Nevada Hydro unfazed by CPUC vote, plans to reapply – project manager

Nevada Hydro expects to submit a reapplication for the Talega-Escondido/Valley-Serrano (TE/VS) transmission project in southern California in “weeks,” project manager David Kates told TransmissionHub on May 30. 

The California Public Utilities Commission’s (CPUC) five commissioners on May 24 voted unanimously to dismiss Nevada Hydro’s application for a CPCN for the TE/VS transmission project, and provided conditions the company must meet in order to refile. 

The company is working to meet those conditions, which indirectly include holding a workshop and securing a location to site one of its substations. Once a location is found, the company will be able to reapply for a project permit, Kates said. A new permitting process will then ensue.

“They very clearly laid out their requirements for us, and it seems to me that if we meet those, they’re going to have a very difficult time, first, not accepting the application and second, not approving the permit,” Kates said. “It’s really a matter of delay and dollars, and for a private company those are two very critical issues. We’re not a rate base-funded utility.”

Kates said he was confident in the ability to demonstrate the need for the project, especially given the San Onofre nuclear plant outage in southern California.

“If San Onofre is down for an extended period of time, we’ll be able to essentially substitute for one unit there,” Kates said. “We are part of the tools that the PUC and the governor has to save southern California from blackouts.”

Two of the conditions set forth by the CPUC required transparency regarding Nevada Hydro’s financial support and the submission of an “accurate and stable project description and location.” The former presents a bit of a Catch-22, as securing financing is directly tied to a supportive regulatory framework, the project manager said.

“The state of California is making it very difficult for investors to have any comfort that they should put any money into infrastructure in California,” Kates said. “We have been talking to a handful of major investors who are poised to invest not just here in California but in other states, as FERC Order 1000 comes into play,” and are weighing the costs and benefits of investing there as opposed to other areas, Kates said. “Even though California likes to think it’s in the forefront of infrastructure and green energy, from investors’ perspectives, I don’t believe they see it that way.” 

The second condition is one that Nevada Hydro had met before delays brought about by budget problems in California and other issues internal to the CPUC, Kates said.

“As a result of delays in the proceedings, the locations for one of our substations was taken away because the owners didn’t want to wait for us,” Kates said. “We’re in the process of securing another site in that area. As soon as that happens, we’ll be refiling,” he said, adding that doing so could happen in a matter of weeks.

The California ISO does not need to give the project its blessing for it to move forward, Kates said. “We are working to get a process going with them. We do not believe we need their approval to apply to the PUC, nor do we believe that we need their approval for the PUC to be able to act on the project.” 

He pointed to the fact that there have been a “number” of utility projects that have gone forward without Cal-ISO approval.

According to the CPUC, to be complete, the application must:

*   ensure that the financial viability of the project is clear and that any financial partner’s participation is transparent, as well as the financial viability of the project and proponent’s ability to support the project;

*   include complete testimony from expert witnesses. Because the application must be complete, parties must be able to rely on the proffered experts and their testimony;

*   provide an accurate and stable project description and location and the Energy Division must not accept the PEA as complete without such a description;

*   explain how the Cal-ISO is currently considering the project and include a full discussion of how revenue requirements will be calculated and recovered through the transmission access charge, as well as the impact on California ratepayers;

*   comply fully with the requirements of the public utility code, the rules of practice and procedure, must fully demonstrate the proposed project’s need, and must comply with the detailed requirements to provide a cost control plan, implementation plan, and project management plan. 

The TE/VS 500-kV transmission line would have a nominal design capacity of 1,000 MW and provide a transmission interconnection from the proposed Lake Elsinore Advanced Pumped Storage (LEAPS) hydroelectric energy storage facility to the transmission systems of Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E). 

SCE is a subsidiary of Edison International (NYSE:EIX). 

SDG&E is a subsidiary of Sempra Energy (NYSE:SRE) 

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.