Edison Proposes Solution to Wind Transmission Logjam

Southern California Edison hopes to break the stalemate over who pays for the transmission system to bring wind power from the Tehachapis to its customers. The utility expects to ask the California Public Utilities Commission December 10 for approval for new transmission lines. Officials said they will soon file with the Federal Energy Regulatory Commission for a new type of transmission financing to pay for the project through rolled-in rates. "We [will] propose to FERC what may be considered a third category" of transmission project, Ron Nunnally, Edison director of federal regulations and contracts, explained. The new category would be a "trunk line," and the cost of building it, if approved, would be rolled into rates. "I think this should make everybody happy," he added. "This breaks the logjam," agreed Hal Romanowitz, Oak Creek Energy president. He said that while a new transmission system category might not be necessary to get the project built with rolled-in rates, it would bring clarity to wind transmission problems. Oak Creek currently has 34.5 MW of wind turbines in the Tehachapi area, with another 600 MW in development. The proposals address the bitter stalemate between wind developers and the utility. Developers say they cannot afford to build transmission lines to hook up their facilities. Edison was ordered by the CPUC 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. Meanwhile, the California Energy Commission is pressuring Edison to commit to more renewables in its portfolio than the state?s other utilities because of the wealth of wind power the Tehachapis promise. Edison's plan would create a transmission category called "trunk line," which are expected to qualify for rolled-in rates. Currently, Nunnally said, FERC categorizes the transmission link between the generator and the utility as a "gen tie"--the cost of which is typically borne by the developer. The other existing category is "network upgrades," the costs of which are rolled into rates. The proposed 500 kV lines linking the Antelope substation to Mojave could come under the new category, if approved by FERC. Edison also plans to ask federal regulators to create a precategorization process, so utilities will know ahead of time what transmission lines fit into which category. Edison officials presented the idea to FERC staff last week at a meeting in Denver. According to sources, FERC supports the plan and could act quickly. Parallel with the FERC process, Edison is expecting to file today with the CPUC for a certificate of public convenience and necessity for the Antelope project. The 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. The first two would "probably pretty clearly be network upgrades," Nunnally said. The last two might be considered gen ties. But if approved, they would be in the new category--or at least the 26-mile section could be. Romanowitz notes that he understands that the project is to be created in a loop--which meets the test for FERC's existing network segment category--and thus will qualify for rolled-in ratemaking treatment even without a new category of transmission system financing being created. Even though the regulatory processes still lie ahead, Nunnally believes that the project could start in less than two years.

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Edison Proposes Solution to Wind Transmission Logjam

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