Cal-ISO board votes 5-0 to approve changes to improve competitive transmission process

The California ISO’s (Cal-ISO) Board of Governors on Dec. 20, 2013, unanimously approved a proposal to improve the competitive transmission process made during the board’s Dec. 18-19 general session.

Cal-ISO will hold a stakeholder call to discuss the draft tariff language changes on Jan. 13. 

Cal-ISO in September 2013 began an initiative to work with stakeholders to make refinements to support competition in the ISO transmission planning process. Out of that effort has come draft tariff language that includes two clarifications and two policy changes to support the competitive transmission process.

The tariff changes come on the heels of changes made to comply with FERC Order 1000, to enable non-incumbents to compete to build elements of a facility through a competitive solicitation, a Cal-ISO spokesperson told TransmissionHub on Jan. 8.

The first change would permit approved project sponsors to recover all FERC-approved, pre-participating transmission owner costs associated with the project it was selected to build. Currently, the tariff only allows participating transmission owners to make such cost recovery.

“Expanding this mechanism to approved project sponsors beyond participating transmission owners would promote competition in the transmission planning process by further leveling the playing field between incumbents and non-incumbents,” according to a Dec. 11 memo recommending the changes be approved.

The second change would clarify that approved project sponsors who are not participating transmission owners, but who have existing transmission assets, are only required to turn over to ISO operational control the project they are selected to build. The third change would impose a project sponsor application deposit of $75,000 per application as a means to defray costs incurred by the ISO to perform and administer the competitive solicitation process. The ISO chose that amount based on the expenditures it incurred for the Imperial Valley Policy Element competitive solicitation, which totaled slightly more than $200,000 for two project sponsors, and an estimate of the final cost of the Gates-Gregg 230-kV solicitation, which totaled about $250,000 for five sponsors.

“Management expects that this workload is likely to increase with each successive annual transmission planning process cycle because more transmission solutions will be subject to competitive solicitation under the ISO’s transmission planning framework,” according to the memo.

If the costs exceed $75,000, the sponsor would be required to pay them up to a cap of $150,000; if the costs are less than $75,000, the sponsor would be refunded the difference plus interest. For the 2012-2013 transmission planning process, the ISO identified the Gates-Gregg 230-kV and the Sycamore-Penasquitos 230-kV projects for competitive solicitation, as well as the IV Policy Element.

The ISO awarded the Gates-Gregg solicitation to Pacific Gas and Electric (PG&E) and MidAmerican Transmission (MAT), in conjunction with Citizens Energy, and the IV Policy Element to the Imperial Irrigation District. A sponsor for the Sycamore-Penasquitos project has not yet been named.

The fourth change would clarify current tariff provisions requiring approved project sponsors to take the necessary steps to initiate the process of seeking siting approval from the appropriate authorities within 120 days of being selected as the approved project sponsor.

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.