Sunrise Transmission Shall Rise, Says CPUC

California regulators approved San Diego Gas & Electric’s controversial Sunrise Powerlink transmission line December 18. The 4-1 decision requires the California Public Utilities Commission to take a closer look two months down the road at ways the high voltage line can tap into potential renewable projects in the Imperial Valley. Regulators rejected an alternative plan that would have required the utility to use the line to transmit renewable power. That alternative, by commissioner Dian Grueneich, noted that the proposed $2 billion transmission line has promise--but not commitment--from utility officials to increase renewable energy in the company’s portfolio, particularly in the Imperial Valley that is set to host part of the new line. Supporting the authorization decision by commission president Mike Peevey, commissioner John Bohn said he trusts SDG&E will stick to its promise to grow its alternative power portfolio. “It’s in the corporation’s self-interest to be taken seriously,” said Bohn. While some commissioners noted the high cost of the project, most said its potential to reduce greenhouse gas emissions and create jobs in the Imperial Valley--which reports about 20 percent unemployment--is worth the ratepayer investment. Grueneich, the single opponent on the commission, noted that SDG&E shareholders would reap $1.5 billion from capital investments over the life of the transmission line. “It is not our money. It is not SDG&E’s money. It is ratepayer money,” she said. “I’m not willing to surrender $2 billion of ratepayer money to the invisible hand of the market.” Over time, the initial $2 billion investment would reap interest payments from ratepayers on top of the cost of building the line. Currently, equity investments by utilities are paid back at around 11 percent, hence Grueneich’s $1.5 billion estimate. The transmission project sparked significant public involvement over the three years it moved through the regulatory process--public involvement not seen by regulators in decades. Proponents involved in the commission’s hearings promoted the line as a method to bring renewable energy to urban San Diego areas. “The CPUC’s approval of the Sunrise Powerlink today will help pave the way toward achieving the state’s aggressive environmental and energy policy goals,” stated Debbie Reed, SDG&E president and chief executive officer. ”Reliable transmission infrastructure is critically needed to reinforce the region’s electric system and to open up new avenues for delivering green energy to our customers.” Detractors recommended distributed generation near load centers instead of bringing in potential renewable power from desert areas. Grueneich noted, too, that the line can bring in fossil fuel power from plants in Mexico, owned byy sister corporations of SDG&E. The administrative law judge in the case had recommended against building the line. In other renewable energy-related regulatory news, the commission pulled its annual market price referent decision off the consent calendar in order to discuss it under current market circumstances. While commissioners voted unanimously to approve the base price of renewable energy for contracts with utilities, it did note that its price is based on forecasts made in the spring of 2008--a time when natural gas prices were two and three times what they are today. Gas prices remain volatile. The market referent is a benchmark used to assess the reasonableness of renewable energy. It is based on natural gas prices. Renewable power that costs more than the CPUC referent may be eligible for subsidies Figuring out the referent price “is very tricky,” said Peevey. The commission also agreed to open a “smart grid” docket. The order allows regulatory staff and the public to review standards and protocols for the next generation transmission and distribution system. According to commissioner Tim Simon, the process seeks “clarity” to define what a smart grid may be. Commissioners also believe that by opening the docket, California can lead the rest of the nation in developing a smart grid.

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Sunrise Transmission Shall Rise, Says CPUC

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