Consumer Advocate Says Grid Operator’s Planning Overkill

By Published On: April 30, 2010

The California Independent System Operator’s transmission plans jeopardize public policy goals and consumer interests, says a report by a consumer advocacy group. The high voltage blueprint entails “one-sided incentives, arbitrary need determinations, and inadequate regulatory oversight for transmission planning,” said Jaleh Firooz, who authored the report for the Utility Consumers’ Action Network. “This combination creates a toxic brew of transmission initiatives that are at odds with the state’s energy policy goals,” added Firooz, a professional engineer and former utility transmission planner. CAISO rebutted the study’s conclusions. The report is “confusing and premature at best,” said Gregg Fishman, CAISO spokesperson. Firooz contends that the existing regulatory approval processes doesn’t provide adequate consumer protection; the perception of a transmission shortage is incorrect; and that the CAISO’s generator interconnection process actually disrupts progress toward renewable energy goals. According to the report, CAISO has failed to establish that most proposed transmission projects are economically preferable to other feasible alternatives; that investor-owned utilities have been “unduly aggressive” in proposing and building new transmission; that existing reliability criteria are “overly rigid;” and that existing economic evaluation practices are “too unprincipled.” The study made several recommendations, including creating a performance-based ratemaking mechanism that ties investor-owned utility profits to how well their existing transmission assets are used; modifying the methodology of transmission planning and reliability evaluation criteria; and eliminating the priority now given to existing generation when evaluating delivery network upgrades. Fishman took aim at the report’s recommendation to loosen reliability standards as a means to reduce transmission investment, noting the consequences could be grave. “The report appears to pre-judge the outcome of the current statewide renewable transmission planning process, which doesn’t conclude until the end of this year,” Fishman added. Federal stimulus dollars to promote alternative energy enabled CAISO to move up by five months technical studies for more than 50 active projects in the Phase 2 of its transition cluster, representing more than 10,000 MW of new generation, 8,000 MW of which is renewable power, he said.

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