Court Agrees: Sacramento Must Use CAISO Transmission

By Published On: November 4, 2005

The Sacramento Municipal Utility District has been told again that it must deal with California’s Independent System Operator when arranging power imports into its service area. The result could reflect the importance that some utilities place on the grid operator?s long-term cost certainty. The latest iteration came November 1 from the U.S. Court of Appeals for the D.C. Circuit, which upheld the Federal Energy Regulatory Commission?s decision that Sacramento “would have to take service under the CAISO tariff, the only relevant tariff since the California utilities have turned over operational control of their transmission facilities to the CAISO.” At question were transmission contracts Sacramento signed with Pacific Gas & Electric in the 1960s when the Intertie was constructed, said PG&E spokesperson Jon Tremayne. When the Sacramento contracts expired, Tremayne explained, PG&E turned the capacity over to the system operator, giving CAISO greater flexibility in operation of the state’s transmission system. However, shortly before the contracts expired at the end of 2004, the court order noted, Sacramento informed PG&E it wished to extend the contract or invoke its right of first refusal. When the utility demurred, Sacramento complained to FERC, which sent the utility district to CAISO. The court decision agreed with federal regulators that CAISO’s tariff does not contain a right-of-first-refusal provision. There’s a year-old uneasiness between the grid operator and the muni. SMUD took back its control area from the grid operator to increase its independence and save on costs. The grid operator sees the separation as creating more problems for smooth systemwide control. “For some utilities, long-term cost certainty is very important,” said CAISO spokesperson Gregg Fishman. “We are open to exploring ways that can provide some kind of long-term transmission certainty for utilities that want it without unduly encumbering the transmission capacity we control.”

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