California’s Renewable EnergyTransmission Initiative
Anne GilletteRenewable Energy Policy Analyst
California Public Utilities Commission
August 12, 2008
• California’s clean energy goals and “The Transmission Problem”
• Transmission permitting at the CPUC
• The Renewable Energy Transmission Initiative (RETI)
• Lessons Learned from RETI
Presentation Outline
• California’s clean energy goals and “The Transmission Problem”
• Transmission permitting at the CPUC
• The Renewable Energy Transmission Initiative (RETI)
• Lessons Learned from RETI
Presentation Outline
California’s Clean Energy Future
• Renewables Portfolio Standard:
– Retail energy sellers must procure an additional 1% of their retail sales from renewables each year until they reach 20% by 2010
– California is considering a further renewable energy goal of 33% by 2020
• California Global Warming Solutions Act of 2006 (AB 32)
– 2020: Emissions at 1990 levels
– 2050: Emissions at 80% below 1990 levels
– Draft Scoping Plan lists a 33% by 2020 RPS as one of 5 “key elements” needed in order to realize the 2020 emissions goal
Risk Factors for 2010 RPS Generation
0%10%
20%30%
40%50%
60%70%
80%90%
100%
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Note: California has little control over this barrier
Transmission is a major barrierto RPS project development in California
Why is transmission a barrier?
• Many of California’s most valuable renewable resources are far from load centers
• Existing transmission lines are often congested
• Significant transmission expansion is required to bring more renewable resources to market
• Chicken-and-egg problem: utilities don’t want to build transmission until generation development is confirmed; developers don’t want to commit to generation projects unless transmission access is confirmed
• Permitting a transmission lines is a rigorous and often contentious process
CPUC Work to Address “The Transmission Problem”
• Streamlining the application process
• Implementing Backstop Cost Recovery
• Working with California Independent System Operator (CAISO) on interconnection queue reform
• Addressing outstanding issues through CPUC RPS Transmission Investigation/ Rulemaking
• Anticipating needs in the permitting process – the Renewable Energy Transmission Initiative (RETI)
• California’s clean energy goals and “The Transmission Problem”
• Transmission permitting at the CPUC
• The Renewable Energy Transmission Initiative (RETI)
• Lessons Learned from RETI
Presentation Outline
The CPCN Process
• CPUC must issue a Certificate of Public Convenience and Necessity (CPCN) for major transmission projects proposed by California Investor-Owned Utilities (IOUs)
– Note: municipal utilities have their own permitting processes, but joint muni-IOU lines might be cost-effective
• CPCN review has two components:
– Determination of need
– Environmental review
CPCN: Determination of Need
• A transmission project can be justified by the CPUC on the basis of:
– Economics: CPUC has given the CAISO a “rebuttable presumption” on the economic analysis of a line, provided certain criteria are met
– Reliability
OR
– Renewable energy goals
CPCN: Environmental Review
• CPUC must analyze impacts of proposed line pursuant to the California Environmental Quality Act (CEQA); must consider alternatives that meet project objectives
• A project crossing federal land will also require federal environmental review
– CPUC prepares joint environmental documents with federal agencies to address both CEQA and the National Environmental Policy Act (NEPA)
– Federal agency involvement often means delay
Permitting takes time
• CPCN review takes ~18 months if all goes well
• CEQA review alone generally requires over a year because of biological surveys, etc.
• Public can comment on scope of environmental review, propose alternatives to the project
• NIMBY issues and environmental concerns can create public opposition and result in project delay
RPS goals have dramatically changedthe transmission game
• Pre-2002 (prior to RPS legislation) – transmission planning and permitting focused on addressing system reliability.
• Post-2002 – Devers-Palo Verde 2 approved based on economics; Tehachapi approved based on need to interconnect renewables – and more to come.
• Today – Given aggressive RPS goals, CA needs to proactively identify and evaluate multiple renewable transmission projects.
Which “renewable lines” are the best?
• What counts as a “renewable” line? Should some sort of economic test also be applied?
• CPUC must ensure development of cost-effective renewable transmission and generation
– CPUC both oversees IOU renewable procurement and permits IOU transmission lines.
– Pursuant to statute, IOUs must procure the most cost-effective renewable resources, accounting for transmission and other costs.
• CPUC needs to consider system reliability, economic benefits and renewables when permitting multiple transmission projects
• California’s clean energy goals and “The Transmission Problem”
• Transmission permitting at the CPUC
• The Renewable Energy Transmission Initiative (RETI)
• Lessons Learned from RETI
Presentation Outline
Renewable Energy Transmission Initiative
• Statewide collaborative study effort to identify the transmission needed to access and deliver the most cost-effective renewable resources in CA and neighboring states
• Participants: CPUC, California Energy Commission, CAISO, IOUs, munis, developers, environmental advocates, other interested parties
• Commitment to open, inclusive, transparent process on an expedited schedule
• Goals:
– Answer the question, Which lines are best?
– Facilitate the planning and permitting of the “best” lines
RETI Objectives
• Provide a common forum for permitting agencies, utilities, and developers, and stakeholders to examine the location and timing of new generation/transmission projects;
• Develop common information, tools and analytical methodologies to objectively evaluate renewable development potential; and
• Support existing transmission planning institutions.
RETI is an inclusive, transparent process
• CPUC needs an effective way to compare relative benefits of renewable development in various regions of CA, neighboring areas
• Stakeholder participation critical to ensuring accurate representation of a project’s economic and environmental implications
• RETI will provide objective, consistent, publicly-vetted resource and cost information to supplement the record in CPUC transmission proceedings
• Transparency needed if used in CPCN proceeding
Three-Phased Process
• Phase 1 – Identification and ranking of Competitive Renewable Energy Zones (CREZs)
• Phase 2 – Refinement of CREZ analysis for priority zones and development of statewide conceptual transmission plan
• Phase 3 – Detailed transmission planning for CREZs identified to be developed
Phase 1 – Scope of Work
• Identify developable renewable resources in California and neighboring areas through engineering review (slope, road access, land use constraints, etc.)
• Analyze the economics of development in each area, including:
– Costs: Generation and Transmission
– Value: Energy and Capacity
• Identify and rank high-value CREZs based on geography, development timeframe, shared transmission constraints, additive economics of specific resources
• Evaluate environmental impact of development in each CREZ
• Final Phase 1 Report due in October 2008
Phase 1 – Environmental Working Group
• Significant and very positive development
• For first time, environmental organizations and developers representing all renewable technologies working on project siting in a systematic, collaborative, proactive manner
• EWG has:
– Identified and mapped “black-out areas” where generation development precluded by law or policy
– Identified and mapped “yellow areas” where generation development is restricted or will be environmentally difficult
– Developed a methodology for rating CREZs according to their environmental impact and combining that rating with the economic CREZ ranking to develop RETI’s final CREZ “short-list”
Phase 1 – Important Points
• Not reinventing the wheel – pulling together and building on pre-existing work, relevant regulatory decisions and agency priorities
• Focusing on actual commercial potential
• Applying consistent assumptions across the region
• Stakeholders drive process by validating the work of an independent consultant (Black & Veatch) through consensus input
• Goal is to rank CREZs through stakeholder consensus to reflect commercial potential, economics, and hard to quantify environmental and other concerns
Phases 2 and 3 – Scope of Work
• Phase 2
– Transmission owners and other interested parties develop conceptual transmission plans for the highest ranking CREZs in collaboration with existing transmission planning organizations/institutions
– Draft planned for December, 2008; may be iterative
• Phase 3
– Existing transmission planning organizations collaboratively design transmission plans of service that result in applications to construct new transmission infrastructure to meet RPS goals
– ~ 8 month-long process; may be iterative
RETI Organization / Roles
• Coordinating Committee– Oversees the overall RETI
process– Ensures development of
needed information – Keeps the process on
schedule
• Stakeholder Steering Committee– Primary working group– Key stakeholder
representatives– ~30 members
• Plenary Stakeholder Group– Reviews Steering Committee
work– Provides feedback, “ground-
truthing”– All stakeholders and the
public
• California’s clean energy goals and “The Transmission Problem”
• Transmission permitting at the CPUC
• The Renewable Energy Transmission Initiative (RETI)
• Lessons Learned from RETI
Presentation Outline
Lessons Learned…
• Don’t reinvent the wheel
• Make transparency a priority
• Maintain a website to facilitate transparency – post all presentations, minutes of work-group meetings, etc.
• Use technology to facilitate participation in meetings
• Recognize that all stakeholders are very busy; make participation easy; have consultant develop straw proposals, etc.
• Provide schedule, process at beginning
…and More Lessons Learned
• Try for agreement from key stakeholders on guiding principles at start
• Ensure that stakeholder representatives understand and agree to their obligations
• Active facilitation of work groups and stakeholder meetings is key
• RETI has benefited from a Coordinating Committee responsible for keeping the process on track and coordinating with other processes
• Decision-making agencies must be clear about what they want/need from process
• Put processes and understandings in writing
More Information
• RETI Mission Statement, Frequently Asked Questions, meeting minutes and presentations, etc. available at: www.energy.ca.gov/reti/
• Questions:Anne Gillette