Transmission from East to West Transmission Policy Institute The History, Present and Future Of Electric Transmission Planning

Transcription

1 Transmission from East to West Transmission Policy Institute 2011 The History, Present and Future Of Electric Transmission Planning

2 OVERVIEW 1. Energy policy overview the intersection of state and federal jurisdiction 2. Planning where we were, are and may be going Federal level State level 3. Cost allocation 4. Siting

3 ENERGY POLICY OVERVIEW

4 A Brief History of Electric Regulation The first 100 years: Vertically integrated, local utilities were tied to their service territories. Beginning in 1978, federal law began unbundling the utilities services.

5 Federal Energy Policy An Overview PURPA (1978): promoted new generation from independent producers; required purchase at avoided cost Energy Policy Act (1992): mandated open access of the transmission grid. FERC Order 888 (1996): functional unbundling of generation and transmission; open access nondiscriminatory access to transmission; encouraged ISO participation

6 Federal Energy Policy An Overview FERC Order 2000 (1999): put transmission under the control of an RTO; improve grid operations EPAct 2005 (2005): new FERC authority for reliability; required the ID of transmission congestion corridors; provided backstop siting authority FERC Order 890 (2007): mandated an open and transparent transmission planning process Additional federal energy policy? TBD

7 State Energy Policy An Overview State laws: generally supervise and regulate public utilities providing service in the state Rates: rates for retail electricity sales are regulated by state commissions - just and reasonable rates for adequate service Construction/Siting: some states determine need and location of new infrastructure

8 Example of Jurisdictional Challenges Today: Who Regulates (or should regulate) the rates for this?

9 TRANSMISSION PLANNING: What is it?

10 Transmission Planning Basic Steps 1. Indicative planning - General concept of where and what size of line is needed - Identifies basic end points of a transmission line 2. Detailed planning to substation - ID specific points on grid that transmission will touch 3. Routing - Specific route for the line with tower locations

11 Transmission Planning Basic Steps: Indicative

12 Transmission Planning Basic Steps: Substation

13 Transmission Planning Basic Steps: Routing

14 TRANSMISSION PLANNING: Geographic Scope of Transmission Plans

15 Transmission Planning Is Broader Better? Reliability Considerations

16 Transmission Planning Is Broader Better? Policy Considerations

17 Transmission Planning Is Broader Better? Cost Considerations

18 Transmission Planning If Broader is Better. How Broad?

19 Cooperative Ownership Model In the West Most of the West is not the East Large states, smaller population densities Doesn t necessarily lend itself to an RTO model Enormous political opposition; i.e. CA is the elephant in the room: most of the West does not want to hitch its wagon to CA. Western states have a long history of co-ownership of transmission lines Looking at a Western Electricity Coordinating Council (WECC) map reveals co-owned transmission and generation in nearly every state within the boundaries, suggesting policy makers are not hesitant to build necessary transmission 19

20 WECC Map 20

21 Western Transmission Planning Western states are engaged in multiple forums, from RTOs to broad regional groups to subregional forums. Arizona Perspective WECC Is the Regional Entity responsible for coordinating and promoting bulk electric system reliability within the Western Interconnection. WestConnect Is composed of utility companies providing transmission of electricity within WECC. Subregional groups include: Colorado Coordinated Planning Group (CCPG) Sierra Subregional Planning Group (SSPG) Southwest Area Transmission (SWAT) SWAT composed of transmission regulators, users, operators and environmental entities with the goal of promoting regional transmission planning in the Desert Southwest.

22 WESTCONNECT and SWAT

23 Transmission Planning in Arizona and other Western States In Arizona, transmission planning is conducted and reviewed on multiple levels. Individual utilities conduct independent and coordinated studies, and must annually submit Ten Year Plans to the ACC outlining anticipated capital projects in that timeframe. This planning occurs within subregional transmission groups like SWAT. There have been five BTA reports produced since the inception of the process in The Fourth BTA (ACC Decision No issued in 2006) ordered regulated utilities in Arizona to assess the state s renewable energy potential. (zones drawn) In December of 2008, the ACC approved the Fifth BTA (Decision No ) and included a provision that Commission-regulated electric utilities shall, by April 30, 2009, conduct a joint workshop or series of planning meetings to develop ways in which new transmission projects can be identified, approved for construction, and financed in a manner that will support the growth of renewables in Arizona. (potential renewable energy transmission lines drawn). 23

24 Interconnection Requests 24

25 500 KV 345 KV 345 KV 345 KV Potential Configuration for Transmission to Serve All Available Renewable Resources 230KV TO SIGURD (PACE) 345KV TO HUNGINGTON (PACE) 230KV TO CURECANTI UTAH SHIPROCK COLORADO CRYSTAL 500 KV GLEN CANYON NAVAJO 230 KV 345 KV SAN JUAN McCULLOUGH ELDORADO MEAD 500 KV 345 KV 500 KV 100 MW 500 KV DESERT ROCK FOUR CORNERS 970 MW MOENKOPI NEVADA CALIFORNIA 500 KV MOHAVE 230 kv 500 kv ROUND VALLEY SELIGMAN 500 KV COCONINO 500 kv 345 KV McKINLEY 230KV 230KV 500 KV YAVAPAI CHOLLA 345 KV 1005 MW 230 kv WILLOW LAKE 500 kv 345 KV 500 KV 500 KV 1032 MW CORONADO 345 KV PREACHER CANYON 500 KV SPRINGERVILLE DEVERS CALIFORNIA ARIZONA 500 KV PALO VERDE/ HASSAYAMPA 2009 REDHAWK 500 kv TS5 500 KV GILA RIVER JOJOBA 230 KV 2012 WESTWING LIBERTY PINAL WEST 345 KV PHOENIX RUDD SANTA ROSA TS KYRENE PINNACLE PEAK BROWNING DESERT BASIN 500kv 500 KV CASA GRANDE SAGUARO SILVER KING PINAL SOUTH 230 KV TO SWTC ARIZONA GREEN LEE 345 KV 345 KV IMPERIAL MIGUEL VALLEY NORTH GILA 500 KV 500 KV YUMA WECC PHASE 2 PROPOSED 500 kv LINE POTENTIAL LINE WIND RESOURCE SRP 10 yr PLANS TEP 10 yr PLANS SOLAR RESOURCE APS 10 yr PLANS BIOMASS RESOURCE NEW GENERATION GEOTHERMAL RESOURCE POTENTIAL INJECTION POWER PLANT MAJOR SUBSTATION 500 KV MW ARIZONA MEXI CO GILA BEND 230 kv TAT MOMOLI 345kv SOUTH 345 KV TORTOLITA 500kv 345kv EAST LOOP TUCSON 345kv VAIL 345kv BICKNELL 345 KV WINCHESTER 345 KV 230 kv 350 MW NEW MEXICO 25

26 Western Renewable Energy Zones project (WREZ) Western Governors Association and U.S. Department of Energy launched the WREZ with the purpose of identifying western renewable energy zones and the transmission lines needed to access them. Four Phase Process contemplated Phase 1: Identify developable renewable energy zones Develop renewable resource supply curves for each zone Phase 2: Develop model to estimate delivered price of power from renewable energy zones to load centers Develop conceptual transmission plans Phase 3 and Phase 4 Foster coordinated renewable resource acquisition Facilitate interstate transmission for renewables 26

27 WREZ Zones 27

28 New Planning Efforts: Western Regional Transmission Planning Department of Energy, through stimulus funds, has backed Western Interconnectionwide transmission studies: Topic A: Interconnection-Level Analysis and Planning Topic B: Cooperation Among States on Electric Resource Planning and Priorities 28

29 Other Potential Solutions/Issues What will California do? Whether CA adopts an in-state only approach to renewable energy projects will heavily impact transmission development/planning. 60 percent of all of the renewable energy requirements in the West are the result of California s 33 percent RPS. California and its neighboring states need to decide together how to move forward. 29

30 TRANSMISSION PLANNING: Recent Developments

31 FERC NOPR FERC Notice of Proposed Rule Making on Transmission Planning & Cost Allocation (6/2010) Planning: FERC identifies deficiencies that hinder wholesale power markets Need for stronger regional plans Lack of coordination among planning regions Potential for discrimination because of a right of first refusal for development Cost Allocation: current methods hinder development and may not be just and reasonable

32 TRANSMISSION COST ALLOCATION AND COST RECOVERY

33 FERC on Cost Allocation knowing how the costs of new transmission facilities would be allocated is critical to the development of new infrastructure, because transmission providers and customers cannot be expected to support the construction of new transmission unless they understand who will pay for the associated costs.

34 Cost Allocation

35 Cost Allocation General agreement = cost causers and beneficiaries should pay for upgrades. But what is a cost causer? Who is a beneficiary of new transmission? Current proceeding at FERC involving the Midwest ISO Postage Stamp: every one pays a portion for the overall benefits of good transmission??? Developer of project pays for what they build; recover in their rates only

36 FERC s Cost Allocation NOPR: A View from the West FERC Cost Allocation NOPR: will it help or hurt? 180 parties provided comment, with diverse views. Major issues in the West include: Other than CAISO, there is no RTO in the West. No TAC into which the cost of lines can be put, so how do costs get apportioned across all utilities? Will Commissioners be left out of the process when sub-regional transmission groups, made up of utilities, are tasked with deciding which lines receive cost allocation treatment? This is in contrast to RTO states, where Commissioners have some role in the RTO. Should FERC give the states more time to work through their DOEfunded transmission planning processes before moving on cost allocation? 36

37 What is the Real Issue? Renewable Energy: 9 of 11 States in the Western Interconnection have renewable standards or goals. West is clearly committed to developing renewable energy and associated transmission. Many Western utilities are long on capacity which limits some need for new resources. Federal government has not acted on carbon legislation which could spur repowering or resource acquisitions which would require additional transmission. Federal government could assist by creating a transmission infrastructure bank. Many utilities are struggling with capital expenditures and a challenging financing environment. 37

38 TRANSMISSION SITING

39 Transmission Siting NIMBY issues abound long lines often mean many potential NIMBYs Intrastate transmission less concern; generally one main regulatory agency, one timeline etc Interstate transmission many more agencies, different timelines, different reviews (what if one state needs the line, and the other is just a pass through?)

40 Transmission Siting WI EXAMPLE

41 Transmission Siting WI EXAMPLE Arrowhead Weston by the numbers 220 miles of transmission line 345 kilovolts 1,564 transmission line structures 50 million pounds of steel used during construction 850 property owners 10,000 pieces of opposition correspondence 8 counties opposed project initially 25 town/village boards opposing project initially 75 legal challenges to project 72 months of permitting 27 months of construction $439 mil. cost to build

42 Southern California Edison Palo Verde- Devers No. 2 42

43 Southern California Edison Palo Verde Devers No. 2 Proposed 97 mile 500KV transmission line; applicant was Southern California Edison, from the Palo Verde Hub to the Devers substation in Riverside California. Sierra Club, landowners, Harquahala Irrigation District, Central Arizona Water Conservation Irrigation District, other utilities intervened. 15 hearing days in Fall and winter of 2006 and 2007; one of the longest powerline siting cases in Arizona history.

44 Southern California Edison Palo Verde Devers No (B): In arriving at its decision, the Commission shall comply with the provisions of ARS and shall balance in the broad public interest, the need for an adequate, economical and reliable supply of electric power with the desire to minimize the effect thereof on the environment and ecology of the state : Commission must determine the environmental impacts of the project on the state.

45 Southern California Edison Palo Verde- Devers No. 2 The Commission begins with an analysis of the need for an adequate supply of electricity. Absorption of Arizona s excess generating capacity will force the installation of new generation sooner. Arizona utilities load growth projections showed them growing into the excess natural gas-fired generation at the Palo Verde Hub by the year PDV2 would have allowed California utilities to usurp most of that power. SCE asserted during the case that it believed that in order to take maximum advantage of the power line, it would actually have to build additional natural gas plants inside Arizona. The project will not improve resource adequacy in the short term and could have a deleterious effect in subsequent years 45

46 Southern California Edison Palo Verde Devers No. 2 The identified project was vastly less compelling for Arizona and Arizona ratepayers than for California. Environmental impacts to the Kofa National Wildlife Refuge. Massive imbalance in benefits/ detriments: CA benefited by $1 billion; AZ ratepayers were harmed by $240 million, which would result when the cost of natural gas-fired electricity at the Palo Verde Hub rose to meet the price that California was willing to pay. Spot market prices at the Hub would have risen $2.90 per MWh, or 5 percent. Edison asserted that it would not buy power at the Hub during the summer months, when Arizona utilities would need it the most, but failed to make any concrete assurances that this would NOT happen.

47 Lessons Learned from Devers No. 2 A more holistic approach to transmission planning is necessary. The challenge with Devers No. 2 was that it focused on an economic argument but this resulted in a benefit to CA at the expense of AZ. SCE did not present a policy-oriented or other view point which would have buttressed its application. Going forward a more cooperative regional approach is needed which can address, economics, reliability and policy. Limiting projects to one bucket may prove detrimental.

48 Barriers to Transmission Siting in the West: the federal agency problem Despite the broad Federal interest in developing transmission and renewable projects, there appears to be a disconnect between this goal and specific actions by federal agencies. Ex) Forest Service approval for projects can be onerous to prohibitive for projects. Ex2) BLM approval is extremely time intensive.

49 Tehachapi Project

50 THE END