Formula for RPS Transmission Costs on the Table

Utilities would be required to cover the cost of line upgrades needed to carry renewable juice from more than one project under a new transmission cost methodology decision. Rules clarifying costs are one of the prerequisites to the launch of California?s long-awaited renewables portfolio standards (RPS) solicitation. California Public Utilities Commission administrative law judge Charlotte Terkeurst?s April 2 ruling defers many thorny questions about costs for new transmission but provides a way to quantify those costs. Terkeurst rejected a push by the California Wind Energy Association (CalWEA) and other wind developers to have network benefits factored into the cost equation for renewables bids. ?Holding hearings to address network benefits may not improve the accuracy of transmission cost estimates and would delay initial procurement,? said Terkeurst. However, the first green power solicitation is expected to be stalled. CPUC president Michael Peevey asserted that it would take place in June. But last week, another administrative law judge said the process could be delayed because of additional time needed to develop other RPS ground rules. Along with transmission cost calculations and contract terms, a benchmark price for renewables contracts must be in place before the first round of the solicitation can proceed. The potential delay is not expected to undermine the legislative goal of private utilities reaching 20 percent renewables by 2017, according to Rachel McMahon, policy analyst for the Center for Energy Efficiency and Renewable Technologies. Though Southern California Edison claims to be close to that target, Pacific Gas & Electric and San Diego Gas & Electric have been pushing hard to obtain green power through the solicitation, McMahon added. The cost issue got tangled up in disputes over who should bear the up-front transmission costs. Southern California Edison rejected the idea that it should pay any up-front price tag. Pacific Gas & Electric, on the other hand, said that it would reimburse renewables developers with interest in five years for upgrades. Nancy Rader, executive director of CalWEA, said the group was disappointed that network benefits won?t be taken into account at this point. Renewables developers ?shouldn?t be dinged by costs of upgrades? that will bring benefits to the grid, she said. As its starting point, Terkeurst?s proposal uses PG&E?s method for developing transmission costs. This approach calls for utilities to divide renewables bidders into geographic ?clusters? based on substations to which renewables would most likely connect. To identify upgrades needed for each cluster, utilities would rely on conceptual transmission studies.

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Formula for RPS Transmission Costs on the Table

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