CAISO Seeks Greater Transparency in Transmission Planning

By Published On: June 16, 2007

The California Independent System Operator launched its integrated transmission planning process for 2008 with the objective of providing greater transparency and coordination with participating transmission owners. The grid operator outlined its plan to comply with the Federal Energy Regulatory Commission?s Order 890 promoting open transparent transmission planning at a daylong stakeholder meeting June 11 in Folsom. CAISO?s transmission roadmap is expected to address resource issues and local capacity requirements, and assess the long-term economic benefits of building new transmission lines versus new generation to serve an expanding load and ensure grid reliability. ?We need to develop a consistent methodology or criteria about what we?re going to incorporate in and out of an area,? said Gary DeShazo, CAISO director of planning and infrastructure development. ?We were hoping that [transmission owners] were looking at generation offsets for transmission upgrades. We need to be very clear about the economic benefits.? Investor-owned utilities indicated that their decisions over whether to build new generation facilities or new transmission lines to serve increasing load would hinge primarily on the relative costs. If new power plants are less expensive to build utilities would likely opt for generation over transmission, they said. Southern California Edison was dealt a major setback late last month when the Arizona Corporation Commission rejected its application to construct a second transmission line from Palo Verde to the Devers substation near Palm Springs, Edison officials said. Edison assumed that the commission would approve the 230-mile transmission Devers 2 project, according to utility officials. CAISO is awaiting Edison?s decision whether to appeal the Arizona Commission?s ruling since the Palo Verde-Devers 2 transmission line was integral to the grid operator?s long-term transmission plan, officials said. Different approaches to load forecasting can significantly impact long-term resource planning, DeShazo stressed. For example, the Energy Commission?s load growth forecast for 2006-2007 varied 3.5 percent from what the CAISO envisioned. While CAISO is using the Energy Commission?s latest load forecast for 2008, the CEC and the California Public Utilities Commission are expected to adopt a new demand forecast later this month. Specifically, the CASIO needs to know what aging power plants have already been shut down or are inactive to identify areas where flexibility is needed to accommodate for units not running. The CAISO can determine which power plants are out and which are online from utilities? base rate cases before the California Public Utilities Commission. ?Our intent is to align ourselves with what the CPUC is doing with load requirements. We need to model that,? De Shazo said. CAISO?s transmission plan should also send signals about making critical resource decisions to conserve energy and help California meet its goals to reduce greenhouse gas emissions, officials said. To further these policy goals the grid operator needs to state clear preferences for demand-side management programs, renewable energy resources, on-site generation, and re-powering aging inefficient power plants instead of building more transmission lines, they said. CAISO is awaiting guidance from the regulators and the Air Resources Board on interpretation of Assembly Bill 32?s renewable energy requirements that will influence its procurement plans next year and over the long-term, DeShazo said. CAISO wants to partner with the Energy Commission in its Integrated Energy Policy Report to assess the costs and benefits of retiring aging generation identified by the CEC.

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