Transmission Lines for Renewables Get CPUC Preapproval

In an attempt to hook up wind and other renewable energy to the state's grid, the California Public Utilities Commission will preapprove putting the cost of transmission into rates to ensure financing of new and upgraded high-voltage lines. The unanimous vote June 15 intends to break a logjam in building lines to access renewables projects. "It's a chicken-and-egg situation over who is going to pay," said commissioner Dian Grueneich. She explained that the traditional method of paying for transmission lines does not fit renewables projects. The old way - where a developer pays for the local transmission line - was set up for big developers with big central-station power plants. Smaller renewables developers do not have the same ability to finance, and there may be dozens of projects using one new transmission line. Several years ago, the commission demanded that Southern California Edison build a transmission line itself. Edison took the commission to court and got the action overturned. After that, Edison appealed to the Federal Energy Regulatory Commission to make a new rule to have all ratepayers pay for certain sections of transmission line to make way for renewable power. The utility specifically asked federal regulators to approve its precedent-setting plans for lines to the Tehachapi wind area (Circuit, July 8, 2005). FERC, however, turned down the primary part of Edison's plan. A review of law led the CPUC to attempt a different tack. "We can go beyond FERC rules," explained Grueneich. The decision sets in advance what kind of transmission project will be approved for rates (Circuit, May 5, 2006). In that way, utilities can be assured of cost recovery ahead of time, according to Grueneich. The commission is anxious to facilitate new renewables deliveries. "We can't unlock those resources without this kind of action," said CPUC president Mike Peevey. Also this week, the California Independent System Operator said it may ask federal regulators to consider not only reliability and economics when assessing transmission rate recovery but also access to new green power supplies. In other CPUC news, the commission agreed to allow Pacific Gas & Electric to finish constructing the 530 MW Contra Costa unit 8. "There's a significant benefit to California ratepayers," said Peevey. The power plant is partially built. The unit was sold to PG&E by Mirant as part of its bankruptcy reorganization. "Today's decision allows the utility to proceed with the construction of a state-of-the-art generation facility that will provide low-cost power to customers," Roy Kuga, PG&E's vice-president of energy supply, stated. The plant could be on line as soon as 2008, Peevey said. Ratepayers are amortizing its cost over 30 years.

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Transmission Lines for Renewables Get CPUC Preapproval

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