Update: Tehachapi transmission project to be placed underground — CPUC

By a vote of 3-2, California regulators on July 11 approved placing a 3.5-mile portion of the Tehachapi Renewable Transmission Project (TRTP) underground as it passes through the city of Chino Hills, Calif. (Docket No. A07-06-031).

In the culmination of years of wrangling, reams of legal filings, and months of testimony, evidentiary hearings, and ex parte meetings, members of the California Public Utilities Commission (CPUC) voted in favor of the alternate proposed decision written by CPUC President Michael Peevey, and rejected the proposed decision written by CPUC administrative law judge (ALJ) Jean Vieth, which had garnered the support of most of the intervening parties in the matter.

Following more than 30 minutes of impassioned comments from Chino Hills’ residents and supporters in a standing-room-only hearing room at CPUC headquarters in San Francisco, the commissioners shared their thoughts on the matter prior to taking the official roll call vote.

Peevey, who spoke first, said his decision was based on “my perception of what was right and what was wrong in this circumstance.”

Formerly the president of Edison International (NYSE:EIX) and TRTP developer Southern California Edison (SCE), Peevey took a jab at the employer he left in 1995.

“The behavior pattern tends to not be as reflective of this being 2013 than it is of 1973,” he said. “It’s just bulldoze ahead with whatever your plans are, and the community will just have to suffer the consequences.”

Commissioner Mark Ferron joined in supporting Peevey’s alternate proposed decision, and said arguments that the line comes closer to homes in other cities than it would in Chino Hills are “not persuasive [because] those segments are generally very short, involve homes on only one side of a wider right-of-way, or are otherwise affected much less than the segment that runs right through the middle of Chino Hills.”

Ferron also acknowledged concerns about the project’s schedule and the additional cost of undergrounding, but said the record did not support the concerns about project delays. He also said he believed SCE’s cost estimates for undergrounding were “grossly exaggerated,” and that he was “not convinced that the need has been demonstrated for a second [underground] circuit, or for three cables per phase, or for reactive compensation.”

Commissioner Catherine Sandoval said, “Many of these issues could have been prevented decades ago by … more prudent decisions by both Chino Hills and Southern California Edison,” including the city establishing a buffer zone between the houses and the ROW, which existed before the houses were built. For its part, SCE could have obtained an easement wider than the 150-foot easement, which she said was one of the narrowest SCE has.

Supporters burst into applause when Sandoval concluded her comments, which had given arguably little foreshadowing of her position, by saying she supported Peevey’s alternate proposed decision, thus giving the measure the majority needed to pass.

Commissioner Michel Florio voted against placing the line underground, and commented that revisiting a decision made 3.5 years ago was one of the things that leads people to view California as a risky place to do business.

“Renewable energy developers have spent literally billions of dollars, relying on the timely completion of this line” since the original, unanimous approval of the project in December 2009, he said. “If those investments turn out to be unusable, [it will have] a very chilling effect on anybody who wants to invest in California.”

The renewable energy projects planned for the next 30 to 40 years will require transmission, he said.

“Without transmission, those projects are essentially worthless,” he said. “What kind of risk are those developers going to be willing to take when the transmission line that they’re depending on could be delayed or even ultimately rejected, years after the fact? I think that is too big a risk [and] really endangers our whole energy future” if project decisions can be overturned years after being approved.

Commissioner Carla Peterman, the CPUC’s newest commissioner, also voted against undergrounding the lines, and cited concerns about substituting the judgment of a mostly new set of commissioners for the judgment of those who had originally decided the case after seeing all of the evidence.

“If we reopen and reconsider this case several years later, I’m concerned that will invite other interested parties who disagree with our decisions to keep coming back with strategic lobbying until we change our minds on other matters,” she said. “Ultimately, a commission decision needs to have some meaning and finality.”

Peterman was also apprehensive about setting a precedent by ordering undergrounding of a line in an instance where the undergrounding was not either proposed by the utility or studied as part of the original project plans.

“I’m concerned about the message we send if we approve undergrounding in Chino Hills but not the other [neighboring] cities of Duarte or Chino,” she added. “Are we setting up a situation where communities that can afford to … fight transmission lines can succeed in changing our minds, while other cash-strapped cities cannot?”

Finally, Peterman addressed the cost issue, noting that “$250m for undergrounding is still significantly more than the $4m it would take to complete the overhead version of the line originally approved.”

Peevey’s decision orders removal of the towers already built in the TRTP right of way in Chino Hills and orders SCE to complete the project by constructing a single circuit, two cable per phase underground XLPE cable in place of the overhead lines. The decision concludes that the cost of constructing the underground line would be approximately $224m, an amount that will be added to the overall cost of the TRTP project and will be borne by all California utility ratepayers.

Residents and officials in Chino Hills were predictably pleased by the decision.

“Thousands of people are going to go home tonight and not have to make the hard decision about [whether] they want to move away from the community they love,” a city spokesperson told TransmissionHub shortly after the vote was taken. “We never were against transmission lines; we just thought there was a better way to put them through our community.”

The city took issue with Peterman’s comment about Chino Hills having the resources to mount a fight.

“The city has been committing these resources during challenging budgetary times,” the spokesperson said. “Our council has put aside money for a rainy day and decided to use it to fight the good fight in this issue.”

SCE said the decision would delay the project and increase its cost, but noted that the amount allowed for placing the line underground may not be sufficient.

“The decision … reduced the cost cap for the project to [$224m], a level significantly lower than estimates SCE had developed, which reflected the higher construction risks associated with underground construction and the actual environmental costs the [utility has] have been experiencing on other transmission projects,” SCE said in a prepared statement.

The decision requires SCE to conduct additional engineering studies on the safety design of the underground line to verify that the less expensive alternative in the decision is feasible, but the utility noted that the additional time for these studies will result in additional challenges to timely completion of the project. SCE has said previously that an underground option could jeopardize the project’s planned in-service date of late 2015.

The company also noted that the decision could still be challenged.

“SCE, consumer advocates, renewable power generators and other parties who opposed undergrounding have 30 days to file an application for rehearing of the commission’s decision,” the company said. “SCE, however, is proceeding with engineering and procurement activities to meet the aggressive schedule.”

When completed, the 250-mile, $2.5bn, 500-kV project will be capable of moving up to 4,500 MW of renewable energy from wind and solar installations in the state’s renewable-rich Tehachapi area to the load pockets of the Los Angeles basin. SCE has called the $2.5bn 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.”

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