CPUC administrative law judge recommends approving West of Devers project with alternative configuration

The California Public Utilities Commission (CPUC) should approve Southern California Edison’s (SCE) West of Devers transmission project with an alternative configuration than what the utility proposed, a CPUC administrative law judge (ALJ) said in an April 11 proposed decision.

The decision will be addressed by the CPUC at the commission’s May 12 meeting, at the earliest, Karen Clopton, chief ALJ at the CPUC, wrote in a letter accompanying the decision by ALJ Hallie Yacknin.

The decision grants SCE a certificate of public convenience and necessity for the project, finding that the benefits of facilitating delivery of renewable energy resources and providing infrastructure to help California meet its renewable portfolio standard (RPS) outweigh the adverse environmental impacts on air quality, noise, visual resources and cultural resources.

Parties in the case may file comments on the decision, Clopton said.

SCE is pleased with the proposed decision, a utility spokesperson told TransmissionHub April 12.

“SCE will continue reviewing the details of the proposed decision and will be submitting comments” in early May, the spokesperson said.

The West of Devers project involves replacing or upgrading the existing 220-kV transmission lines and associated facilities between the Devers, El Casco, Vista and San Bernardino substations in Riverside and San Bernardino counties. The project would increase the transmission capacity of the existing West of Devers corridor from the current 1,600 MW to about 4,800 MW, and allow SCE to meet the generator interconnection requests of multiple renewable power projects in the region, according to the ALJ decision.

The ALJ decision adopted two alternative configurations that differed from what SCE proposed in order to minimize visual impacts and reduce construction effects on nearby residents. The Tower Relocation Alternative would place towers along a center line about 50 feet farther from the edge of the right of way (ROW) in particular residential segments where visual impacts have been identified, and the Iowa Street 66-kV Underground Alternative would place a subtransmission line underground for about 1,600 feet.

Based on SCE estimates, the cost of the project configured with the two alternatives is $878m, plus a contingency of $132m, the ALJ said. The decision adopted a maximum cost cap of $1.01bn for the project.

SCE, a subsidiary of Edison International (NYSE:EIX), told the CPUC that the reasonableness of costs and the associated ratemaking and revenue requirement associated with the project will be under FERC jurisdiction, and it asked for authority to increase the maximum cost cap by advice letter to the CPUC. SCE should consult with the CPUC Energy Division on whether an application, advice letter or petition for modification would be more appropriate if it seeks to revise the cost cap, the ALJ said.

SCE originally proposed the project as part of a Devers–Palo Verde No. 2 transmission line that would stretch into Arizona and was subsequently rejected by regulators in Arizona, with the California portion opposed by Morongo Band of Mission Indians, the ALJ related. Although the CPUC approved the California portion, it found the facilities to be infeasible because of the opposition of the Morongo tribe, resulting in a revised application that included an agreement with the tribe, the decision noted.

The decision directs SCE to comply with the environmental mitigation measures outlined in the Mitigation Monitoring, Compliance and Reporting Plan that was developed as part of the state’s review of the project under the California Environmental Quality Act (CEQA).

The 48-mile project last August received a draft environmental impact statement (EIS) from the federal Bureau of Land Management (BLM), and a final EIS is pending at the agency, according to the BLM website for the project. About one mile of the proposed corridor is on BLM-administered public lands, while about six miles would cross the reservation of the Morongo Band of Mission Indians, and it would be within a designated utility corridor within an existing right of way (ROW), BLM said.

SCE also sought, and the ALJ decision approved, a transaction between the utility and Morongo Transmission LLC that would provide SCE with access to a ROW across the tribal land for construction of a portion of the project. Morongo Transmission is affiliated with the tribe, and it negotiated a 30-year ROW lease agreement that permits SCE existing facilities and the West of Devers upgrade project to cross the reservation in exchange for an option to invest up to $400m at the time of commercial operation of the project, the ALJ noted.

The CPUC Office of Ratepayer Advocates (ORA) challenged the transaction, asserting that it places financial risks on SCE ratepayers by burdening them with the total cost of the project if Morongo Transmission declines to exercise its investment option in the project, the ALJ related. The ALJ found the transaction to be in the public interest because SCE ratepayers will pay for the cost of the facilities through FERC-approved transmission rates regardless of whether Morongo Transmission invests in the project.

The planned transaction “will enable SCE to retain a right-of-way across the Morongo Reservation and avoid SCE from having to incur the cost of re-routing existing facilities around the Reservation, and it will do so in a manner that is ratepayer neutral,” the ALJ said.

ORA also challenged the need for the facilities, asserting that generation interconnection requests alone cannot support approval of a transmission project because the California ISO’s (Cal-ISO) generation interconnection process does not test for economic need, and generators do not have to make any financial commitments in making interconnection requests.

As of October 2015, there were 6,090 MW of generation project capacity in the project areas requesting full capacity delivery status interconnection, of which 1,859 MW were reflected in executed generator interconnection agreements, and of which 860 MW were under executed power purchase agreements, the decision noted.

The CPUC does not approve construction of transmission lines “based solely on the evidence of generator interconnection requests, which have most recently reflected a certain amount of speculation, rather than firm commitments to development,” the ALJ said.

The CPUC also examines a project’s potential to access renewable resources and the uncertainty in terms of delay and cost in considering alternative means to achieving California’s 50% RPS goal.  

Under FERC orders and interconnection agreements executed under the Cal-ISO’s FERC tariff, SCE is obligated to provide for the requested level of interconnection and the Cal-ISO has determined that the existing West of Devers transmission lines are inadequate for the utility to meet those requests, the decision noted.

“This evidence of SCE’s current and potential obligations to interconnect generation projects and the need for transmission upgrades in order to safely and reliably do so supports a finding of need for the proposed project,” the ALJ said.

Although ORA asserted that interim transmission upgrades on the West of Devers transmission system could accommodate generation requests that have executed power purchase agreements, that does not address additional capacity that could be needed and it was countered by a Cal-ISO witness who testified that there would be reliability concerns with interim upgrades, the decision noted. Under a double-line outage, at least two natural gas-fired generation units would need to be online to meet load needs in San Bernardino and provide voltage support under the interim upgrades, which also rely on a “special protection system” that would exceed the Cal-ISO’s planning standards, the ALJ said.

In addition, the project is consistent with the principles of transmission planning that favor the use of existing ROW by upgrading existing transmission facilities where technically and economically justifiable, the ALJ said.

Addressing the state’s environmental review of the project, the ALJ found that the facilities, with the alternative configurations recommended, would not have any significant impacts that cannot be mitigated with the measures identified in the Mitigation Monitoring, Compliance and Reporting Plan included in the order.

Besides the Tower Relocation Alternative, which would reduce visual impact and reduce construction noise, emissions and traffic disturbance for nearby residents, the Iowa Street 66-kV Underground Alternative would eliminate visual impacts associated with a new subtransmission line along the corridor, the ALJ said. The latter alternative would place a 66-kV subtransmission line underground for about 1,600 feet, starting from 275 feet north of Iowa Street’s intersection with Orange Ave., and emerging on the south side of Barton Road.

The ALJ found that a Phased Build Alternative was the environmentally superior alternative to what SCE proposed because it would reduce construction by retaining some of the existing double-circuit towers on the current West of Devers section, and it would cost less than what was approved, with an estimated cost of $771m. But the Phased Build Alternative, which would have future construction to address transmission capacity needs, would not boost the capacity to the level of the approved configuration, with a gain of 3,000 MW of capacity compared with the 4,800 MW gain of the approved configuration.

“Put another way, the proposed project with the Tower Relocation and Iowa Street 66 kV Underground Alternatives would provide 60% more capacity than the Phased Build Alternative at an incremental cost of 14%,” the ALJ said.

It would be “imprudent and infeasible as a matter of policy and economics to fail to seize this opportunity to provide additional infrastructure that will potentially facilitate achievement of the 50% RPS,” the ALJ concluded in siding with the second environmentally preferred alternative.