Transmission

Public Advocates Office (the Office) represents ratepayers in transmission proceedings to determine if an electrical corporation satisfies the requirement for Permit to Construct (PTC) and Certificate of Public Convenience and Necessity (CPCN) applications and that the utility makes a “showing that the present or future public convenience and necessity requires or will require such construction.”

For PTC applications, the Office focuses its review on transmission projects to ensure the project is environmentally sound and that project costs are reasonable. In CPCN applications for major transmission lines, the Office focuses on issues relating to the determination of “need” for a proposed project, including cost-effectiveness, long-term planning, reliability requirements, and compliance with state policy and related California Public Utilities Commission (CPUC) directives. 

 


Statewide Transmission Issues

California Independent System Operator (CAISO) Transmission Planning Process

The California Independent System Operator (CAISO) Transmission Planning Process (TPP) is an annual process that takes two years. In conducting the TPP, the CAISO works with participating transmission owners, neighboring balancing authorities, sub-regional planning entities, and other stakeholders. In TPP, the CAISO considers local, sub-regional, and regional transmission situations, load growth, generation development and plant retirements. The TPP consists of the following three steps:


  1. Development of CAISO unified planning assumptions and study plan, 
  2. Technical studies and the CAISO Board Approval of transmission solutions,  
  3. Contract awards to develop the identified transmission solutions.  

 

The Public Advocates Office participates in CAISO’s TPP.

 

After a project is approved by the CAISO’s TPP, the utility may file the project as an application at the CPUC, requesting to recover transmission projects costs from ratepayers. For Example, for the CAISO 2017-2018 TPP, the Office Recommended Consistency Between Local Capacity Technical Criteria and Transmission Planning Standards, which the CAISO is considering in the 2018-2019 TPP.


Pacific Gas and Electric Company (PG&E) Transmission Projects

South of Palermo 115 kV Power Line Reinforcement Project (A.16-04-023)

On April 28, 2016, PG&E filed Application 16-04-023 at CPUC. In this application, PG&E proposed to re-conductor approximately 59.5 miles of 115 kilovolt (kV) transmission lines for the Palermo—Rio Oso transmission system. This project would cost ratepayers more than $109 million.


On June 1, 2016, the Office filed a protest to this application and identified the discrepancies of PG&E’s application with CAISO’s study results, including the length of transmission lines that need to be re-conductored, and the per unit cost for the re-conductoring.

The Commission issued Decision 18-05-014 on May 5, 2018, granting PG&E its request.

Estrella Substation and Paso Robles Area Reinforcement Project (A.17-01-023)

On January 25, 2017, PG&E and NextEra Energy Transmission (NEET) West filed joint Application 17-01-023 with the CPUC. Under this application, NEET West proposed to construct a 230 kilovolt (kV) transmission line as part of the Estrella Substation, including the 230 kV switchyard, and the 230/70 kV transformers. Under the same application, PG&E proposed to construct the 70 kV component of the Estrella Switchyard and approximately 10 miles of 70 kV transmission lines.

Based on CAISO’s estimate, the project cost will not be more than $45 million. However, based on the applicant’s cost estimate, the project cost will be more than $100 million.

On March 6, 2017, the Office filed a protest to this joint application. The Office identified issues such as the need for the project, project alternatives, and lack of project coordination agreement between PG&E and NEET West.

The Commission issued Decision 18-07-038 on July 26, 2018, extending the statutory deadline for the proceeding to August 31, 2020 to allow the Commission's Energy Division time to complete the environmental impact report (EIR) for the project. Stakeholders and parties will have an opportunity to comment on the draft EIR after it's completed.


Southern California Edison Company (SCE) Transmission Projects

Valley—Ivyglen Transmission Line Project and Alberhill System Project (A.07-01-031 and A.09-09-022)

On January 16, 2007, SCE filed Application (A.) 07-01-031 for a Permit to Construct (PTC) the Valley-Ivyglen (VIG) project. The proposed VIG project consists of the construction of 27 miles of transmission lines. SCE estimates the project cost to be $174 million.

On September 30, 2009, SCE filed A. 09-09-022 to construct the Alberhill System Project (ASP). ASP consists of the Alberhill 500 kV Substation, 3.3 miles of double-circuit 500 kV transmission lines to loop in the Alberhill Substation to the Valley-Serrano 500 kV transmission line, and 25 miles of 115-kV transmission lines. SCE estimates the cost for the ASP would be approximately $464 million.

Total estimated cost of the above two projects is $638 million.

 
On November 5, 2009, the Public Advocates Office filed a protest to A.09-09-022. In its protest, the Office advocated that ASP should be filed as a Certificate of Public Convenience and Necessity (CPCN) instead of as a Permit to Construct (PTC) application to enable the Commission to evaluate the need and cost of the project.

 

In April 2017, the CPUC issued the Draft Environmental Impact Report (DEIR). On July 20, 2016, the Office filed comments to the Draft Environmental Impact Report (DEIR). In the DEIR comments, the Office proposed to consider the two projects together and proposed five alternatives for the Commission’s consideration.

On June 8, 2017, the Office lobbied the CPUC Commissioners and proposed to consolidate the following four projects into one: Valley—Ivyglen Project, Alberhill System Project, Riverside Reliability Transmission Project, and Circle City Project, in order to save ratepayer money while improving power supply reliability at the same time. The Office proposed three options to consolidate these four projects .

 

On August 28, 2017, the Office filed testimony advocating for the consolidation of the VIG project and the ASP project into one project and provided three options for the Commission to consider. Based on the Office’s cost estimate, the consolidated project cost would cost less than $250 million, saving ratepayers over $400 million.

 

The Office participated in evidentiary hearings held by the Commission on October 17 and 18, 2017 for this proceeding. The Office filed opening brief on November 30, 2017 and reply brief on January 4, 2018. In addition, the Office filed reply comments on the Administrative Law Judge (ALJ) proposed decision on April 30, 2018, supporting the ALJ's proposal to approve the Ivyglen project and to deny the Alberhill project. The Office also filed reply comments to the Commission's alternate proposed decision (APD) on July 24, 2018, supporting the Commission's proposal to approve the Ivyglen project, but opposed the APD's proposal to deny the Alberhill project without prejudice. The Commission issued a final decision (D.18-08-026) on this proceeding on August 31, 2018, approving the Ivyglen project and denying the Alberhill project, without prejudice. This decision allows SCE to file an application for the Alberhill project in the future if it elects to do so.    

Riverside Transmission Reliability Project (A.15-04-013)

On April 15, 2015, SCE filed A.15-04-013 at the CPUC. In its application, SCE proposed to construct a 220 kilovolt (kV) substation and approximately 10 miles of double-circuit 220 kV transmission lines. SCE’s cost estimate for the project is $235 million, however, based on CAISO’s recommendation in 2006, the project cost estimate was $52.5 million.

On May 22, 2015, the Office filed a protest to the application and noted that the project may not be needed and that the cost estimation may not be just and reasonable.

On June 8, 2017, the Office lobbied the CPUC Commissioners and proposed to consolidate the following four projects into one: Valley—Ivyglen Project, Alberhill System Project, Riverside Reliability Transmission Project, and Circle City Project, in order to save ratepayer money while improve power supply reliability. The Office proposed three options to consolidate these four projects.

On August 15, 2017, CPUC issued a ruling, directing SCE, Riverside Public Utilities, and CAISO to prepare a joint report to identify the lower voltage designs or interim remedies to the proposed project, in order to address any reliability concerns. SCE's filed its proposed low voltage designs for this project on August 15, 2017.

 

The Commission's Energy Division issued its Draft Subsequent Environmental Impact Report (DSEIR) for this project on April 2, 2018. The Office filed comments on the DSEIR on May 17, 2018 and recommended that the Riverside project and SCE's proposed Circle City substation project (A.15-12-007) be consolidated. The Office proposal would meet the project objectives of SCE's proposed Riverside and Circle City substation projects and would result in less cost and less environmental impact by eliminating the construction of  two substations.

 

The Public Advocates Office is awaiting further Commission action on this proceeding.

Circle City Substation and Mira—Jefferson Transmission Line Project (A.15-12-007)

On December 4, 2015, SCE filed A.15-12-007 at CPUC. In its application, SCE proposed to construct Circle City 66 kilovolt (kV) Substation, and approximately 21 miles of 66 kV transmission lines.

On January 6, 2016, the Office filed a protest to the application and noted that the project may not be needed and that the project be consolidated with the Riverside Transmission Reliability Project.

On June 8, 2017, the Office lobbied the CPUC Commissioners and proposed to consolidate the following four projects into one: Valley—Ivyglen Project, Alberhill System Project, Riverside Reliability Transmission Project, and Circle City Project, in order to save ratepayer money while improve power supply reliability. The Office proposed three options to consolidate these four projects.

The Commission's Energy division issued a Draft Environmental Impact Report (DEIR) for this project in May 2018 and recommended a lower voltage and less costly design alternative to the SCE's proposed project. The Office concurred with the DEIR recommendation. The final EIR is anticipated to be issued in November 2018.

 

Eldorado-Lugo-Mohave (ELM) Series Capacitor Project (A. 18-05-007)

On May 2, 2018, SCE filed Application (A. 18-05-007) with the CPUC for a Permit to Construct (PTC) authorizing construction of its proposed 500 kilovolt (kV) Eldorado-Lugo-Mohave (ELM) Series Capacitor Project to integrate renewable generation and relieve area deliverability constraints. SCE proposes to construct the new 500 kV series capacitors at the middle of the Eldorado-Lugo 500kV line and at the middle of the Lugo-Mohave 500kV line. In addition, SCE proposes to install 235 miles of optical ground wire (OPGW). SCE's ELM project would take place between the existing Eldorado, Lugo, and Mohave substations located south of Las Vegas, in Hesperia, and in Laughlin, respectively.

 

SCE's cost estimate for the project is approximately $225 million.

 

On June 1, 2018, the Public Advocates Office filed a protest to the ELM application. The Public Advocates Office advocated for the rejection of SCE's ELM application and recommended that SCE resubmit its ELM application as a Certificate of Public Convenience and Necessity (CPCN).

 

On July 5, 2018, the Public Advocates Office filed a response to SCE's reply to the Public Advocates Office's protest of SCE's ELM application.

 

On August 24, 2018, the Public Advocates Office participated in the Pre-Hearing Conference for A. 18-05-007, SCE's ELM application.

 

The Public Advocates Office filed its opening brief on SCE's ELM application on October 12, 2018 and reply brief on October 26, 2018 and is awaiting further Commission action on this matter.


San Diego Gas and Electric Company (SDG&E) Transmission Project

TL (Tie Line) 695 and TL 6971 Re-conductor Project (A. 16-04-022)

On April 25, 2016, SDG&E filed A.16-04-022 with the CPUC. This Permit to Construct (PTC) application is to construct TL 695 and TL 6971 Re-conductor Project. SDG&E proposing replace existing conductor, remove existing wood pole structures, and install new steel pole structures along an approximately 10-mile long, 69 kilovolt (kV) power line in northern San Diego County and southern Orange County.

On May 31, 2016, the Office filed protest to the application.

 

The Commission issued a decision (D.18-03-019) for the proceeding on March 22, 2018 approving SDG&E proposed project.

 

 

NextEra Energy Transmission (NEET) West Transmission Project

Suncrest Dynamic Reactive Power Compensation Project (A. 15-08-027)

On August 31, 2015, NEET West filed A.15-08-027 with the CPUC for a Certificate of Public Convenience and Necessity (CPCN) to construct a 300 Megavolt Ampere Reactive (MVAR) Static Var Compensator (SVC) at SDG&E’s Suncrest Substation in order to provide voltage support for the delivery of renewable generation from the Imperial Valley area. NEET West proposed to construct the 300 MVAR SVC approximately one mile away from the Suncrest Substation, and a one-mile long underground cable to interconnect the SVC to the 230 kV bus in the Suncrest Substation.

NEET West’s cost estimation for the project cost is approximately $50 million.

On October 5, 2015, the Office filed a response to the application. The Office advocated for the construction of the SVC equipment within SDG&E’s Suncrest Substation footprint, which is estimated to save ratepayers at least $5 million.

On February 8, 2016, the Office filed comments to CPUC’s Notice of Preparation of an Environmental Impact Report. On January 10, 2017, the Office filed comments on the Draft Environmental Impact Report. On May 16, 2017, the Office filed prepared testimony. On July 18, 2017, the Office filed rebuttal testimony.

On August 29-30, 2017, the Office participated in the evidentiary hearings. The Office also participated in the additional evidentiary hearings held November 17, 2017.

 

The Office filed opening brief on this proceeding on March 5, 2018 and reply brief on April 4, 2018 and reemphasized the need to contruct the SVC equipment within SDG&E's Suncrest Substation footprint to save at lease $5 million of ratepayers' funds.

 

The Commission issued a decision (D.18-08-028) on this proceeding on August 23, 2018 and extended the statutory deadline in this proceeding to November 26, 2018.

 

The Office participated in the oral arguments held by Commission on this proceeding on September 18, 2018 and is awaiting the Commission's final decision on this proceeding.

 

The Delaney Colorado River Transmission LLC (DCRT) Transmission Project

Ten West Link Project (A. 16-10-012)

Background

The Delaney Colorado River Transmission LLC (DCRT) Ten West Link Project filed this application with the California Public Utilities Commission (CPUC) to build a 500 kiloVolt (kV) transmission line approximately 114 miles long. Of the 114 miles, approximately 17 miles would be in California and the remainder in Arizona. The California Independent System Operator (CAISO) approved the Ten West Link Project in its 2015 transmission planning and solicitation process, primarily as an economic project.

DCRT estimates the Ten West Link Project will cost approximately $280 million and would be completed within 38 months. DCRT proposes the cost of the project would be paid by California ratepayers.

The Public Advocates Office is currently evaluating DERT's application and filed a protest to the application on November 28, 2016. The Public Advocates Office is actively participating in the proceeding and is analyzing the need, cost, and potential alternatives to the Ten West Link Project.


DCRT filed the application for the Ten West Link Project with the CPUC in October 2016. The Bureau of Land Management (BLM) is the lead environmental agency for the project and released its Draft Environmental Impact Statement (DEIS) for the project on August 31, 2018. Comments on the DEIS are due November 27, 2018.

DCRT held three public meetings on the project in Phoenix, Arizona; Quartzsite, Arizona; and in Blythe, California in October 2018. Further Commission action is pending on this proceeding.

Click here to view the current scoping ruling and schedule.

 

Other Resources

Click here to view the CPUC's docket information for A.16-10-012.

Click here to view the CPUC CEQA review project overview page.

Click here to view the Bureau of Land Management (BLM) project environmental review website.
 

New Rule 21 Tariff Rulemaking

On July 21, 2017, the California Public Utilities Commission (CPUC) issued a Rulemaking (R.17-07-007) to streamline interconnection of distributed energy resources (DERs) and to make improvements to Rule 21 tariff. Rule 21 tariff sets the rules on how DERs are interconnected onto the distribution system, what system upgrades are needed, and who pays for the upgrades. Rule 21 tariff also sets the rules on how new smart inverter functionalities will be required for interconnecting DERs. Potential revisions include, but are not limited to, the following topics:

  • Incorporating the results of the Integration Capacity Analysis (ICA), a method that helps to determine the optimal location for DERs on the grid, under development in Rulemaking (R.14-08-013);
  • Resolving issues related to interconnection of storage (particularly exporting storage);
  • Further development of "smart" inverters - smart inverters are devices which enable these 'direct current' resources to connect to the 'alternating current' grid;
  • Transmission cluster study thresholds; and
  • Timelines and cost allocations for grid upgrades.

The proceeding includes 8 working groups to discuss the above issues. As penetration of DERs continues to rise alongside the goal of interconnecting more resources, the Commission identified a need for these issues to be resolved to keep up with the rapidly changing grid.

On August 2, 2017 and August 25, 2017, the Public Advocates Office filed comments and reply comments, respectively in support of the scope of the Rulemaking to have four tracks and 22 issues, however, the Public Advocates Office recommended that the Rulemaking be split into two proceedings: one for matters related to rate-setting and one for quasi-legislative matters.

On October 2, 2017, the CPUC issued a scoping memo outlining a schedule and the topics that the working groups will discuss in detail. Three phases were identified: Phase 1 will address the majority of the urgent and major issues above; Phase 2 will be categorized as rate-setting and will address cost allocation issues; and Phase 3 will address any revisions to Rule 21 for small and multi-jurisdictional utilities. The CPUC is scheduled to make, adopt, modify or deny the working groups' proposals in June of 2019.

On September 7, 2018, the Public Advocates Office submitted comments advocating for and modifying a proposal allowing interconnecting DER generators to submit a generation profile that would keep DER production below the available capacity of the distribution system to accommodate the additional DER, as determined by the ICA tool. Keeping production below the distribution system's maximum threshold would allow DER developers and investor owned utilities (IOUs) to avoid expensive upgrades to the distribution system, which would result in savings to ratepayers.

On September 28, 2018, the Public Advocates Office submitted comments advocating for the increased use of ICA in the Rule 21 process. Specifically, the comments supported sub-proposals that allow DER projects to use ICA to bypass Rule 21 screens and to facilitate the DER interconnection process more efficiently.

The Public Advocates Office is also participating in workshop activities to incorporate smart inverter standards and functionalities into Rule 21. On August 14, 2018, the Office of Ratepayer Advocates filed a protest to the IOUs' proposed methodology for monitoring grid frequency variations that may be prompted by installation of smart inverter technologies. The Public Advocates Office protest has led the IOUs to implement a more precise monitoring methodology for tracking the grid-wide frequency events which prompt smart inverters to assist in maintaining a stable grid frequency range.

 

Congestion Revenue Rights

Congestion Revenue Rights (CRRs) are financial instruments intended to hedge against price fluctuations from transmission congestion prices in the CAISO (California Independent System Operator) wholesale market.  They are valued as locational marginal prices (LMPs) that vary throughout the day to reflect the cost of serving load at that particular location on the CAISO transmission system.  In this wholesale CRR auction market, participants buy CRRs in the Day-Ahead Market (DAM) and are paid congestion revenues when the market runs later in the real-time market.  Under this market system, prices for CRRs are expected to reflect the expected cost of serving load in the area they represent.

 

However, since the CAISO began running their CRR market in 2009, prices in the DAM have been much higher than auction revenues.  As of April 2018, there is approximately a $780 million revenue shortfall between the DAM and real time prices.  Whenever there is a shortfall, revenues from Transmission Access Charge (TAC), which are paid by TAC ratepayers, are used to fund the shortfall to meet financial obligations to the CRR auction participants.  Consequently, the CAISO opened a stakeholder process in April 2017 to investigate the reasons and potential solutions for this revenue disparity.  Due to the financial impact to ratepayers, the Public Advocates Office participates in the CAISO’s stakeholder process.

 

The CAISO published their CRR Auction Analysis Report in November 2017, which became the working document to solicit stakeholder feedback on the CRR market process moving forward.   Based on the CAISO’s analysis and stakeholder input of the CRR market, the CAISO released its first round of recommendations named Track 1A in February 2018.  In April 2018, the CAISO released their second round of recommendations named Track 1B.  Both Track 1A and Track 1B are intended to identify the reasons for and to address the revenue shortfalls in the CRR auction market.  For example, one recommendation from Track 1A is to move outage reporting to July (before the CRR auction market runs) from October.  This change would allow the CAISO to run the market with more accurate information, thereby reducing the risk for overselling CRRs which contributes to the revenue shortfall.  In Track 1B, the CAISO proposed to limit payments to CRR auction participants only from revenues generated in the auction.  This Track 1B recommendation means that no matter what price the participants procured CRRs at in the DAM, they would only receive the revenues generated on that day, in effect protecting ratepayers from paying for shortfalls in the market.  This proposed change is intended to discourage participants who may participate in the CRR auction only to receive large revenue payouts.  The CAISO filed a revised tariff with Federal Energy Regulatory Commission (FERC) in order to address the revenue shortfall so that ratepayers would not have to pay into the TAC to eliminate the shortfall.   The FERC approved Track 1A changes in June 2018 and approved Track 1B on November 9, 2018.  

 

The Public Advocates Office Participation in CRR Stakeholder Process

On April 17, 2017, the CAISO opened a stakeholder initiative, soliciting feedback on how they should proceed with investigating the CRR auction insufficiencies.  The Public Advocates Office filed comments at the CAISO on May 3, 2017 and recommended that the CAISO investigate the sources of the CRR auction inefficiencies and revenue shortfall from 2009 to the present, and the potential benefits the CRR auction offers relative to the shortfall. The Public Advocates Office comments can be found here.

 

In November 2017, the CAISO released their CRR Auction Analysis Report and solicited stakeholder feedback on the CRR Auction Analysis Report during their December 19 stakeholder meeting.  The Public Advocates Office filed comments with the CAISO on December 6, 2017 and recommended that the CAISO move quickly to enact policy changes that would reduce the shortfall in a CRR system because of the demonstrated financial harm to TAC ratepayers.  The Public Advocates Office comments can be found here.  The Public Advocates Office also filed comments on the stakeholder meeting itself, which can be found here.

 

On February 2018 the CAISO released their “Track 1” recommended solutions to address the CRR market revenue insufficiencies.  The Public Advocates Office filed comments on February 28, 2018 and primarily recommended that the CAISO alter the CRR market to a platform with willing buyers and sellers of CRRs to improve the efficiency of the CRR auction and to reduce or eliminate the CRR revenue deficiencies.  The Public Advocates Office comments can be found here.

  

In April 2018, the CAISO released their Track 1B recommended solutions for CRR auction revenue shortfalls which included limiting CRR payments only to revenues generated from the auction.  The Public Advocates Office filed comments on May 4, 2018 and supported the CAISO’s proposal.  The Public Advocates Office comments can be found here.  The FERC approved this change on November 9, 2018.  The FERC’s order approving the Track 1A changes is found here, and the FERC’s order approving the Track 1B change is found here.  

CAISO's Storage as a Transmission Asset (SATA) Initiative

The California Independent System Operator (CAISO) commenced the Storage as a Transmission Asset (SATA) initiative stakeholder process with its Issue Paper in March 2018. This initiative is in response to the January 2017 Federal Energy Regulatory Commission (FERC) Policy Statement clarifying that, as a federal policy, it is permissible for electric storage resources to concurrently recover their costs through transmission and market rates, while also outlining possible approaches for avoiding double recovery for the same product. Storage is a unique resource in that it can both consume from, and provide energy to, the grid; sometimes at the same time. Because of this, storage can serve multiple uses; traditional grid resources cannot serve multiple uses. However, there is no framework in California for storage resources to serve both market and transmission services and receive the corresponding rates, despite it being permissible by federal policy. Through this initiative, the CAISO aims to develop storage tariffs that would allow energy storage facilities under its jurisdiction, such as batteries, pumped hydroelectric, and flywheels, and to serve and receive revenue for multiple uses such as transmission and energy services because it can lower costs and provide greater flexibility for the benefit of ratepayers. Currently, energy storage facilities are not able to provide services and receive revenue for market services as well as provide services and recover costs for transmission services. The storage facility can either serve market or transmission services, but not both.   

The Public Advocates Office provided comments on the CAISO’s proposal and supports a cost recovery mechanism that would enable energy storage facilities providing transmission and energy services to recover their costs through the transmission access charge (TAC) and energy storage market revenues.  Additionally, the Public Advocates Office recommends that SATA agreements be set for the SATA’s useful life, include provisions requiring a SATA to have sufficient excess capacity, and ensure that SATAs do not receive double compensation for providing a service. Furthermore, the Public Advocates Office advocates for cost caps for SATA, an improved market notification timeframe for energy services for SATA, consideration of economic projects for SATA, and a SATA outcome report to be released by the CAISO every three years.


See the Public Advocates Office’s Comments to the CAISO’s proposals: