JUICE: Transmission 101 (Redacted)

When I burst into song outside the shower family members groan. When joining in a sing-along, people close by plug their ears closest to me. I once hoped to remedy my two left vocal chords. I signed up for singing lessons. The coach said it was “possible” for me to learn to sing well. Notice she said possible, not probable. Months later, Ave Maria was not part of my repertoire--or even in my distant future. I decided to save money, spare my ego and give up the lessons. This “possible” versus “probable” matter is also at the heart of the queue of renewable projects hoping to get permitted and line up financing before the end of the year. Is it possible for a few thousand megawatts of solar and wind projects slated for desert lands to reach that dream within 11 months? Sure. Probable it is not, though I and many others wish it were. Consider one of the stickier issues--the costs of connecting power projects to the grid. I talked with numerous stakeholders--from agency and utility staff to renewable developers and consultants--and asked them to estimate their interconnection costs and likelihood of project success. Most were hopeful and not too many fingers were pointed, but no one could provide specifics. Few knew what the interconnection cost would be and several admitted they didn’t understood the complex transmission process. I found much information was under seal, difficult to untangle, and opaque. Below I outline some key stanzas of the intricate interconnection-transmission score, and why costs are a big black silent jukebox. Developers are responsible for the upfront costs of linking their facility to the transmission highway. These costs apply to all projects, including solar and wind and fossil fueled ones. Who pays the upfront costs--independent developer or utility--has long been the source of much contention. The interconnection cost includes those associated with the line from the generating facility to the high voltage system and those arising from the grid impacts of sending in new power. That includes if additional flow creates congestion and mitigating that impact. The grid operator conducts in depth interconnection cost studies. Last year, the California Independent System Operator did a rough estimate of the costs of hooking hundreds of new renewable projects to the grid. To bolster the state’s efforts to reach a 33 percent renewable energy standard, CAISO moved from conducting project specific interconnection studies to group or cluster studies. CAISO’s preliminary estimate of the interconnection costs stunned nearly all the participants. “I thought they made a mistake of at least one or two zeros,” said Susan Schneider, Phoenix Consulting. “More than 60 percent of the project costs were more than $100 million.” The huge estimates in CAISO’s swansong greatly shrunk the bloated siting queue, which some agree was a good thing. A number of the projects were not considered viable.. Since then, CAISO has been fine tuning its interconnection estimates for a far smaller cluster of renewable projects--including several slated for the Southern California desert that seek federal funds and must begin construction before the year’s end to qualify. The grid operator’s study is expected to be completed in June. Its findings, however, will be confidential and only accessible to utilities and developers involved. “They are confidential because it discusses costs for specific projects,” said Gregg Fishman, CAISO spokesperson. I don’t want to see project costs driven up but I want to know the price. The cost is going to be as big as an opera diva. Not only is the tab going to be significant it will ultimately be borne by ratepayers. Transmission upgrades and new lines are expected to be necessary to accommodate projects--be it alternative or fossil fuel resources--in Southern California that send energy north. The Tehachapi transmission project stretching from Bakersfield to San Bernardino, for example, is about $1.4 billion, “It is a giant interconnection project,” said Scott Logan, Division of Ratepayer Advocates regulatory analyst. Renewable developers and consultants were unable to shed light on the amount in question, which depends largely on the distance from the project to the point of interconnection. They also are a big deal to most renewable developers as the costs and accompanying interconnection conditions determine whether a wind, solar or other developer whistles all the way to the bank or is muted. Interconnection costs “vary widely and are not very predictable,” said Alan Bernheimer, First Solar spokesperson. Another said the price ranged from negligible to 20 percent of a project’s cost. Those of us not party to the interconnection study and deals may be in the dark but after their limited release, the developer, CAISO and utility sign an interconnection agreement--if the cost is in an acceptable range. This Large Generation Interconnection Agreement both helps assure the renewable developer can secure financing and attach to a utility substation or other point along the high voltage system. If a solar, wind or other developer scores both certification and financing, after its project goes on line its interconnection costs are paid back by ratepayers over a five-year period under a Federal Energy Regulatory Commission approved tariff. State regulators approve power purchase agreements between a utility and renewable developer, which also are essential for project financing for the latter. The estimated costs of transmission upgrades are included, but are based on separate transmission ranking reports filed by each utility with the CPUC. State regulators keep these power agreements secret. Contemplating the complexity, tight time frame, secrecy, and high costs involved in this year’s round of renewable projects is about as enjoyable as listening to American Idol auditions. It is possible that most of the wannabe singers may have more than a few minutes of glory, but not probable. Reaching California’s long term one-third renewable energy goal too is possible, but also probable if the singers can stay in tune and play in time. “The tougher task is to figure out how to do transmission planning, siting and permitting better in future years,” said Michael Picker, the governor’s senior renewable energy advisor. If California is to attain its 33 percent renewable dream, the terms of the deals have to be transparent and understandable to keep utilities, project developers and renewable advocates from getting pelted with rotten tomatoes and booed off the stage.

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JUICE: Transmission 101 (Redacted)

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