City of Palo Alto (ID # 6416) City Council Staff Report Report Type: Informational Report Meeting Date: 1/25/2016 Summary Title: Update on Second Transmission Line Title: Update on Progress Towards Building a Second Electric Transmission Interconnection Between the City, Stanford National Accelerator Laboratory and Stanford University From: City Manager Lead Department: Utilities Executive Summary The purpose of this report is to update Council on progress towards a new 60kV electric transmission line between the City of Palo Alto (City), the Department of Energy (DOE), SLAC National Accelerator Laboratory (SLAC), and Stanford University (Stanford). The proposed 60kV transmission line (the Project) would provide an interconnection between two existing transmission corridors - the 230 kilovolt (kv) line in the west serving SLAC and the 115kV line in the east serving the City. The new 60kV line would provide SLAC, Stanford and the City transmission service reliability improvements and potential cost savings. Since four parties are involved in this Project (City, DOE, SLAC and Stanford), detailed feasibility studies have been conducted and reviewed by all participants to analyze the Project s reliability and cost implications, which the City and Stanford have jointly funded. The DOE and SLAC are particularly concerned with any incremental power quality issues that may result from a more integrated system and they have identified a number of betterments they require to their existing system before they will participate, the funding for which remains to be resolved. Stanford remains a critical party to enable this Project to move forward and the parties current focus is on possible business models to allow Stanford to access the new line over Palo Alto s distribution system. At this stage, none of the parties have committed to actual construction and funding of the Project. Council will have full opportunity for review and approval prior to any commitment for construction and funding. Background The City of Palo Alto s electric distribution system is connected to Pacific Gas and Electric Company s (PG&E) transmission grid via three 115 kv transmission lines. Although three lines would normally provide redundancy and back-up power delivery to the City, all three lines run in a common corridor on the bay side of the City, a corridor that is in close proximity to the Palo City of Palo Alto Page 1
Alto Airport. The common corridor and proximity to an airport means that the City s power supply is susceptible to single events that can affect all three lines, as happened in February of 2010 when a small aircraft hit the power lines resulting in a city-wide power outage for over 10 hours. To minimize these possibilities, it is in the City s interest to find a physically diverse connection for power supply to the City. Staff has been investigating options for an alternative connection to the transmission grid for numerous years. Following the February 2010 plane crash and subsequent city-wide outage, Council included the goal to evaluate alternative electric transmission line sources in its priorities for 2011 (Staff Report No. 1497, March 21, 2011). Further in March 2011, Council adopted a guideline and implementation plan item to evaluate interconnection options to the City to increase service reliability and lower delivery costs. Council adopted this guideline and implementation plan as part of the City s updated Long-term Electric Acquisition Plan (LEAP) (Resolution 9152, Staff Report No. 1317). The relevant portion of the applicable LEAP Strategy #8 is as follows: 8. Transmission and Reliability Pursue the reliability of supply at fair and reasonable transmission and delivery costs by: c. Evaluating interconnection options to the City to increase service reliability and lower delivery costs. Staff has provided updates on the evaluation of interconnection options in the Utilities Quarterly reports to the Utilities Advisory Commission (UAC) since Council s approval of LEAP. Over the past three years, staff concluded that the optimal interconnection option is a connection between the City s Quarry electric substation and the SLAC substation. This Project has the added advantage of also providing redundant back-up service to SLAC, providing Stanford an alternative connection and reducing transmission costs for the City s electric ratepayers. Implementing the Project will require a multiparty effort including Stanford--the land owner and potential Project participant, and SLAC and DOE--Project participants and the owners of the transmission assets to which the new transmission line would connect. This effort has required several feasibility studies, as each participant has explored the reliability and cost implications of the Project. Utilities Department appropriated funds (the Feasibility Study Funds ) from the Electric Fund Capital Improvement Program (CIP) EL-06001-230 kv Electric Intertie and its consulting budgets to conduct these evaluations. Summary of Feasibility Studies Load Flow Study Although no new electric customer loads would be added to the regional electric grid as a result of the Project, the City and Stanford commissioned an updated Load Flow Study to determine potential Project impacts on PG&E s system. The Load Flow Study analyzed various normal and fault condition scenarios. The results of the study showed that the proposed Project would be able to deliver power while improving regional power reliability and quality. City of Palo Alto Page 2
230 kv Overhead Line Assessment Stanford commissioned a study of the existing DOE-owned 230 kv transmission line to determine if it has capacity to carry additional load. This study evaluated the maximum load (temperature) at which the line could operate in compliance with California Public Utilities Commission s General Order 95 (overhead electric line rules regarding ground and structure clearance) and identified spans that could require additional work to meet current GO 95 criteria if the Project proceeds. Routing Study Stanford commissioned a Routing Study which analyzed various route options for a potential underground 60kV line between SLAC and the City s Quarry substation, with a focus on route alternatives that best meet environmental and engineering constraints. Transient Analysis The City commissioned this study to determine whether the combined system would be as reliable and stable as the current system. The study concluded that the Project would create a reduction in voltage fluctuations overall, with generally positive impacts on the magnitude of voltage depressions. SLAC Studies SLAC commissioned their own transient and steady state analyses for an independent review of the impacts to their power quality and reliability. Their studies indicated that while the Project would mitigate SLAC s exposure to some PG&E faults there was an additional exposure to faults on the City s 60kV system. Although the City s occurrence of faults is extremely low--2 or 3 events in the past 10 years -- and notwithstanding the reduction in magnitude of the PG&E fault impact, SLAC has determined that they need mitigation measures in place at a cost of between $5M-$23M, depending on the level of correction they want from both their existing exposure and their perceived risk from connecting to the City s system. SLAC s steady state analysis concluded the Project would not add much value to the backup service provided to SLAC, but SLAC is still interested in having a fully redundant system designed into and funded through the Project. Next Steps Although the studies to date indicate that the proposed interconnection is feasible, would strengthen the local transmission system, could be designed and operated to maintain and improve power quality, and could provide for the participants current and forecasted electric load, much work remains to move the Project forward. In particular: (a) The successful completion of the Project will require additional joint evaluation of various issues, including, but not limited to, the method by which the City can provide electric transmission service to Stanford; land use and environmental analysis under the California Environmental Quality Act (CEQA); siting issues and easement acquisition; and possibly the negotiation of separate agreements with other parties such as PG&E, the Western Area Power Administration (WAPA), and the United States DOE. City of Palo Alto Page 3
(b) Preliminary design of the proposed Project could entail substantial expenditure of funds by both the City and Stanford. (c) The completion of the Project may be infeasible if the City, Stanford, SLAC and DOE cannot resolve contractual issues and execute and deliver mutually acceptable agreements pertaining to this Project. Project Timeline A project of this magnitude will take between three to four years to complete once an agreement is in place amongst the parties. An estimated duration of each task follows: Project scope and environmental review would take from six months to one year. Design contracting and the actual design would take approximately one year. Construction contracting, construction, and project commissioning would take between one year and one and a half years. Alternatives There is an alternative to the SLAC 230kV connection that will provide redundant transmission service to the City. The alternative is a PG&E project that would connect the Adobe Creek Substation near San Antonio Road with PG&E s Ames Substation in Mountain View. Although the PG&E alternative would provide the redundant service and come at minimal cost to the City, it does not provide the same level of local system benefits or offer the opportunity for the City to avoid any transmission access charges. This alternative has been proposed by PG&E to the California Independent System Operator and is currently on hold pending the results of the City s negotiations on the SLAC project. Resource Impact The City has borne expenditures related to transmission-level interconnection studies beginning in 2005. More recently the load flow study was updated and the three new studies were conducted, as described above, to be used as the basis for the study and analysis summary for SLAC and the DOE. The City s portion of the load flow study update and three new studies is $123,000. This includes: $85,000 for the City s share of the overhead line assessment and routing study to be reimbursed to Stanford under a cost sharing agreement executed in December 2013. The total cost of these two studies was $217, 000, with $132,000 paid by Stanford. $27,000 for the City s share of the updated load flow analysis paid to Flynn Resources Consultants, Inc. under its existing consulting agreement with the City. The total cost of the load flow analysis was split 50/50 with Stanford; and $11,000 for the City s share of the transient analysis, paid to Flynn Resources Consultants, Inc. under its existing consulting agreement with the City. This Project is also consuming 0.25 FTE in Utilities Engineering who is responsible for managing the meetings with the various parties and consultants. Staff will be recommending the contracting of additional resources to offset the staff time dedicated to this Project. City of Palo Alto Page 4
Additional estimated costs if the City, Stanford and SLAC agree to proceed with the next steps of project evaluation will include: $40,000 for PG&E to perform a study assessing the impacts of the interconnection to its system, which would include laying the groundwork for additional electrical protection requirements required as a result of the proposed Project; and $5-7 million for the detailed evaluation, negotiations and contract drafting, and preliminary design described above in Next Steps. In the event the City, Stanford and SLAC/DOE proceed with the Project, the total construction cost is estimated at $50-90 million. Completing the required land use, legal and environmental analysis and regulatory approvals will also impact that estimate. The City s share of the costs for the next phase of studies and construction has yet to be determined. The allocation of these costs will be addressed in the terms of agreements yet to be executed between the parties. Staff will include estimates of the City s share of the cost of the next phase of evaluation and design for approval in Fiscal Years (FYs) 2017 and 2018 operating and CIP budgets for the Electric Fund. Appropriation of these funds will only occur if and when agreements are signed between the City, Stanford and SLAC/DOE to proceed with the next phase. Staff will continue to report on the Project s status to the UAC and Council in the Utilities Quarterly reports. City of Palo Alto Page 5