SCE filing hints at increased uncertainty over meeting TRTP deadline

Southern California Edison (SCE) took an arguably diplomatic posture in its reply to intervenors in the matter of whether it should be allowed to spend up to $33m on underground preconstruction activities for Segment 8A of the Tehachapi Renewable Transmission Project (TRTP) through the city of Chino Hills, Calif. (Docket No. 07-06-031).

The reply, filed with California state regulators on Jan. 24 and provided to interested parties on Feb. 19, acknowledged as valid the concerns raised by the city of Chino Hills as well as those of the state’s Division of Ratepayer Advocates (DRA) regarding the requested authorization for SCE to spend funds on preconstruction activities before the California Public Utilities Commission (CPUC) rules on the city of Chino Hills’ request that it modify its original decision that the project be sited above ground.

“In their respective responses, Chino Hills identifies several rationales for commission action, while DRA correctly focuses on the important issue of whether it is at all possible to achieve the commission’s desired schedule,” even if SCE is allowed to undertake preconstruction activities prior to a CPUC decision, SCE wrote in its response.

SCE also acknowledged the validity of the DRA’s concern about whether it would be in the public interest to allow the utility to incur costs that would be imposed on ratepayers, especially if the line is not ultimately ordered to be placed underground.

“If the commission ultimately overturns its previous approval and orders underground construction, then proceeding with the activities described in SCE’s contracting report are critical to SCE’s attempt to meet the commission’s preferred schedule for TRTP’s completion,” SCE said in its reply, while acknowledging that, “If the commission ultimately decides that the record does not support overturning its prior decision, then ratepayers will pay for costs that could have been avoided.”

SCE stopped short of stating that authorizing preconstruction expenses and activities prior to a commission decision would keep the project on track for completion by its target date. Instead, the utility used language that more strongly hinted at the uncertainty of keeping the project on schedule, even if it is given the OK to move ahead with preconstruction activities.

In its Nov. 9, 2012, response to a motion filed with the CPUC, the utility warned that even under the most favorable circumstances, there was “significant risk” the project would not meet the project’s planned 2015 in-service date.

In its Jan. 17 contracting report, SCE said authorization to undertake preconstruction activities was necessary to keeping the project on schedule.

“If the commission desires to maintain the current best-case schedule pending its consideration of whether to underground, the early commencement of [preconstruction activities] is needed,” SCE said at the time.

However, language in the utility’s most recent filing suggests that it believes chances of keeping the project on schedule are growing increasingly remote. 

“SCE … believe[s] that continuing with the activities identified in the contracting report is the critical component to having any chance [emphasis added] of achieving that schedule objective,” the utility wrote, while using other phrases elsewhere in the document including “attempt to meet the Commission’s preferred schedule,” that suggest uncertainty.

The utility added that it remains concerned about the many significant challenges to installing 500-kV underground facilities in the Chino Hills area “by late 2015/early 2016.”

Requests for additional comment from SCE were not answered by press time Feb. 20.

SCE also restated its opposition to modifying the original decision, and said it believes that overhead construction is the preferred alternative to achieve all of the commission’s policy objectives.

On Jan. 29, CPUC administrative law judge (ALJ) Jean Vieth issued a proposed decision that would allow the utility to seek recovery of costs associated with evaluating the underground placement of the project before the full commission decides whether to order undergrounding. The proposed decision can be placed on the commission’s agenda after 30 days from its issue date. If approved as drafted, the decision would become effective immediately upon approval by the full CPUC.

SCE began constructing a five-mile stretch of the 250-mile, 500-kV TRTP through the city of Chino Hills in May 2011, but residents objected after the first tubular steel poles were erected, claiming their visual and economic impact was far greater than previously envisioned.

The city filed an objection and, on Nov. 10, 2011, the CPUC ordered that SCE halt work on the Chino Hills stretch of the project, and provide the CPUC with information on alternate routes.

On Feb. 14, 2012, the two sides entered mediation under the CPUC’s alternative dispute resolution program in an effort to reach a mutually agreeable solution. Though several sessions were held during which proposals were presented and discussed by both sides, the parties “were not able to reach agreement on a resolution that met the needs of both parties,” the two sides said in a March 6, 2012 joint statement announcing that mediation had been suspended.

The parties returned to court on March 19, 2012, for a prehearing conference before a CPUC ALJ.

In May 2012, the CPUC said it had begun confidential negotiations in “an effort by the CPUC, SCE, and the city of Chino Hills to agree upon undergrounding the line beneath the existing right-of-way in the city,” according to the statement the CPUC issued at that time.

In July 2012, CPUC President Michael Peevey issued his assigned commissioner’s ruling (ACR), ordered SCE to conduct engineering studies and provide detailed estimates on the cost of undergrounding the portion of the line through Chino Hills. The motions, responses, replies and engineering report are in response to that ACR and a subsequent amendment issued Nov. 15, 2012.

Peevey anticipates that the commission will determine whether to require undergrounding of Segment 8A through the existing right of way in Chino Hills in July.

When completed, the 250-mile, $2.2bn, 500-kV project will be capable of moving up to 4,500 MW of renewable energy from the Tehachapi, Calif., area to population centers in Los Angeles and San Bernardino counties in California.

SCE has called the Tehachapi project “a critically important, high-voltage transmission line, the timely completion of which is essential for California’s progress toward its aggressive renewable energy goals.” California’s renewable portfolio standard calls for 33% renewable energy by 2020.

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