SCE: Lack of transmission, lengthy approval process, inhibiting renewable integration

The lack of sufficient transmission infrastructure and the prolonged process for permitting and approval of new transmission lines continues to be the most significant impediment to reaching California’s renewable portfolio standard (RPS) goals, Southern California Edison (SCE) said in its 2012 RPS procurement plan filed recently with California state regulators.

In all, the utility said “six primary factors will challenge achievement of the [state’s] RPS goals.”

In addition to a lengthy transmission approval process, another factor that could jeopardize the ability of SCE and other retail sellers to reach the state’s RPS goals is the uncertainty surrounding the federal production and investment tax credits.

The number of proposed projects vying for permission to connect to the grid is also impeding progress toward reaching the state’s goal of obtaining 33% of its energy from renewable sources by 2020.

The utility cited a tariff filing by the California ISO, in which it estimated that it would take “as long as six to eight years from Oct. 1, 2010 to complete the studies for all small generators currently in the ISO’s queue.”

The utility also cited developer inexperience and performance issues, congestion at the transmission and generation levels that is increasing and making curtailment events “more and more common,” and regulatory inflexibility.

“The investor-owned utilities (IOUs) need the ability to make changes to their commercial documents to reflect changes in the renewable energy market,” the utility said. “The credit and financing markets can undergo significant changes in the time between the filing and approval of the RPS procurement plans that necessitate changes to the IOUs’ solicitation materials.”

While only a redacted copy of the plan was made public to protect confidential, market sensitive information, the plan said SCE does not have a short-term renewable procurement need. In fact, the utility appears to have a surplus.

“Whether and to what extent SCE’s anticipated net long positions may be carried forward to cover future net short positions will depend on the RPS compliance rules adopted by the [California Public Utilities] Commission, which are still being implemented,” the utility said.

However, SCE has determined that it does have a long-term renewable procurement need.

“Generally, SCE’s planned procurement activities for 2012 will include seeking resources to augment those already under contract to fulfill its need in the latter half of the decade,” the utility said.

While anticipated procurement figures were among those redacted from the 2012 RPS procurement plan, in 2011 the utility procured 21.1% of its retail sales from RPS-eligible resources.

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