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$1 Billion May Be Needed For Lines Tied To Sunrise Powerlink

Audio

Aired 1/28/10

The cost to California ratepayers of moving energy through SDG&E's planned $2 billion Sunrise Powerlink project may go up another billion dollars. That's because planners of the state's power grid now say major reinforcements are needed to move energy from the desert to the customer.

The proposed route for the Sunrise Powerlink.
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Above: The proposed route for the Sunrise Powerlink.

The cost to California ratepayers of moving energy through SDG&E's planned 2 billion dollar Sunrise Powerlink project may go up another billion dollars. That's because planners of the state's power grid now say major reinforcements are needed to move energy from the desert to the customer.

Think of the state's electricity network as one giant freeway. It is the sole function of an agency called the California Independent System Operator to make sure electricity on this freeway runs without congestion.

But some say the ISO has failed in its only mission. In 2006, the ISO endorsed SDG&E's Sunrise plan, in part, because it said the project was necessary to meet the state's target of 33 percent renewable energy by 2020.

The ISO apparently considered SDG&E's project in isolation. It did not take into account that other utilities like Southern California Edison also had to meet the 33 percent expected target.

"We knew at that point that 33 percent was certainly possible but it hadn't been finalized yet," said the ISO's Gregg Fishman. "Now, we're looking at a mandate to reach 33 percent renewables by the year 2020. And in order to do that, it is going to cost more, there are going to have to be additional transmission projects built."

Going back to the freeway analogy, the billion dollars the ISO says is needed for upgrades would build the equivalent of freeway on-ramps and off-ramps to make sure the power grid doesn't get clogged up. Most of those upgrades would be for lines associated with Sunrise.

But SDG&E's Jim Avery says even without the upgrades, Sunrise could still meet the target.

"Sunrise is fully capable of delivering everything that was promised back in the time of the hearings in 2006, 2007, 2008 and nothing has changed in that area whatsoever."

But local engineer Bill Powers says that's only true if all of the solar projects the ISO is now expecting east of Palm Springs are never built. Powers, who opposes the Sunrise project, says the public should have known about the upgrades in 2006 and would have if the ISO had done its work properly. He says the ISO should have factored in extensive solar development in the desert east of Palm Springs four years ago because this area had already been identified by the state as a major solar development zone.

"The moment the ISO determined that they were going to use California's desire to reach 33 percent renewable energy by 2020 as one of the justifications for the Sunrise Powerlink project, they had an obligation to include all of the renewable energy resources wherever they would be in Southern California that would allow them to reach 33 percent by 2020."

But the ISO's own documents show it did not account for any solar development east of Palm Springs back in 2006. Even though it had endorsed a plan by Southern California Edison to transmit renewable energy a full year before it backed Sunrise.

"Was it reasonable to assume no renewable energy in Riverside County? The word 'assume' takes on different meanings. It's not that we weren't assuming there would be some. It's that those plans, those projects did not yet meet the criteria to be included in the assumptions for Sunrise at that time."

So what renewable projects did the ISO consider back in 2006 outside of Imperial County? Only the Techachipi Project just north of Los Angeles County.

"It's the one renewable energy resource area in Southern California that would have no impact on the Sunrise Powerlink. It's just in a completely different sector of the transmission grid," says Powers.

Powers says it's somewhat deceptive because it gives the impression the ISO did model renewable energy resources when the only one it included was irrelevant to San Diego. And Powers points out it is not the ISO, nor SDG&E who will pick up the tab if the $1 billion in upgrades are built.

"We do. The ratepayers are the ones who ultimately pay that cost. It's spread all over the state but it's a cost we pick up completely. It's not fair at all."

Comments

Avatar for user 'gu4u2'

gu4u2 | January 28, 2010 at 9:58 a.m. ― 4 years, 2 months ago

Ms. Sharma "forgets" to connect the dots in this article. Poor journalism or hidden agenda - we will never know. From what I gather, the extra billion dollar cost described in the article is a good thing. It looks like the power line will be used to channel even more renewable energy projects than previously thought. As far as the "unfairness" of the cost being passed to ratepayers, that is imposed by the State's target of having 33 percent renewable energy by 2020. The power line is just a tool that will help this target to be met. If this article was more through, it could have explored the extra energy cost that the 2020 target will result to consumers. Instead, it just bashed the power line project like KPBS always does without presenting a solution.

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Avatar for user 'LauraPsi7'

LauraPsi7 | January 28, 2010 at 10:19 a.m. ― 4 years, 2 months ago

If you look at the history of this project, you will see the trendline of projected costs has increased dramatically from when it was first presented by SDG&E in 2005. The following are quoted costs from SDG&E press releases on the project

Dec 2005—$1.0 Billion
Sept 2006— $1.3 Billion
April 2007—$1.4 Billion
April 2008—$1.5 Billion
April 2009—$1.9 Billion
June 2009- $2.0 Billion
Jan 2010 - $3.0 Billion

One can only imagine what the true costs will end up being if this project is built. $3 billion sure could buy alot of roof-top solar.

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Avatar for user 'gu4u2'

gu4u2 | January 28, 2010 at 11:15 a.m. ― 4 years, 2 months ago

LauraPsi7,
Where would you get these 3 billion for roof-top solar panels? The bankrupt State of California? Are these panels going to work as efficiently on the foggy coast compared to the desert? I believe that companies like Sempra Energy know a thing or two about power generation, and they wouldn't be putting this kind of money in a project that is not viable.

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Avatar for user 'LauraPsi7'

LauraPsi7 | January 28, 2010 at 2:19 p.m. ― 4 years, 2 months ago

gu4u2.
To understand SDG&E's incentives, you need to understand that SDG&E gets paid by the state (me and you) for the cost of the construction, plus a guaranteed profit of 15%. The more it costs, the more money they get. It is not about viability. It is about money. In fact, once they build it, the state only allows them to pass on those costs to us for a period of time (its depreciable life), so the only way they can make more money is to build more transmission. On the other hand, repairing and maintaining the exisitng lines is an expense... a direct hit to their bottom line. So, it is not about viability. It is about a system that incentives them to build build build, even if not needed. And, even an administrative law judge at the CPUC said it was not needed. But you are talking about a very powerful monopoly, with alot of money at stake. We, the people, need to look behind the curtain, and not be so easily deceived by a monopoly that spends our money to convince us in PR campaigns that they are so good, all the while reaching deeper into our pockets. I think builidng our own infrastructure, and becoming the generators and providers of energy, instead of just the consumers and debtors, is the only way we can become a strong economic region.

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