CEC Back in Integrated Planning Saddle; Transmission Siting Authority Discussed

Although vetting the contents of the California Energy Commission?s Integrated Energy Policy Report was the subject of two days of hearings this week, the recent Eastern blackout begged questions beyond supply and demand. The concept that the CEC might have some streamlined transmission siting authority in order to expedite the bogged-down process of new transmission infrastructure was touched upon but not yet publicly developed. ?There are cultural and institutional constraints? to efficient transmission siting. ?You have to start by suspending belief in the status quo,? Les Guliasi, Pacific Gas & Electric director of state agency relations, told a CEC panel during the August 27 and 28 hearings. ?The [California Public Utilities Commission] has not managed to stay on schedule with one of these projects.? Steven Kelly, Independent Energy Producers policy director, said that between the California Independent System Operator (CAISO), the CEC, and the CPUC, a transmission project could take between five and six years. ?It?s the least appetizing responsibility one could be given,? Bill Keese, CEC chair, commented after the meeting. He added, however, there is a ?broad recognition? that there needs to be a change in the process. For instance, the CPUC now ties the cost of a utility?s upgrade to the direct benefit of the ratepayers for that utility. ?Maybe it will benefit those ratepayers and maybe it won?t,? said Keese, adding that it may in fact benefit the entire state. The three agencies?the CEC, CAISO, and the CPUC?could develop a streamlined transmission siting process through the coordination they currently have on the energy Action Plan. CAISO could determine ?need? for new transmission, the CEC could resolve its appropriateness, and the CPUC could decide who pays for it, according to Keese. There is no indication yet out of Sacramento that there is any stomach for giving the CEC the same kind of expedited statutory authority it had for siting new generation in the wake of the energy crisis for new transmission. One source close to energy legislation expected the votes would be difficult because it would mean overriding local opposition. Another source, however, said the issue is so compelling that by the time the issue gets on the Legislature?s radar, the votes will fall in line. On the supply and demand side, the CEC has historically been set up to do such analysis. The authority was suspended, however, during deregulation, and only last year?s SB 1389 authorized the agency to reposition its old computer-modeling crown to handle the matter. In order for policy makers to decide overarching state law, the commission is supposed to give them the underlying facts of future supply availability, future prices, the influence of efficiency, and environmental protection. ?Hopefully, we will set the facts in concrete. [Then] let?s get on with discussing the policy issue,? said Keese. One part of the discussion that may or may not become a fact is the state?s seriousness about incorporating liquefied natural gas (LNG) as a feedstock for power plants and natural gas end use. Commissioner Jim Boyd repeatedly expressed concern that the state?s pipelines have enough gas to meet demand and said that LNG could fill the bill. A Sempra representative noted that those anxious to send potential Alaskan LNG to California have contacted the company after seeing Sempra?s current success with securing LNG permits in Baja California. Siting LNG terminals in the state might just be as difficult as siting new transmission lines if recent history is any indication. Environmentalists and neighbors alike drove a Bechtel/Chevron proposed plant out of Mare Island last year. LNG is extremely volatile. It also increases tanker ship traffic. More public hearings on the integrated plan are set for October. According to commissioner John Geesman, the final report goes to the governor November 1, and he (or she) has 90 days to accept it. ?There are a lot of people who think this is a long-overdue reform,? Geesman added.

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CEC Back in Integrated Planning Saddle; Transmission Siting Authority Discussed

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