Cal-ISO makes compliance filing at FERC on competitive solicitations

The California ISO (Cal-ISO) effort to improve its competitive solicitation process for new transmission lines took another step forward April 25 with a Cal-ISO filing at FERC to comply with a March 25 order from the commission.

That FERC order mainly accepted the Cal-ISO’s tariff proposal, but it directed the grid operator to make some wording changes to the approved project sponsor agreement (APSA), which is what the Cal-ISO uses when it selects an entity to build new transmission facilities through a competitive solicitation.

The Cal-ISO in 2014 began taking feedback from stakeholders on ways to improve the competitive solicitation process, FERC related in the March 25 order.

As TransmissionHub reported, one of the concerns stakeholders raised during the feedback process involved the wording in the Cal-ISO APSA for when a project sponsor is unable to complete a project and development is transferred to an alternative project sponsor. LS Power, in comments provided to the Cal-ISO, said that the APSA would mandate that the approved project sponsor transfer assets at their net book value in case an alternative project sponsor is selected by the Cal-ISO, and LS Power opposed any mandate to transfer private property to an alternative project sponsor.

In its order, FERC noted that the Cal-ISO revised that section of the APSA to require the approved project sponsor to work “in good faith” with the Cal-ISO, the alternative project sponsor and, if applicable, an interconnecting transmission owner, to transfer responsibility for a project to the alternative project sponsor.

FERC accepted the revision, but conditioned it upon the Cal-ISO removing some other wording in the APSA about the transfer of assets to an alternative sponsor at net book value. The commission acknowledged that the Cal-ISO and others have expressed concern about higher costs for a project or delayed completion to meet reliability needs when an approved project sponsor fails to carry out its responsibilities.

“However, we agree with LS Power that such provisions may not be commercially practical and could have unanticipated cost impacts related to a particular transmission project,” FERC said in the order.

The Cal-ISO said it removed the wording from the APSA in its compliance filing and made a few other revisions called for by FERC.