S.F. Bay Underwater Transmission Line Before CAISO

San Francisco?s constrained power situation could be eased and the shutdown of the Hunters Point power plant and the neighboring Potrero unit sped up if a proposed power line connecting the power plant-rich city of Pittsburg with San Francisco is approved. The project by Pittsburg and Babcock & Brown, a financial institution in San Francisco, involves running a 50-mile DC cable under the San Francisco Bay that would carry between 350 MW and 700 MW from Pacific Gas & Electric?s Pittsburg Substation to its Potrero Substation. Next month, a California Independent System Operator stakeholder group is expected to assess the need for the project, which is estimated to begin operating in the fall of 2007, according to David Parquet of Babcock & Brown. ?We support the concept,? said CAISO spokesperson Gregg Fishman. PG&E chief financial officer Kent Harvey said he also backed the project ?if it?s doable and allows for early closure of Hunters Point.? In order for the line to proceed, CAISO must find that Babcock?s Trans Bay Cable Project meets its ?needs? criteria. Parquet said that his firm would present such findings to CAISO, adding that there is little question that the project would alleviate the city?s serious congestion problems. The Federal Energy Regulatory Commission must also agree to allowing the cost of the project and a certain profit margin to be recovered in rates. Babcock, which will provide the project financing, is seeking a FERC tariff to allow for rate-based cost recovery. That rate treatment is one of the few viable financing options in the very tight lending market, according to the company. The city of Pittsburg would own the assets, and the transmission rights would be owned by CAISO. The incentive for Pittsburg is the property tax revenue from the sizable AC-DC converter station that would be built. The city would also be given an operations and maintenance contract and accompanying fee, in addition to receiving funds for city projects, Parquet added. Babcock will ask FERC for a ruling by late summer that is contingent on CAISO approval. California Public Utilities Commission authority would not kick in because the project involves a municipal power agency. San Francisco is a major load center served from one direction in a transmission cul-de-sac. Whether the proposed Pittsburg?to?San Francisco line would allow the old PG&E plants to be decommissioned is contingent on other factors?including the success of the proposed Jefferson-Martin line and getting the city?s peaking units on line. The CPUC is expected to release a draft decision on its approval of PG&E?s proposed 27-mile 230 kV Jefferson-Martin line?running from San Mateo to San Francisco?next week or next month. In late April, three of four peakers owned by San Francisco passed the first siting hurdle at the California Energy Commission.

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S.F. Bay Underwater Transmission Line Before CAISO

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