW in development. Edison's Tehachapi high-voltage project is conceived in three parts: a 25.6-mile 500 kV line from Antelope to Pardee (near Santa Clarita); a 17.8-mile 500 kV line from Antelope to Vincent (near Palmdale); and a 26-mile 500 kV line from Antelope to Tehachapi with a new substation in the Mojave area. Another 9.4-mile 220 kV line would run from there to the Monolith area. FERC Must Null Cost Risk, Says Tehachapi Study Group An exhaustive study of how to bring to fruition 4,000 MW of new wind resources in the Tehachapi area found that Southern California Edison?s plan to create a new category of transmission funding at the Federal Energy Regulatory Commission?or some state method to mitigate utility investment risk?is essential. Capitalizing on the wind potential of the Tehachapis ?depends on FERC approving these transmission facilities as eligible for cost recovery in transmission rates,? notes the March 16 report of the Tehachapi Collaborative Study Group to the California Public Utilities Commission. The report suggests four phases of transmission development to allow for flexibility. The CPUC would have to decide the level of development needed to trigger the next phase of building. The study group suggests that phase 1 allow for 700 MW at a cost of $207 million; phase 2 for 900 MW at a cost of $281 million; phase 3 for 1,700 MW at a cost of $1 billion; and phase 4 for 1,200 MW at a cost of $750 million.

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Edison Files New Transmission Funding Plan

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