The California ISO (CAISO) on March 23 said that its Board of Governors has approved the 2017-2018 Transmission Plan to support electric system reliability while canceling or modifying previously approved projects to avoid $2.6bn in future costs.
The annual plan is developed in coordination with the California Energy Commission, California Public Utilities Commission (CPUC), and stakeholders over 15 months, culminating every March with board action, the ISO noted.
The plan, which outlines the proposed design and construction of transmission networks for the next decade, identified 17 new transmission projects at a combined cost of nearly $271.3m, the ISO said. The plan also recommends the cancellation of 18 transmission projects and revisions of 21 other projects in the Pacific Gas & Electric (PG&E) area, as well as two in the San Diego Gas & Electric (SDG&E) area, avoiding an estimated $2.6bn in future costs, the ISO said.
The changes were mainly due to changes in local area load forecasts, and strongly influenced by energy efficiency programs and increasing levels of residential, rooftop solar generation, the ISO noted.
As noted in the board-approved plan, the canceled PG&E projects include the:
- Ashlan-Gregg and Ashlan-Herndon 230-kV line reconductor project
- Evergreen-Mabury Conversion to 115 kV project
- Fulton 230/115-kV transformer project
- McCall-Reedley #2 115-kV Line project
- Oro Loma-Mendota 115-kV Conversion Project
The ISO noted that in previous transmission plans, it determined that those projects were needed to mitigate identified reliability concerns, interconnect new renewable generation via a location constrained resource interconnection facility project or enhance economic efficiencies.
As noted in the board-approved plan, two previously approved projects in the SDG&E area are no longer needed due to system configuration change and load reduction:
- The $30m Mission-Penasquitos 230-kV circuit project, which was approved as a reliability project to mitigate the thermal overload concern on TL13810 Friars-Doublet Tap 138-kV line in the ISO’s 2014-2015 Transmission Plan. The project would have utilized a de-energized portion of the Mission-San Luis Rey 230-kV line (TL23001) that would have been left behind after completion of the original Sycamore Canyon-Penasquitos 230-kV project. However, the CPUC recently approved an alternative line route that allows the new circuit go underground directly from Sycamore Canyon to Penasquitos substation. The ISO reevaluated the need for the Mission-Penasquitos 230-kV circuit project in this planning cycle and did not identify the thermal overload concern on TL13810 Friars-Doublet Tap 138-kV line because TL23001 remained unchanged. In addition, the ISO’s further evaluations did not recognize a negative impact on generation deliverability or the local capacity requirement in the area
- The $0.5m to $1m Sycamore-Chicarita Reconductor Project, which was approved as a reliability project in the ISO’s 2012-2013 Transmission Plan. The ISO reevaluated the project in this planning cycle and did not identify the need for the project to meet applicable reliability standards, generation deliverability, or local capacity requirements
Another seven PG&E projects are either on hold, or recommended to be delayed, pending further review in future transmission planning cycles, the ISO said in its statement.
According to the plan, consistent with recent transmission plans, no new major transmission projects have been identified at this time to support achievement of California’s 33% renewables portfolio standard given the transmission projects already approved or progressing through the CPUC approval process. Also, four economic-driven transmission projects totaling an estimated capital cost of $89m are recommended for approval, providing benefits ranging from energy costs savings to reductions in local capacity requirements.
In its statement, the ISO said that the board also changed rules to improve the congestion revenue rights (CRR) auction, a mechanism for market participants to hedge their congestion cost risks. The rule changes are expected to be in place before the 2019 annual auction held in July. The intent of the changes is to more closely align CRR auction prices to the ISO’s payouts to CRRs purchased in the auction, the ISO added.
The ISO noted that it will reduce the number of CRR purchase options, which will increase the CRR auction’s efficiency by increasing competition in the auction. Another change is to more accurately estimate transmission capacity available for CRR purchases by establishing a deadline to report transmission outages prior to the CRR annual auctions. The ISO added that additional enhancements for the 2019 auction are planned over the next few months as well as modifications for the 2020 auction that would further mitigate payouts in excess of revenues.
The ISO noted that the board also approved changes in rules that govern how energy suppliers recover their natural gas costs, allowing more flexibility in accounting for regional diversity and the gas markets volatility.