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Getting transmission ready for renewables -- Rule changes needed to fit renewables policy demands

With a significant portion of California's future wind resources expected to be built in the transmission constrained Tehachapi Wind Resource Area in the southern part of the state, the California Public Utilities Commission (CPUC) is leaning towards taking the unusual step this month of requiring utilities and developers to plan transmission upgrades ahead of time. In addition, the CPUC will require Southern California Edison (SCE), which owns transmission lines into Tehachapi, to apply for permits for the first upgrades within six months of collaboratively developing the plan.

SCE wants the CPUC to step back and take a bird's eye view of what it is proposing. As the state's leading purchaser of renewable energy, SCE says such major forward planning of transmission requires changes to both state and federal rules so that utilities have some assurance they can recover the costs of upgrades, not only for generation with current interconnection agreements, but also for anticipated future generation.

The debate originated with a law in 2002 which set renewable energy goals for the state's three largest electric utilities at 20% of electricity sales by 2017. Governor Arnold Schwarzeneger's Energy Action Plan has since advanced the goal to 2010. Although the renewable energy standard is still in state rulemaking (Windpower Monthly, April 2004), the proposed CPUC ruling would require SCE to plan for the considerable impact of the mandate at Tehachapi, where there is currently 645 MW of installed wind capacity.

According to a development report by the California Energy Commission, the 20% renewables standard will result in an anticipated 4060 MW of new wind in the Tehachapi area alone, enough to meet 40% of the standard statewide. But the CPUC says existing transmission constraints and current methods of designing for transmission upgrades will slow both that build-up and the ability of utilities to comply with the standard

"We find that business-as-usual transmission planning approaches, which would plan and size Tehachapi transmission upgrades based solely on transmission needs of generation projects that have submitted interconnection requests, is unlikely to achieve the most cost effective size, configuration, or timing of Tehachapi upgrades," says CPUC administrative law judge Charlotte TerKeurst in her interim decision. She fears renewables will suffer.

There are two opposing approaches to planning transmission, says Scott Hempling, an attorney representing the California Wind Energy Association. The first is to select winning bidders from solicitations for more power and plan for those individual needs. That would result in upgrading lines in small increments. The other is to project what transmission will be needed long term and begin planning and building for that much larger requirement.

"There is nothing odd about planning and building infrastructure prior to commitments," Hempling says. He cites the way infrastructure is added in communities, based upon expectations of where people will live and businesses will grow. But state and federal rules discourage that type of advanced development for transmission wires, says SCE's Patricia Arons.

Thinking it through

She says that what renewables advocates have called SCE's opposition to the larger planning process has really been the utility's attempt to get the CPUC to think about all the issues. At the top of the list is how a utility recovers its cost for transmission upgrades.

Under current rules the utility must follow federal protocols, including building only for identified generation projects, or "someone can end up holding the bag," she adds. On the state side, Arons says the CPUC has some demanding licensing procedures and is showing few signs of loosening them. The result in both cases is that getting recovery of costs for a "conceptual transmission plan" is very difficult.

While SCE supports a phased-in transmission development that aggregates wind project needs ahead of time, it seeks clarity from the CPUC on how it can recover the costs of that development. "We want to make sure that risks are properly mitigated and that these facilities get built," Arons says.

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