CAISO Backs Expensive, Renewable-Enabling Projects

20 May 2011

Despite concerns over cost and barring non-utility transmission builders, the new California Independent System Operator board consented to $1.2 billion in transmission projects May 18. The approved transmission plan is the first to tie together the grid operator’s traditional reliability responsibility with its efforts to implement the state’s higher renewable energy mandate.

Environmentalists supported the transmission projects. Independent generators opposed CAISO’s decision.

The California Public Utilities Commission is conflicted. It’s trying to ensure new renewable resources are developed while keeping a lid on costs, according to staff.

“You are approving an extremely biased outcome that will cost consumers,” Gary Ackerman, Western Independent Transmission Group executive director, told the CAISO board. The transmission projects--and pointedly the Path 42 upgrade--edge out non-utility builders, according to Ackerman.

In the 32 transmission projects approved by the grid operator, environmentalists, as well as the Imperial Irrigation District, singled out one upgrade--replacing parts of Path 42 in Southern California Edison territory at $40 million. That line is expected to bring in energy from large desert solar projects.

You have “environmentalists arguing for another transmission line,” said Carl Zichella, Natural Resources Defense Council director of Western energy transmission, noting the irony.

While Edison representatives did not mention the utility’s transmission building plan at this board meeting, executives earlier this month told the financial community that the utility’s future plans are to focus investments on transmission projects (Current, May 13, 2011).

The CPUC is stuck in between. It’s to lay the ground rules for the state’s 33 percent renewables portfolio standard, but do it in a way “that’s the least-cost for consumers,” said Nancy Ryan, CPUC deputy executive director of policy and external relations. The CPUC supported the plan but raised concerns about its cost.

In an update on grid reliability for the summer, Bob Emmert, CAISO lead interconnection service engineer, said that in all probability power reserves are expected to be above the required 15 percent reserve cushion. “The economy would have to be doing a lot better than Moody’s [ratings service] projects to have an impact on reserve margins,” he said. If the economy surges power consumption is expected to rise, he added.

Alternatively, “If the economy goes into a double dip recession, it’s much better for reserve margins.”

Three new board members joined incumbent board chair Bob Foster, casting a unanimous vote. Ashutosh Bhagwat, Angelina Galiteva, and Richard Maullin, who await legislative confirmation, supported the plan.

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