TRANSMISSION

IN CALIFORNIA
MARCH 2023
TABLE OF
CONTENTS

1 Introduction 1

2 CEERT’s Leadership in Promoting Transmission Development 3

3 Shared Responsibility for Transmission Planning in California 5

4 CAISO 20-Year Transmission Outlook Report 7

5 CAISO 2022-2023 Transmission Plan 13

A. SCE Area 14
B. SDG&E Area 15
C. PG&E Area 16
D. Special Study for Reduced Reliance on Aliso Canyon 17

6 Senate Bill 877 Requirements 18

7 CAISO Interconnection Queue Management Reform 21

8 Reconductoring of Existing Transmission Corridors 24

9 CPUC Transmission Permitting Reform 26

10 Transmission Project Implementation Challenges 29

11 Transmission Financing Options 31

12 Summary of Findings and Recommendations 32

A. Findings 32
B. Recommendations 33

13 Appendix 35
A. Maps 35
B. Tables 38
 1
INTRODUCTION

Upgrading existing and building new high voltage transmission projects is currently the key
challenge facing energy policymakers. Overcoming this challenge is absolutely necessary
to make substantial progress in the near future towards decarbonizing the electric system
and the economy. Most of California’s electric transmission system was built before 1980 to
deliver electricity from fossil, nuclear and hydroelectric generation.

Over the past twenty years the costs of clean energy technologies including wind, solar and
battery storage have declined with remarkable speed as the industries that manufacture
these technologies have scaled up. These technologies are now replacing fossil fuels as a
source of electricity. Geothermal and other energy storage technologies, including green
sources of hydrogen, are expected to follow the downward cost trajectory over the next
decade.

TRANSMISSION IN CALIFORNIA | 1
Suitable geographical locations where these technologies can be located have also
expanded with the declines in technology costs. Solar and wind projects paired with
battery storage are now cost competitive with operating natural gas power plants
throughout most of the Western United States. This wider geographical range where
clean energy technologies can be located creates the potential for rapid reductions in
greenhouse gas (GHG) emissions and improved electric system reliability as more diversity
is built into the regional power system. To unlock that potential of geographical and
technological diversity much more transmission is needed.

Major changes are beginning to occur in how customers use electricity to improve their
lives. Electrification of mobility and of heating and of other end uses in buildings will
rapidly increase the amount of electricity needed over the next decade and beyond.
As the economy’s dependence on electricity grows, the importance of multiple robust
transmission pathways in and through California will increase.

The passage of the Inflation Reduction Act, coupled with recent decision of the California
Public Utilities Commission (CPUC) to order the development of 15.5 gigawatts (GW) of
firm, clean new sources of energy, has resulted in a surge of interconnection applications to
tie these resources to the bulk power grid.

The quantity of applications in the California Independent System Operator’s (CAISO)

Cluster 14 is so great that the CAISO had to expand the period of time it needs to study the
need for transmission expansion to provide deliverability. California is fortunate that there
is such a high-level interest among independent power developers in building clean energy
resources to help the State meet its GHG reduction goals. However, California will need
to ensure sufficient transmission capacity is available in order to leverage this competitive
market. Bottlenecks on the transmission system can be very costs as the need for clean
energy grows rapidly.

TRANSMISSION IN CALIFORNIA | 2
 2
CEERT’S
LEADERSHIP
IN PROMOTING
TRANSMISSION
DEVELOPMENT

The Center for Energy Efficiency and Renewable Technologies (CEERT) has been a leader
in promoting the expansion of California’s transmission system going back to the 1990s, as
the opportunity for large scale wind development emerged. The CEERT Board and its staff
were instrumental in advocating for the Tehachapi Renewable Transmission Project (TRTP).1
This innovative project consisted of new and upgraded high-voltage electric transmission
lines and substations that can carry 4,500 megawatts (MW) of electricity from renewable
generators in Kern County south to the Los Angeles basin.

The TRTP, built by Southern California Edison (SCE), included two new gathering
substations (Whirlwind and Windhub) and 173 miles of transmission lines. The substations
and lines were fully energized at the end of 2016, twelve years after SCE submitted its initial
application to the CPUC for authorization to construct the transmission facilities.

Another initiative that CEERT led under contract with the California Energy Commission
(CEC) was the Renewable Energy Transmission Initiative (RETI 1.0). RETI was set up by
state policymakers to identify competitive renewable energy zones, to identify transmission
corridors to facilitate the development of transmission projects and to expedite siting and
permitting of renewable generation and transmission lines.

RETI 1.0 involved transmission owners/operators, renewable energy developers, utilities and
other load serving entities, state and federal permitting agencies, tribal governments and
environmental and public interest organizations as well as state agencies and the CAISO.
The RETI 1.0 report informed transmission planning at the CAISO and the U.S. Department
of Interior through the Desert Renewable Energy Conservation Plan. Thirty competitive
renewable energy zones (CREZs) were identified with 80,000 MW of renewable potential
across the state.

1 Long-time CEERT colleagues David Olson and Rich Ferguson were deeply engaged in the planning process that resulted in the approval of
the TRTP project.

TRANSMISSION IN CALIFORNIA | 3
The CEC followed up with the RETI 2.0 report in 2017. The report examined multiple
resource portfolios and concluded that continued growth in solar generation would likely
lead to curtailment of solar production during high solar periods and could result in a
shortage of flexible capacity during the evening hours to meet net peak loads.

It recommended creating transmission access to low-cost wind and geothermal resources

both within and outside California that had complementary generation profiles. The report
examined transmission constraints in the San Joaquin Valley2, the Mojave Desert area3, the
Imperial Valley4, and the High Desert area north of the Lugo substation5. It also examined
the potential for increased imports across the California-Oregon intertie6.

2 The report concluded that if a large quantity of new generation could be geographically concentrated then it could be connected to the 500
kV system, which would offer lower cost and greater system benefits.
3 The Desert Area transmission constraint affects the deliverability of new renewable generations across a vast area that includes Victorville-
Barstow, Eastern Riverside County, and the Imperial Valley, as well as imports from the Eldorado hub in Nevada and the Palo Verde hub in
Arizona.
4 The report identified the Imperial Valley as a location where high voltage direct current (HVDC) might be an appropriate solution.
5 Generation development north of the Kramer substation (San Bernardino County) could result in
constraints between Kramer, Lugo, and Calcite substations.
6 The California-Oregon Intertie consists of three 500 kV transmission lines with a rate capacity of 4,800 MW. The report concluded there
was no capacity for new fully deliverable resources from the Pacific Northwest. However, scheduling coordination and dynamic line rating could
increase the utilization of existing capacity.

TRANSMISSION IN CALIFORNIA | 4
 3
SHARED
RESPONSIBILITY FOR
TRANSMISSION PLANNING
IN CALIFORNIA

As California’s renewable portfolio standard began implementation, the CAISO and the
CPUC recognized that the transmission planning process needed to be revised to achieve
the State’s legislative renewable energy targets, such as achieving 33 percent renewable
generation by 2020.7 To achieve that goal and maintain system reliability, the CAISO and
the CPUC adopted a memorandum of understanding (MOU) in 2010 regarding coordinated
transmission planning.

The CPUC and the CAISO agreed that beginning with the 2011-2012 transmission plan the
CAISO would review resource scenarios provided by the CPUC. The CAISO would then
provide the CPUC and other stakeholders with a formal assessment of the transmission
needs for the CPUC-provided resource scenarios. The final annual transmission plan would
identify specific transmission facilities, which would be categorized as Category 1 facilities,
that merited unconditional approval based on the concept of least regrets, and Category 2
facilities that may be needed depending on the course of future generation development.

Least regret (Category 1) transmission projects would be specified with sufficient detail to
allow eligible parties to submit competitive proposals to develop the projects that included
a detailed construction schedule and cost estimates. For Category 2 projects, parties were
encouraged to propose alternative solutions that would be evaluated in subsequent annual
transmission plans.

Least regret transmission projects that were identified by the CAISO in its annual
transmission plan would then proceed to the CPUC for review under the California
Environmental Quality Act (CEQA) and other permitting requirements and for issuance of a
Certificate of Public Convenience and Necessity (CPCN).

The purpose of the MOU was to clarify and streamline the planning and permitting
processes for necessary transmission. However, few policy-driven transmission projects
were approved since the 2010 MOU was adopted by the CPUC and the CAISO (see Table A1
in the appendix).

7 SB 100 now requires that California obtain at least 60% of its electricity requirements from qualified renewable energy resources by 2030.

TRANSMISSION IN CALIFORNIA | 5
To remedy that deficiency and to take account of the escalating need for new clean energy
resource development, the parties, now including the CEC, updated and amended the
2010 MOU in December 2022. The 2022 MOU recognizes the importance of the electricity
demand forecast that is regularly developed and updated by the CEC. The CEC is also
responsible for the development of long-term multi-decade forecasts to estimate the
impact of the state’s decarbonization goals under SB 100.

The new 2022 MOU also recognized that the CPUC will continue to develop forward-
looking resource portfolios that set the direction for procurement authorizations for load
serving entities regulated by the Commission.8 The MOU requires the CEC, CPUC, and the
CAISO to coordinate and implement a joint work plan during the CEC’s Integrated Energy
Policy Report proceedings. Importantly, the parties agree to use a single demand forecast
for both transmission planning and resource procurement.

The parties also agreed to work together on longer-term informational planning exercises
to provide the CPUC and the public with an assessment of transmission planning needs
over a longer time horizon. The CAISO in 2022 prepared a 20-Year Transmission Outlook
report which investigated long-term grid requirements and options for meeting the State’s
GHG reduction goals.

The CPUC will use transmission information from the CAISO to map its resource portfolios
to specific electrical locations (busbars) through a joint effort with the CEC and the CAISO.
Precise busbar mapping will enable improved transmission planning through power flow
analysis and other technical studies.

Importantly, the 2022 MOU commits the CPUC to giving substantial weight in its permitting
process to projects selected in the CAISO’s annual transmission plans. In other words, the
determination of need for transmission will rely on the studies, stakeholder processes, and
competitive solicitations administered by the CAISO.

The CAISO also agrees in the MOU to prioritize interconnection process activities to
support resources with the operational characteristics and geographic locations consistent
with the resource planning conducted by the CPUC and CEC.

8 SB 350 (de Leon – 2015) initiated a comprehensive Integrated Resource Planning process that, among other things, required the Commission
to set a greenhouse gas reduction target.

TRANSMISSION IN CALIFORNIA | 6
 4
CAISO 20-YEAR TRANSMISSION
OUTLOOK REPORT

In June 2022 the CAISO adopted and promulgated a 20-Year Transmission Outlook report
to support the CPUC’s Integrated Resource Planning process, the CEC’s Integrated Policy
Report and the joint agencies’ SB 100 planning efforts. The CAISO acknowledged in
initiating this report that resource requirements to meet state policy goals and reliability
needs will accelerate sharply over the next 10 years compared to the last five years.9 In
addition, the CAISO is anticipating that, in response to a proposed federal Proposed Notice
of Rulemaking, a longer-term planning horizon for transmission will be recognized as a best
practice.10

For the 20-Year Transmission Outlook Report the CAISO staff used a specific resource
portfolio developed by the CEC for its SB 100 analysis and then assumed natural gas power
plant retirements of 15,000 MW by 2040. This scenario was referred to as the Starting Point
Scenario. Table 1 (below) provides the resource assumptions in the 2021-2022 transmission
planning process for 2031 and the SB 100 Starting Point Scenario for 2040.

TABLE 1. Comparison of Resource Scenarios

2021-2022 TP BASE STARTING POINT

RESOURCE TYPE PORTFOLIO FOR 2031 (MW) SCENARIO FOR 2040 (MW)

Natural gas power plants 0 (15,000)

Battery energy storage 9,368 37,000

Long-duration storage 627 4,000

Utility-scale solar 13,044 53,212

In-state wind 1,918 2,237

Offshore wind 0 10,000

Out-of-state wind 2,087 12,000

Geothermal 651 2,332

9 The Base Case resource portfolio used in the 2022-2023 Transmission Plan assumes a buildout of 2,700 MW of renewable resources annually.
The new resource portfolio with a GHG goal of 30 MMT in 2030 and assumes high transportation electrification requires a buildout of 4,000 MW
per year.
10 FERC Docket No. RM21-17-000

TRANSMISSION IN CALIFORNIA | 7
The Starting Point Scenario identified 53,212 MW of utility-scale solar in 2040. In allocating
the utility scale solar to geographical locations, the Starting Point Scenario utilized
commercial interest together with environmental screens to determine where solar might
be suitably located. Table 2 lists geographical regions where 1,000 MW or more of solar
may be sited.

TABLE 2. Solar Resource Allocation by Region

RESOURCE LOCATION CAPACITY (MW)

Imperial Valley 6,407

North of Kramer 2,162

Kern County 6,154

Tehachapi (Whirlwind, Windhub) 9,544

Westlands (Central Valley) 12,655

East Riverside 4,922

Los Banos (Central Valley) 1,079

Tehachapi (Vincent, Moorpark) 2,066

Southern Nevada 2,024

Western Arizona 2,352

The CAISO power flow studies

specifically looked at transmission line
overloads from the Westlands and
Kern areas in the Central Valley to Bay
Area load centers assuming only 2,000
MW of available local gas generation
in the Bay Area. One reason for these
studies is the southern Central Valley
is an area where the SB 100 planning
effort and Starting Point Scenario
expect a significant build-out of solar
and storage resources, creating an
important new area for clean energy
resource development that must then
reach major load centers. Table 3
shows transmission elements that are
overloaded during normal operating
conditions in early afternoon summer
conditions.

TRANSMISSION IN CALIFORNIA | 8
TABLE 3. Peak Summer Overloads During Normal Operations

OVERLOADED ELEMENT BASE CASE OVERLOAD

Manning – Gates 500 kilovolt (kV) line 163%

Lugo 500/230 kV Transformer Banks #1 and #2 161%

Los Banos – Manning #1 and #2 500 kV lines 152%

Los Banos – Tesla 500 kV line 138%

Los Banos – Tracy 500 kV line 117%

Los Banos – Moss Landing 500 kV line 116%

Moss Landing – Las Aguilas 230 kV line 133%

Westley – Los Banos 230 kV line 119%

Panoche – Los Banos 230 kV line 119%

Collinsville – Pittsburg 230 kV line 116%

Lighthipe – Mesa 230 kV line 108%

For the Los Angeles Basin area, the CAISO analyzed electricity deliverability during evening
summer conditions after the sun has set. Electricity will mostly likely be supplied by battery
storage, wind generation, imported power and hydro units. Table 4 shows transmission
elements that are overloaded during these evening summer conditions.

TABLE 4. Net Peak Summer Overloads During Normal Operations

OVERLOADED ELEMENT BASE CASE OVERLOAD

Lighthipe – Mesa 230 kV line 128%

Serrano 500/230 kV Transmission Banks #1, #2 and #3 119%

North Gila – Imperial Valley 500 kV line 113%

Diablo – Gates 500 kV line 113%

Devers – Red Bluff 500 kV #1 and #2 lines 112%

Hassayampa – North Gila #2 500 kV lines 110%

Barre – Lewis 230 kV line 113%

Barre – Ellis #1, #2, #3 and #4 230 kV lines 105%

TRANSMISSION IN CALIFORNIA | 9
The CAISO also analyzed off-peak conditions for deliverability. Off-peak conditions are
in the middle of the day in the spring when demand is about 50% of the peak load and
generation from behind-the-meter solar generation is high. The study assumes that all
battery storage units (40 GW) are in charging mode. It is also assumed the CAISO system
is exporting 5 GW of energy to neighboring systems. Table 5 shows transmission elements
that are overloaded during these conditions.

TABLE 5. Off Peak Overloads During Normal Operations

OVERLOADED ELEMENT BASE CASE OVERLOAD

Lugo 500/230 kV Transformer Banks #1 and #2 155%

Table Mountain 500/230 kV Transformer Bank #1 126%

Gates – Mustang 230 kV #1 and #2 lines 115%

In addition to analyzing overloads during normal operating conditions, the CAISO also
analyzed overloads during N-1 contingencies and N-1-1 contingencies.

Based on its deliverability analysis, the CAISO identified specific transmission projects that
will be needed to integrate the resources in the SB 100 Starting Point Scenario. Table 6
identifies projects located within the existing CAISO footprint.

TRANSMISSION IN CALIFORNIA | 10
TABLE 6. Transmission Projects to Integrate Starting Point Scenario Resources

TRANSMISSION PROJECT DESCRIPTION

Eldorado – Lugo 500 kV line 180 miles of 500 kV line, series compensation in
various locations

Manning or new 500 kV substation Consistent with the 20-year transmission outlook
in Fresno County to Moss Landing or
Metcalf

Gates II to Vincent 500 kV line Consistent with the 20-year transmission outlook

Colorado River – Devers 500 kV line Devers to Red Bluff 500 kV line, Red Bluff to
Colorado River 500 kV line

North Gila – Imperial Valley 500 kV line 85 miles 500 kV line, series compensation

Westland 500/230 kV substation New 500/230 kV substation with two transformers,

50 miles of 500 kV line

2nd Los Banos to Tracy or to new 67 miles of 500 kV line

Manning or other new 500 kV substation
in Fresno County 500 kV line

3rd Collinsville – Pittsburg 230 kV line 230 kV cable

Manning – Moss Landing 500 kV line 78 miles of 500 kV line, new 500/230 kV substation
with two transformers

Devers – La Fresa HVDC 100 miles of DC cables, Two VSC converters

Lugo – LA Basin HVDC 80 miles of DC cables, Two VSC converters

Sycamore – Alberhill HVDC 82 miles of DC cables, Two VSC converters

Diablo – South HVDC 250 miles HVDC cables, 4 VSC converters

Diablo – North HVDC 200 miles HVDC cables, 4 VSC converters

Round Mountain 500/230 kV Add one 500/230 kV transformer

Transformer

Lugo 500/230 kV transformer Add one 500/230 kV transformer

Table 7 identifies transmission projects needed to integrate out-of-state wind resources

identified in the Starting Point Scenario.

TRANSMISSION IN CALIFORNIA | 11
TABLE 7. Transmission Projects to Integrate Out-of-State Wind

TRANSMISSION PROJECT DESCRIPTION

SWIP-North 275 mile 500 kV line from Midpoint to Robinson

with upgrade from Robinson to Harry Allen to
access Idaho wind

Cross-Tie 214 mile 500 kV line from Robinson to Mona/Clover

to access Wyoming wind

Robinson – Eldorado 500 kV line from Robinson to Eldorado

TransWest Express 732 mile system consisting of HVDC and 500 kV

facilities to access Wyoming wind

SunZia 530 mile HVDC line and 35 mile 500 kV line to

access New Mexico wind

Additional transmission for additional HVDC transmission line from the wind resource to
Wyoming/Idaho wind resources northern California (Tesla)

Additional transmission for additional HVDC transmission line from the wind resources to
New Mexico wind resources southern California (Lugo)

The CAISO has also done some initial scoping of transmission projects needed to integrate
10 GW of offshore wind. For the 2023-2024 TPP the CPUC is recommending that the
CAISO conduct a more detailed analysis of the transmission resources needed to integrate
13 GW of offshore wind.

The 20-Year Transmission Outlook was revelatory and much appreciated by stakeholders
involved in transmission planning. It clearly laid out options for meeting California’s GHG
reduction and renewable energy development goals in a reliable manner. It provides
clear longer-term context for the framing of transmission needs that should be further
elaborated in actionable CAISO transmission plans beginning with the 2022-2023
Transmission Plan.

TRANSMISSION IN CALIFORNIA | 12
 5
CAISO 2022-2023
TRANSMISSION PLAN

The CAISO’s 2022-2023 Transmission Plan is in the final stages of development with final
approval expected in May following another round of public review and comment. The
Plan examines the impact of two resource portfolios developed by the CPUC. First is the
preferred system portfolio with a GHG reduction target of 38 million metric tons (MMT) by
2030. It is the base case portfolio that will be used to recommend least regrets (Category
1) transmission projects. A second sensitivity portfolio with a 30 MMT GHG target by 2030
and with high electrification will also be analyzed to examine longer term needs through
2035. The sensitivity portfolio is expected to become the base case portfolio in the 2023-
2024 Transmission Plan. Table 8 compares the resource additions in the two portfolios.11

TABLE 8. Total Resource Additions in Transmission Planning Scenarios

RESOURCES (MW) BASE SCENARIO (2032) SENSITIVITY SCENARIO (2035)

Solar 11,271 33,640

Wind 5,778 12,301

Battery Storage 7,299 20,673

Long Duration Storage 1,000 2,000

Geothermal 1,119 1,746

Bio 129 129

Total 26,597 70,489

The difference in the amount of resources that needs to be developed in the two scenarios
is striking. Since the sensitivity scenario is expected to become the base scenario for the
subsequent transmission plan, many stakeholders have advised the CAISO to heavily
weigh the constraints arising in the sensitivity scenario in recommending “least regret”
transmission projects for development.

11 The resource additions use nameplate capacity. It is expected that many battery storage systems will be paired with renewable sources of
generation so that the megawatts at points of interconnection will be less than the sum of the resources.

TRANSMISSION IN CALIFORNIA | 13
At the November 17, 2022 stakeholder meeting, the CAISO staff provided preliminary
deliverability assessment results for three broad regions of the CAISO footprint: the SCE
area12, the SDG&E area, and the PG&E area. Transmission constraints under both scenarios
were identified for each of the areas as well as alternative transmission projects that
mitigated the constraints.

A. SCE AREA

The CAISO transmission deliverability studies for the SCE service area analyzed
deliverability in specific sections of the SCE service area as well as specific constraints
on key elements of their high voltage transmission system. The areas that are studied
include the SCE Metro Area, the North of Lugo Area (portions of San Bernardino and Kern
Counties), the SCE Eastern Area (Riverside County and parts of San Bernardino County),
and the SCE Northern Area (Ventura and a portion of the San Joaquin Valley). Key
transmission constraints that are analyzed are the Lugo-Victorville constraint and the Lugo-
Calcite constraint.

Three large-scale transmission projects emerge from the studies of the SCE area. The
first addresses overloads between the Red Bluff substation and the Devers substation
in Riverside County and between the Devers substation and the Mira Loma substation
in San Bernardino County. An additional 500 kV transmission line along this corridor
would mitigate deliverability constraints in both the base case scenario and the sensitivity
scenario and enable large amounts of solar and battery projects in the interconnection
queue to be developed. In addition, it will increase the import capability into California from
projects developed in Arizona and New Mexico (see Map X1 in the appendix for the location
of the 500 kV transmission line).

The second large-scale transmission project is intended to address the Lugo-Victorville

constraint which is driven by power coming through Nevada to the Lugo and Victorville
substations in San Bernardino County. The CAISO system overloads are parallel to
constraints that the Los Angeles Department of Water and Power (LADWP) faces on its
transmission system from the McCullough substation in Nevada to the Victorville substation
in San Bernardino County. The CAISO is analyzing three alternatives to mitigate the
constraint. One involves building a second 180-mile 500 kV line between the Eldorado
and Lugo substations along with series compensation for system stability. The other two
alternatives involve the construction of new 500 kV lines as well as new substations. It is
expected that the CAISO will recommend a preferred alternative in the final 2022-2023
transmission plan. A solution is needed to overcome this constraint to enable more power
to be imported from solar and battery projects in Southern Nevada and for wind imports
from Wyoming and/or Idaho. There are clear advantages of the CAISO working together
with LADWP to find a mutually beneficial solution that avoids excessive loop flow on

12 The CAISO includes within the SCE study area parts of Nevada served by Valley Electric Association and the Gridliance high voltage electric
system. The focus of this summary is on the SCE portion of the area.

TRANSMISSION IN CALIFORNIA | 14
either system13 (see Map X2 in the appendix for the locations of the transmission option
addressing the Lugo-Victorville constraint).

The third set of projects are in the SCE Metro area which includes portions of Los Angeles,
Riverside, and San Bernardino Counties. The CAISO has identified two alternative project
designs that consist of multiple elements. The proposed projects are intended to address
constraints identified from the base case. Many additional constraints show up in the
sensitivity portfolio that are not addressed. Common elements of the two alternatives are
an additional 500 kV underground cable between the Mesa and Mira Loma substations
and a new 500 kV line from the Mesa to Serrano substations. A third needed element
consists of building three 500/230 kV transformer banks at the Del Amo substation, and
then linking the Del Amo substation to the Mesa substation with two new 500 kV lines or
looping through the new Mesa-Serrano 500 kV line through the Del Amo substation (see
Map X3 in the appendix for the locations of the SCE Metro projects).

B. SDG&E AREA

Transmission project alternatives located in the San Diego area are to a certain extent
contingent on decisions made in the SCE Eastern Area. Also, the transmission solutions
chosen for the San Diego area will be influenced by the degree to which the CAISO
decides to be proactive and address the need for transmission for projects included in
the sensitivity scenario. Imperial County is one of the state’s premier locations for the
development of geothermal power. The sensitivity scenario assumes that 900 MW of
geothermal generation would be developed by 2035. It also assumes that 653 MW of solar
and 375 MW of battery storage would be developed in Imperial County. However, the lack
of transmission limits the delivery of power from the Imperial Valley to the San Diego urban
area and/or into the SCE area.

The CAISO identifies six alternative transmission project options for the San Diego area.
Two of the options are focused on upgrades to the 230 kV system serving urban San Diego
and the northern parts of San Diego County. Four of the options include a new 500 kV
line from the Imperial Valley (IV) substation across the coastal mountains to the Serrano
substation in Orange County. This new line is estimated to cost approximately $3.3 billion.
Three of the options with the new IV-Serrano 500 kV line also include a second 500 kV
line that would run between the North Gila substation at the Arizona border to the Imperial
Valley substation. This line would follow an existing transmission right of way. However, the
second North Gila to Imperial Valley 500 kV line is only needed in the sensitivity case and
would enable more imports from Arizona renewable projects (see Map X4 in the appendix
for the locations of the Imperial Valley to Serrano and North Gila to Imperial Valley 500 kV
projects).

13 LADWP presented to its Board on December 13, 2022 an update on its Strategic Transmission Plan (STP). See A2 in the appendix
for an excerpt from that presentation summarizing Stage 1 of the STP.

TRANSMISSION IN CALIFORNIA | 15
Clearly, additional transmission capacity is needed to better connect the resource rich
Imperial Valley to San Diego and to the greater Southern California region. It is expected
that further refinement of Imperial Valley transmission options will be made for the final
2022-2023 Transmission Plan. SDG&E noted in their December comments on the draft
plan that the options under consideration provide multiple benefits including 1) addressing
existing and future reliability issues, 2) reducing local capacity requirements in the San
Diego area, 3) enabling the deliverability of future policy-driven projects, and 4) lessening
dependence on Aliso Canyon gas storage.

C. PG&E AREA

The PG&E area includes the locations where offshore wind projects would land for delivery
to the state’s load centers. The transmission needs for offshore wind will be examined in
more detail with the sensitivity scenario in the 2023-2024 Transmission Planning Process.
The focus of this report is on the transmission needed to enable the development of solar
and battery projects in the South Area (Southern Central Valley) of PG&E’s territory.

The South PG&E area includes Fresno and Kings Counties and parts of Tulare and Kern
counties. There is a dramatic difference between the CPUC base case scenario and the
sensitivity scenario as to the quantity of solar and battery storage that is forecasted for
development in this area. Table 9 compares the resources included in the two scenarios.

TABLE 9. Comparison of Resource Portfolios in the South PG&E Area

RESOURCE (MW) BASE SCENARIO (2032) SENSITIVITY SCENARIO (2035)

Solar 1,817 9,989

Battery Storage 1,107 5,556

Total 2,924 15,545

As might be expected, given the difference in the magnitude of the resources added in
the sensitivity scenario, most constraints show up in the sensitivity case. The constraints
that do show up in the base case are in very local parts of PG&E’s 70 kV and 115 kV system.
To mitigate the need for reconductoring lower voltage lines, the CAISO recommends
that generators be re-mapped to higher voltage points of interconnection (230 kV).
Many transmission constraints show up in the analysis of off-peak conditions since solar
generation in this area cannot be fully absorbed by nearby load. As mitigation, the CAISO
recommends that additional batteries be located in the South Area and operated in
charging mode during light-load conditions.

CEERT is concerned about the divergence between the base case scenario being used
in the 2022-2023 Transmission Plan and the 20-Year Transmission Outlook Starting Point
scenario, which identified over 20 GW of solar being developed in the San Joaquin Valley

TRANSMISSION IN CALIFORNIA | 16
near the Los Banos, Manning, and Gates substations. Most of these projects would be
expected to be paired with battery storage.14 At a minimum, the CAISO should use the
results of the sensitivity portfolio in the 2022-2023 portfolio for the South PG&E area. In
the future the CAISO needs to re-examine the need for a new Westlands substation that
was identified as a needed transmission project in the 20-Year Transmission Outlook report.

The CAISO should also examine the opportunity to cost-effectively reconductor or convert
to HVDC portions of Paths 15 and 26 to enable the delivery of even larger amounts of clean
energy from the Central Valley to the Bay Area and Southern California.

D. SPECIAL STUDY FOR REDUCED RELIANCE ON ALISO CANYON

As part of the 2022-2023 Transmission Plan, the CAISO conducted a local reliability
assessment for the LA Basin and San Diego-Imperial Valley areas, assuming Aliso Canyon
gas storage was not available for approximately 3,700 MW of gas-fired generation.15 The
study identified 25 transmission facilities that would be impacted by the curtailment of the
3,700 MW from gas-fired power plants in the SCE and SDG&E areas. To mitigate the impact
on these facilities the CAISO developed 13 alternative transmission scenarios. The CAISO’s
analysis of the effectiveness of the scenarios narrowed down the options to three.

Each of the three options included as an anchoring element a High Voltage Direct Current
(Diablo South HVDC) subsea cable that ran from Diablo Canyon to two terminals in the
greater Los Angeles region. The options also include various upgrades in the SCE and
SDG&E areas, including the North Gila to Imperial Valley #2 500 kV line. By adding the
delivery of energy from the north into the Los Angeles basin, the Diablo South HVDC cable
also provides relief for Path 26 under contingency conditions.

While the addition of Diablo South HVDC cable may not allow for the immediate closure
of the Aliso Canyon gas storage facility it would significantly decrease the use of fossil
generation in the LA Basin and increase system reliability by providing an alternative path
to Southern California from Path 26. For these reasons, CEERT strongly recommends that
the CAISO include a Diablo South HVDC cable as a least regrets transmission project (see
Map X5 in the appendix for the recommended Diablo South HVDC subsea cable).

14 Vistra, in its December comments on the 2022-2023 Transmission Plan, noted that it intended to develop an additional 350 MW of battery
storage at Moss Landing and that it expected the charging requirements to drive the need for additional transmission from the Central Valley to
Moss Landing.
15 The CPUC is studying the possible retirement of the Aliso Canyon facility as part of I.17-02-002.

TRANSMISSION IN CALIFORNIA | 17
 6
SENATE BILL
877 REQUIREMENTS

During the 2022 legislative session, the Legislature enacted and the Governor signed
Senate Bill 877. This legislation requires the CPUC to request the CAISO to identify the
highest priority transmission facilities needed to deliver renewable energy or zero-carbon
energy from projects that are expected to be developed by 2035 to load pockets that
currently require the operation of local fossil fuel power plants.

The objective of SB 887 was to encourage the CAISO to consider approval of high priority
transmission projects in its 2022-2023 transmission planning process. The law required the
CPUC to transmit this expectation to the CAISO by January 15, 2023. CPUC President Alice
Reynolds sent a letter setting forth the requirements of SB 887 to CAISO President and
CEO Elliot Mainzer on January 13, 2023.

TRANSMISSION IN CALIFORNIA | 18
One of the purposes of this transmission report is to highlight specific high priority
transmission projects that were initially identified in the CAISO 20-Year Outlook and in the
draft 2022-2023 Transmission Plan. CEERT considers the following transmission projects to
be the highest priority projects that will enable the development of renewable and zero-
carbon energy that can be delivered to areas of the state that currently rely on locally sited
fossil fuel generation:

1. A third 500 kV transmission line is needed that extends from the Red Bluff
Substation in Eastern Riverside County through the Devers substation near Palm
Springs to the Mira Loma substation in San Bernardino County. This transmission
project will enable new solar and battery projects developed in Riverside County
and Western Arizona as well as wind generation developed in New Mexico to
be delivered into the Southern California region and lessen the use of fossil fuel
generation in load pockets in the SCE and SDG&E areas.
2. A third underground 500 kV cable is needed in the SCE Metro area that will run
from the Mira Loma substation to the Mesa substation as well as a new 500 kV
transmission line that will run from the Mesa substation to the Serrano substation.
In addition, three new 500/230 kV transformer banks will be needed at the Del
Amo substation. The Del Amo and Mesa substations will need to be linked together
either by two new 500 kV lines or by looping the new Mesa-Serrano 500 kV line
through the Del Amo substation. These transmission lines will relieve significant
constraints in the greater Los Angeles region and enable the delivery of renewable
and zero-carbon energy from the east.
3. Significant 500 kV infrastructure is needed (transmission, series compensation
and possibly a new substation) between Southern Nevada and the Hesperia
area in San Bernardino County to overcome the Lugo-Victorville constraint. One
alternative would be the construction of a new 180-mile 500 kV transmission line
from the Eldorado substation in Southern Nevada to the Lugo substation near
Hesperia. Two alternative projects have also been proposed in the draft 2022-
2023 transmission plan that included new 500 kV substations. LADWP also has
high voltage transmission lines in this area which extend from the McCullough
substation in Southern Nevada to the Victorville substation in San Bernardino
County. CEERT believes that a cooperative project between the two balancing
authorities could result in a more optimal solution for ratepayers in Southern
California. A transmission solution that overcomes the Lugo-Victorville constraint
will enable substantial wind, solar/battery and geothermal energy to be imported
from neighboring states including Nevada, Idaho and Wyoming.
4. New transmission is needed in Imperial County to enable the development of
geothermal potential in the region near the Salton Sea and to advance solar and
battery development in Imperial County and Western Arizona. One project that
has been identified, the second 500 kV line from the North Gila substation in
Arizona to the Imperial Valley substation west of El Centro will partially improve
the deliverability of these resources and lessen the need for fossil fuel resources
in the SCE and SDG&E areas. An additional 500 kV or HVDC line is needed that

TRANSMISSION IN CALIFORNIA | 19
 will strengthen the link between the transmission system running through Imperial
County and the electric grid to the north. The CAISO has identified a 500 kV line
that would link the Imperial Valley substation to the Serrano substation in Orange
County. Other alternatives need to be examined.
5. One of the major constraints to the development of new cost-effective renewable
generation that can be used in both the northern and southern parts of the state
is Path 26, which runs from the Midway substation in Kern County to the Vincent
substation in Los Angeles County. A new transmission pathway between the
north and the south would greatly improve system reliability and the economic
performance of the grid. The most obvious solution that has been put forward is
a subsea HVDC cable between the Diablo Canyon substation and the greater Los
Angeles area. Various options for what are called the Diablo South HVDC cable
were highlighted in CAISO’s 20-Year Outlook report. That report identified several
potential terminals in Southern California where the cable could land. CEERT
believes that the CAISO and LADWP should work together to optimize the value
of a new link between Diablo and Los Angeles that could add 2000 MW or more
of transfer capability. An HVDC cable would go a long way to reducing Southern
California’s dependence on fossil generation and the Aliso Canyon gas storage
facility. It could also serve as a pathway for future offshore wind development.
6. The lower Central Valley from Merced County in the north to Kern County in the
south has the potential for the development of 30 GW or more of solar and battery
projects. Projects in the Central Valley have the potential to deliver energy north
into the Bay Area or south to the Los Angeles Basin based on the growing needs of
both regions. Path 15 is the major backbone transmission system linking Northern
and Southern California. There are four major substations in the lower Central Valley
– Los Banos, Manning, Gates, and Midway. A fifth substation is needed between
the Gates and Midway substations to enable the interconnection of significant
new clean energy capacity. In addition, the Path 15 transmission lines will need to
be upgraded to enable the delivery of that energy to load centers. One possibility
is the conversion of one or more of the existing lines to an HVDC line. This is a
solution that the CAISO should study in its 2023-2024 transmission planning
process. In addition, there is a need in the Central Valley to upgrade the aging and
weak 115 kV and 70 kV power lines.

TRANSMISSION IN CALIFORNIA | 20
 7
CAISO
INTERCONNECTION
QUEUE MANAGEMENT
REFORM

Transmission planning is closely related to the interconnection process for new generators.
For renewable energy projects to be financed, they need to have a clear line of sight of
when they can be connected to the grid and whether the power they produce can be
reliably delivered to customers. The CAISO’s interconnection process has recently slowed
in part because of the lack of available transmission capacity for new generators to reliably
deliver power to load centers. As transmission has become scarcer, there has also been an
enormous increase in the number of interconnection applications, particularly for battery
storage projects.

The CAISO interconnection process was overwhelmed by the Cluster 14 cycle, which saw
a near tripling in the number of interconnection applications submitted by the April 2021
deadline. The CAISO responded to this flood of new interconnection applications by
obtaining permission from FERC to delay the completion of the necessary interconnection
technical studies for a year. Also, the timing of the Cluster 15 application process was
delayed for a year.

An interconnection request includes several components: the selection by the developer

of a specific point of interconnection, the determination by the CAISO whether there
is sufficient transmission capacity to deliver power reliably from that location, and the
construction of network upgrades by the transmission owner to assure energy deliverability.

Interconnection customers request a deliverability designation when they submit their

interconnection applications. The choices are Full Capacity Deliverability Status (FCDS),
Partial Capacity Deliverability Status (PCDS), or Energy Only (EO).

Interconnection customers are awarded FCDS or PCDS status to the extent that
deliverability is available on the transmission system. Clarity in determining deliverability
allocation is critically important to developers. Being designated FCDS or PCDS means that
the grid can deliver a specific amount of capacity to the grid under peak load conditions.
An EO designation, on the other hand, means that the generator’s delivered output is
subject to grid conditions.

TRANSMISSION IN CALIFORNIA | 21
Deliverability designations are key
to supplying Resource Adequacy
in California. An FCDS or PCDS
designation qualifies the generator’s
output to count towards a load
serving entity’s resource adequacy
requirement.

FCDS and PCDS generators are

responsible for the financing costs
of constructing Delivery Network
Upgrades. These are upgrades
designed to relieve transmission
constraints. An EO designation means
that the interconnection customer will
not be responsible for deliverability
upgrades. It also means the resource
will be ineligible to count towards
resource adequacy.

In the future, the CAISO will

allocate deliverability to proposed
generators in areas based on project
development criteria. The CAISO will
allocate deliverability in the following
order: (A) to interconnection
customers that have executed power
purchase agreements and to load
serving entities that are developing
projects to serve their own load; (B)
to interconnection customers that
are on an active short list to receive
a power purchase agreement; (C) to
interconnection customers that have
achieved Commercial Operation for
the capacity seeking deliverability
but have not executed a power
purchase agreement; and (D) to other
interconnection customers.

Once an interconnection customer

has a deliverability allocation, it
must make commercial progress
in order to retain the allocation.
Shortlisted interconnection customers

TRANSMISSION IN CALIFORNIA | 22
must execute a power purchase agreement, and interconnection customers that are not
shortlisted must ultimately execute a power purchase agreement. In the future, the CAISO
intends to be more aggressive in terminating interconnection agreements that do not meet
project milestones.

While interconnection customers provide the initial financing for local delivery network
upgrades, they eventually are reimbursed with the accumulative costs going to ratepayers
that use the transmission system.

Ultimately, the purpose of deliverability assignment is to allocate deliverability to projects

that will provide energy to the grid during stressed conditions. Since incremental
deliverability on the transmission system is severely limited, it is important that delivery
network upgrades be used to meet procurement portfolios provided by load serving
entities. However, given the strong demand for deliverability by new generators, there
is little risk that network upgrades that are built will not eventually be used to meet
customer load. The strong demand and limited supply indicates the necessity of new,
upsized transmission facilities to increase deliverability across the system and facilitate the
interconnection of new deliverable resources.

The CAISO’s initial proposed changes to improve the interconnection process have merit
but will need to undergo further stakeholder discussion. However, interconnection reform
alone is not sufficient to ensure that the electric system will be ready to deliver the vast
amount of renewable and zero-carbon energy required to meet California’s climate and
clean energy goals. The CAISO has recognized that the transmission planning process, and
especially the development of policy-driven transmission, will need to accelerate and be
more closely coordinated with the interconnection process and the procurement plans of
load serving entities.

Given the long-lead times required for developing new transmission projects, planning
for new transmission will need to be initiated well in advance of procurement of the clean
energy projects that will eventually use the lines to deliver renewable and zero-carbon
energy to customers. And with CAISO’s desire to enhance the relationship of transmission
planning with generator interconnection, part of the goal of proactive transmission
planning should be to value the locations in which the transmission will guide future
resource development (especially for solar development that involves a lot of acreage and
nameplate capacity).

TRANSMISSION IN CALIFORNIA | 23
 8
RECONDUCTORING
OF EXISTING
TRANSMISSION
CORRIDORS

Developing new transmission can take over ten years to plan, permit, construct, and
commission. Longer distance interstate lines frequently take more than 15 years to
complete. California’s goal of reducing GHG emissions in the electric system to 30 MMT by
2030 will require substantial improvements in the schedules for siting and building high-
voltage transmission. Making this goal more challenging, most new transmission corridors
often face aesthetic and environmental opposition from members of the public.

An alternative to building new high-voltage power lines is to reconductor existing

transmission lines. Wires with higher ampacity can increase the carrying capacity of an
alternating current (AC) transmission line by up to 50 percent. However, there are new
alternative reconductoring approaches which can further increase the amount of energy
that can be safely and reliably delivered.

According to researchers at the Lawrence Berkeley National Laboratory (LBNL), high

voltage direct current (HVDC) conversion is becoming cost competitive for shorter
distance transmission lines.16 Historically, HVDC lines have been built over long distances or
used for subsea electric transmission.

One of the first HVDC lines developed in the United States was the Pacific DC Intertie
(Path 65), which transmits power from the Pacific Northwest to Los Angeles. The line’s
capacity is 3.1 GW and represents a significant portion of the peak capacity needed by
the Los Angeles Department of Water and Power. The project was completed in 1970
after concerns expressed by investor-owned electric utilities concerns were overcome.17
Another important California HVDC line was installed in 2010, that connected San Francisco
to a substation in Pittsburg across the San Francisco Bay. The Trans Bay Cable improved
reliability by allowing two-way power flows in the Bay Area and allowing the retirement of
two older fossil fuel power plants in San Francisco.

16 Earlier research indicated that DC lines less than 200 miles were not economic compared to AC lines.
17 The Pacific DC Intertie was approved in 1961 by the Bonneville Power Administration. Technical objections were resolved at a 1963 meeting of
the Institute of Electrical and Electronics Engineers.

TRANSMISSION IN CALIFORNIA | 24
A major advantage of DC lines over AC lines is that DC current penetrates the entire
conductor and allows for more power to be transmitted for the same size conductor. HVDC
lines can also help stabilize the power grid from cascading blackouts since the overhead
power flow is controllable. Converter stations are located at each end of the DC line, one to
convert AC power to DC and the other to convert DC power to AC. The Pacific DC Intertie
uses line-commuted converters, while the Trans Bay cable uses more modern voltage-
sourced converters (VSC).

An advantage of HVDC conversion is that it can use existing towers and conductors.
LBNL researchers estimate that HVDC conversion using existing lines can increase the
total power in a transmission corridor by as much as 3.5 times. High voltage AC conversion
to HVDC has not yet been widely considered by transmission planners. As a result, the
potential economic advantages of conversion are not well understood.

An even greater opportunity to increase transmission capacity could result from

combining HVDC conversion with an upgrade of the electrical conductor to ACSS or ACCR
conductors. According to the LBNL researchers, this option has not been studied. They
believe that the combination of DC conversion with an upgrade of the conductors could
result in as much as an 8-fold increase in transmission line carrying capacity with only
minor modifications to existing support structures.

Given the multiple challenges to developing new transmission lines, there appears to be a
significant opportunity to use existing rights of way for cost effective reconductoring with
either AC or DC technology.

The projects that have been identified above in this report might be good candidates for
an economic analysis of reconductoring options. CEERT encourages the CAISO to take this
opportunity into consideration, both in the current 2022-2023 Transmission Plan and in the
subsequent 2023-2024 Transmission Plan (see Map X6 in the appendix for reconductoring
opportunities).

TRANSMISSION IN CALIFORNIA | 25
 9
CPUC
TRANSMISSION
PERMITTING
REFORM

Once the CAISO determines that a transmission

project is needed, the selected project developer
is then required to obtain a Certificate of Public
Convenience and Necessity (CPCN) or a Permit
to Construct (PTC) from the CPUC under Public
Utilities Code sections 1001 and 1002.18

According to the code, the CPUC is required

to give consideration to 1) community values,
2) recreation and park areas, 3) historical
and aesthetic values and 4) influence on the
environment. Influence on the environment has
been interpreted to require compliance with the
California Environmental Quality Act (CEQA).

To meet these statutory requirements, a

transmission developer, be it a regulated
utility or a third-party developer, must submit
a Proponents Environmental Assessment
(PEA) and either an application for a CPCN,
which applies to transmission lines above 200
kV, or a PTC, which applies to transmission
projects between 50 kV and 200 kV and for
any substation above 50 kV. The environmental
review and the CPCN review by the CPUC
happen concurrently.

18 Public Utilities Section 1001 states “No railroad corporation whose

railroad is operated primarily by electric energy, street railroad corporation,
gas corporation, electrical corporation, telegraph corporation, telephone
corporation, water corporation, or sewer system corporation shall begin
the construction of a street railroad, or of a line, plant, or system, or of any
extension thereof, without having first obtained from the commission a
certificate that the present or future public convenience and necessity require
or will require such construction.”

TRANSMISSION IN CALIFORNIA | 26
The CPUC’s review process is set forth in CPUC General Order 131-D. The CPUC analyzes
the need for the project and the economics of the project, in addition to the environmental
impact. The CPUC’s “needs determination” is on top of the CAISO’s determination of need.

Both the CPCN and PTC processes are subject to a public hearing, should a member of
the public submit a protest within 30 days of the application’s filing. The protest process is
led by an Administrative Law Judge (ALJ) and consists of a series of conferences and/or
hearings, similar to a court case.

Once the CPUC reviews are complete, the ALJ submits a proposed decision to the
Commission. The Commissioners will then vote to approve permits for the project at a
meeting of the full Commission.

The Clean Air Task Force (CATF), a public interest non-profit organization, recently
analyzed the timelines of thirteen transmission projects approved in CAISO Transmission
Plans between 2012 and 2019.19 Of the thirteen projects reviewed, two projects were
completed but experienced considerable delays, two projects were canceled or put on
hold by the CAISO, eight projects had yet to be completed and were delayed past their
anticipated online date, and one project is yet to be completed but is still on track to be
constructed on time.

The CATF noted the following trends in transmission permitting: 1) the CAISO’s competitive
solicitation process is regularly completed within one year and is the only phase of project
development that is consistent in duration, 2) delays are particularly acute during the
period needed for the developer to prepare a project application for the CPUC and during
the CPUC environmental review process.20 Of the ones reviewed, projects developed by an
incumbent transmission owner took much more time to submit applications to the CPUC
than those developed by a third party or jointly developed by the incumbent transmission
owner and a third party.

The CATF concluded that the permitting status quo is unsuited to the scale of transmission
expansion needed to meet California’s climate goals. They recommended that the
transmission permitting process be accelerated. They observed that the need for major
transmission projects is currently reviewed twice and recommended consolidating the
review into a single process at the CAISO. They also recommend that the State Legislature
consider streamlining the permitting process as was done for non-fossil power plants in AB
205.

AB 205, which was enacted into law in 2022, established a new certification process for
solar photovoltaic, terrestrial wind, geothermal and other non-fossil power plants with a
generating capacity of 50 MW or more, for energy storage systems capable of storing
200 megawatt hours or more of electricity, and for transmission lines from those facilities

19 Clean Air Task Force (CATF) and Environmental Defense Fund (EDF), “Growing the Grid: A Plan to Accelerate California’s Clean Energy
Transition”, October 2022. https://www.catf.us/resource/growing-grid-plan-accelerate-californias-clean-energy-transition/
20 It took between one to six years for incumbent utility transmission owners to submit CPCN or PTC applications and PEAs to the CPUC.
Environmental reviews lasted between 16 months and four years.

TRANSMISSION IN CALIFORNIA | 27
to a point of connection with an electrical transmission system. The law requires the CEC
to review the project application and to determine whether to issue certification within
a specified time period. The law designates the CEC as the lead agency for purposes of
CEQA review for these projects.

AB 205 permits the CEC to certify a project as a leadership project under the Jobs
and Economic Improvement Through Environmental Leadership Act of 2021. The law
requires the State Judicial Council, the policymaking body of the California courts, to
establish procedures that require actions or proceedings related to the certification of an
environmental impact report or the issuance of the certification for a designated facility be
resolved within 270 days.

CEERT recommends that the Legislature consider extending the provisions of AB 205 to
transmission projects of over 200 kV that are determined to be needed by the CAISO to
meet California’s GHG reduction and clean energy goals. Two recent bills seek to streamline
the transmission permitting process in California: SB 619 (Padilla)21 and SB 420 (Becker)22.

21 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB619
22 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB420

TRANSMISSION IN CALIFORNIA | 28
 10
TRANSMISSION
PROJECT
IMPLEMENTATION
CHALLENGES

Once transmission projects have been permitted, they need to be built. While recently
large transmission projects have been competitively bid and development awarded to
independent transmission developers, the majority of projects that are currently under
construction, particularly those identified in the interconnection study process, are the
responsibility of incumbent utility transmission owners, i.e. PG&E, SCE, and SDG&E in
California, and Valley Electric Association in Nevada.

With the increasing quantities of renewable energy projects being developed in California,
renewable energy developers have expressed a need for more transparency in tracking
the progress of utility transmission projects. Better visibility regarding their completion
timelines is required so that new clean energy generation projects can be brought online in
a timely manner and power reliability delivered to load.

In response to the need for improved visibility, the CAISO, at the beginning of 2022,
established a quarterly Transmission Development Forum. Its purpose was to create a
single forum to track the status of transmission network upgrade projects that affect
generators as well as all other transmission projects approved in the CAISO’s transmission
planning process.

The Forum tracks projects approved through the CAISO transmission planning process
and network upgrades identified in the generator interconnection process. Each
utility provides a workbook that includes approved transmission projects and network
upgrades. The status of projects in the workbooks are updated on a quarterly basis. Five
Transmission Development Forums have been held since the inception in January 2022.
Project developer participants have found them to be helpful and have offered comments
suggesting how they can be improved.

A reoccurring theme among stakeholders over the past year has been concern about
delays by PG&E in their management of transmission projects and network upgrades. For
instance, battery storage developer, Broad Reach Power has noted that in PG&E’s most
recent presentation regarding 14 transmission projects, two showed a modest schedule

TRANSMISSION IN CALIFORNIA | 29
improvement, three showed an in-service delay of 3 or more months, and nine projects
showed a delay of 6 or more months. Likewise, for generation interconnection network
upgrades, PG&E lists 42 projects in its workbook. In the Broad Reach Power notes, PG&E
has only provided information on 23 projects during the five meetings with 7 projects
showing a schedule improvement and 16 showing a delay in the project’s In-Service Date.
The average delay is 18 months.

Broad Reach Power states that PG&E’s performance in constructing network upgrades
has gotten demonstrably worse over the past year and the utility has not offered a plan to
get back on course. Broad Reach Power recommended that the CAISO take the following
actions to remedy PG&E’s performance:

1. Report to FERC and the CPUC specific information on transmission network

upgrade delays. They recommend that delays measured from the in-service
date be included in Phase 2 interconnection studies or in executed generation
interconnection agreements.
2. Take enforcement actions when a transmission owner fails to meet reasonable
performance standards in completing transmission project upgrades.
3. Allow third parties to complete network upgrades when it is demonstrated that a
transmission owner cannot perform in a timely manner.

Westlands Solar Park (WSP) reports that they are constructing several solar and storage
projects in the Central Valley that are to become operational in Q3 of 2023 and Q1 of
2024. They have indicated they are concerned that these projects could be detrimentally
impacted by delays in PG&E’s transmission network upgrade work. WSP has provided
written comments to the CAISO that it needs more timely information from PG&E on
reliability network upgrades in order to plan for near-term work to make the project ready
for interconnection.

WSP has emphasized to the CAISO that renewable project developers need to closely
coordinate their project construction schedules with the schedules for reliability network
upgrades. They informed the CAISO that while the Transmission Development Forum has
benefits, more timely information is needed from PG&E on delays than quarterly forums.

The CPUC Public Advocates Office (Cal Advocates) has also taken notice of PG&E’s
deteriorating performance, siting a massive backload of 83 CAISO approved transmission
projects. Cal Advocates has asked the CAISO to re-evaluate the need for PG&E’s 13 severely
delayed projects that were approved prior to the 2011 TPP. They also have recommended
that the CAISO consider market alternatives within the context of its tariff to help remedy
PG&E’s challenges in the timely completion of necessary transmission projects.

CEERT believes that a more comprehensive review of PG&E’s performance is needed that
looks at all of PG&E’s approved but not yet built transmission and interconnection projects.
The Legislature should consider convening a special hearing on the impact of delays in
transmission construction in meeting the state’s climate and clean energy goals.

TRANSMISSION IN CALIFORNIA | 30
 11
TRANSMISSION
FINANCING OPTIONS

The CAISO estimated in its 20-Year Transmission Outlook report that approximately $30
billion will need to be invested in new transmission over the next two decades to meet
California’s GHG targets. While this estimate represents a significant level of investment, it
is reasonable given the magnitude of the transition to a decarbonized economy. It is also
worth noting that transmission projects have a useful operating life of 60 to 80 years. It is
vitally important that large-scale transmission projects be implemented in as cost-effective
a manner as possible to manage ratepayer impacts.

California investor-owned utilities have credit ratings that range from moderate to poor.
According to Fitch, the SDG&E credit rating is BBB+ and SCE’s is BBB-, which indicates
a moderate level of default risk and is considered investment grade. PG&E, on the other
hand, has a BB credit rating, which indicates an elevated level of default risk. California’s
public power agencies generally have a better credit rating, as does the State of
California.23

CEERT recommends that policymakers should consider providing financial support or

credit enhancement for transmission projects that have been identified as being necessary
to meet California’s public policy objectives. Alternative sources of funding could include
the State General Fund, the Greenhouse Gas Reduction Fund, or state financing24, as well
as support from multiple federal programs (see Table A4 in the appendix for DOE funding
programs).

23 SMUD’s Fitch credit rating is AA and LADWP Fitch credit rating is AA-. The State of California’s credit rating is AA.
24 The California Infrastructure and Economic Development Bank (IBank) was created to finance infrastructure that promotes jobs and
improves the quality of life in California communities. IBank has the authority to issue tax-exempt and taxable revenue bonds, and provide credit
enhancements.

TRANSMISSION IN CALIFORNIA | 31
 12
SUMMARY OF
FINDINGS AND
RECOMMENDATIONS

A. FINDINGS

1. California’s aging electric transmission system was built to bring energy from fossil
fuel, nuclear, and hydroelectric projects to load centers where energy is used.
2. Clean energy technologies have rapidly declined in cost to the point where new
projects are competitive with existing fossil fuel plants.
3. New transmission is needed to unlock the potential for the large-scale development
of clean energy technologies. And as CAISO pushes transmission planning to
be more proactive, it is critical that transmission planning consider the land
implications of the clean energy resources they are unlocking (especially for solar).
4. California has examples of successfully planning for and developing large-scale
policy-driven transmission projects in the past (eg., Tehachapi).
5. Transmission planning and development in California have not kept pace over the
past decade. The modest transmission that has been approved has developed
slowly, and there have not been large-scale policy-driven transmission and
generation projects that have been jointly planned since the Tehachapi Regional
Transmission Project.
6. Developing new transmission projects is a shared responsibility among the CPUC,
CEC, CAISO, transmission owners and developers, and the public.
7. The most recent update to a Memorandum of Understanding between the CPUC,
CEC, and CAISO offers an effective framework for transmission planning.
8. The CAISO 20-Year Transmission Outlook report was an informative and
comprehensive look at longer term transmission needs through 2040. It identified
14 in-state transmission projects which would integrate high levels of clean energy
and allow for the retirement of a portion of the state’s fossil fuel power plants.
However, CAISO’s development of the 20-Year Transmission Outlook did not
directly trigger transmission project approval.
9. The CAISO 2022-2023 Transmission Plan could be the document that identifies
least regrets transmission projects that need to be developed to meet the resource
scenarios developed by the CPUC, if strong consideration is given to the sensitivity
portfolio.

TRANSMISSION IN CALIFORNIA | 32
 10. The CAISO 2022-2023 Transmission Plan should identify significant transmission
constraints in the SCE, SDG&E, and PG&E areas.
11. Three key constraints in the SCE area show up in the SCE Metro area, the North of
Lugo area (parts of San Bernardino and Kern Counties), and the SCE Eastern area
(Riverside County and part of San Bernardino County).
12. The major constraints in the SDG&E area are in delivering power from the Imperial
Valley into urban San Diego and north to the SCE service area.
13. For the PG&E area, major transmission constraints are observed in the South Area
where significant solar and storage development is expected, particularly under the
CPUC sensitivity scenarios.
14. The special study for reduced reliance on Aliso Canyon gas storage facility
suggested several options, all of which included an HVDC subsea cable between
Diablo Canyon and the Los Angeles basin.
15. Senate Bill 877 requires the CPUC to request the CAISO to identify the highest
priority transmission facilities that are needed to deliver clean energy from projects
expected to be built by 2035.
16. The CAISO has proposed interconnection queue management reform that will
prioritize reliability and deliverability network upgrades for projects committed to
load serving entities. However, interconnection reform is not sufficient to accelerate
the quantity of clean energy projects required by California’s Integrated Resource
Planning process and the joint agency SB 100 planning process.
17. Reconductoring of existing transmission corridors with high voltage direct current
technology has considerable promise but has not been widely studied.
18. California’s transmission permitting process has not kept pace with the need for
new transmission projects. Permitting reform is urgently needed.
19. PG&E has experienced recent challenges in making progress on necessary
transmission projects and network upgrades that are required to timely
interconnect clean energy projects to the grid.
20. The CAISO has estimated that approximately $30 billion will need to be invested in
larger transmission projects to meet California’s decarbonization goals.

B. RECOMMENDATIONS

1. The California state government needs to adopt a unified approach to prioritize

transmission development to meet the state’s decarbonization goals.
2. The CAISO should be the lead agency on transmission need determination, which
should drive the necessary permitting and development processes.
3. A longer-term planning horizon (20 years) is needed for resource planning by state
agencies and by the CAISO for the development of needed transmission projects.

TRANSMISSION IN CALIFORNIA | 33
4. The CAISO should continue to update its 20-Year Transmission Outlook as a regular
process.
5. The CAISO should give substantial weight to the 30 MMT Resource Portfolio in
determining which policy-driven transmission projects will be included in the 2022-
2023 Transmission Plan.
6. Priority for transmission development should be given to the following areas:
1) Eastern Riverside Area (Red Bluff to Devers to Mira Loma)
2) North of Lugo Area from Nevada to Hesperia, through cooperative efforts of the
CAISO, SCE and LADWP
3) SCE Metro Area 500 kV system improvements (lines and transformers)
4) Imperial Valley Area including upgrades to improve power deliverability to urban
San Diego and SCE facilities in the north
5) A HVDC cable connecting Northern California resources at the Diablo substation
to the Los Angeles Basin
6) Major transmission capacity expansion along Path 15 from the Tesla/Tracy
substations to Midway in order to accommodate at least 30 GW of new clean
energy in the Central Valley.
7. Policymakers should recognize that while changes to the CAISO interconnection
process are necessary, they are not sufficient to rapidly improve transmission
capacity needed to meet California’s decarbonization goals. Transmission
expansion as part of a comprehensive look at commercial interest can ease the
interconnection process going forward.
8. State support should be provided to study the potential to use HVDC technologies
for upgrading transmission carrying capacity in the Central Valley along Path 15.
9. CPUC transmission permitting reform is urgently needed. The Legislature should
consider AB 205 as a model for streamlining and expediting the permitting of
transmission projects in California.
10. Policymakers should investigate the causes and potential remedies to PG&E’s
challenges in completing necessary transmission and interconnection network
upgrades projects.
11. Alternative transmission financing options should be investigated by California
policymakers to lessen the impact of the sizeable investment needed in
transmission expansion.

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13 | APPENDIX

A. MAPS

MAP A1.

MAP A2.

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MAP A3.

MAP A4.

TRANSMISSION IN CALIFORNIA | 36
MAP A5.

MAP A6.

TRANSMISSION IN CALIFORNIA | 37
B. TABLES

TABLE A1.

Source: CAISO 2022-23 TPP Presentation September 28th, 2022.

TABLE A2.

Source: “Power System Strategic Transmission Plan (STP) Update,” LADWP December 13th, 2022

TRANSMISSION IN CALIFORNIA | 38
TABLE A3.

Source: “Transmission Development in California—What’s the Slowdown?”

Clean Air Task Force, January 2023

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TABLE A4. DOE Programs Useful for Transmission Projects

TRANSMISSION LOANS, CAPACITY PROJECT

FACILITATION LARGE SCALE CONTRACTS, TECHNICAL DEVELOPER AND/OR
PROGRAM TRANSMISSION ASSISTANCE, OWNERSHIP OWNER

Grid Resilience Transmission wildfire Grant State, which would

resilience provide subaward
to project owner

Upgrading Our Innovative transmission Grants State and/or local

Electric Grid for resilience government

Technologies to Smart grid, advanced Grants Utilities

Enhance Grid conductors, network
Flexibility topology (e.g., multi-
terminal grids)

Regional Clean Network of hydrogen Grants, other agreements State and local
Hydrogen Hubs producers and government,
consumers with utilities,
“connectivity” technology
infrastructure developers, others

Loan Programs Office Large transmission Loan guarantees Project developer/

owner

WAPA Power and Power and/or Project developer/

Transmission Transmission Service owner
Purchase Contract

Transmission Transmission Loans Project developer/

Infrastructure owner
Program

Public-Private Transmission Partnership to develop Project developer/

Partnership Projects and own transmission owner
assets, including through
WAPA, under the
Transmission Facilitation
Program authority

Source: DOE, https://www.energy.gov/

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