transmission costs

TRANSMISSION COSTS

Summary The availability and cost of

transmission are primary components in the Net Market Value (NMV) calculation used to rank competing resources in the RPS Calculator

They reflect the cost to deliver new renewable generation to California loads

The methodology of identifying available capacity and transmission costs in Version 6.0 is generally the same as previous version, additional updates planned

RPS Calculator Valuation Framework

Levelized Cost of Energy

Transmission Cost

Capacity Value

Energy Value

Net Resource Cost

Integration Cost*

−

=

−

+

++

*Not currently quantified in RPS Calculator

Summary Continued

Transmission availability and cost estimates for all existing CREZs will be updated in Version 6.0 of the RPS Calculator to reflect all available CAISO study information

Black & Veatch also identified new major resource areas (“Super CREZs”) for which new transmission cost estimates need to be developed (i.e. 3,000 MW new wind capacity in Sacramento River Valley)

Out of state transmission cost estimates are derived from previously vetted studies

RPS Calculator in Transmission Planning RPS Calculator receives information from and provides information

to CAISO transmission planning processes Transmission projects included in CAISO Transmission Planning

Process (TPP) are recovered through the Transmission Access Charge (TAC) levied on all users of the transmission system

TAC costs are passed on to ratepayers Generation projects accessing transmission lines in the TPP may avoid

additional delivery network upgrade (DNU) costs

Since the CAISO TPP is based on the CPUC’s RPS Calculator portfolios, it is critical the overall process shown here works

CAISO GIDAP

Transmission Inputs

Available Capacity [MW]

Delivery Network Upgrade (DNU) Costs

[$/kW-yr]

RPS Calculator

RPS Portfolios

Commercial Projects [MW]

Generic Projects[MW]

CAISO TPP

CPUC LTPP

Iterative - informs next cycle and other processes

Role of Transmission in RPS Calculator

In developing each portfolio , the RPS Calculator considers the: Availability of existing transmission Cost of building new transmission

General treatment of transmission availability and costs has not changed between Version 2.0-5.0 and 6.0

Updates have been made to inputs and additional updating required, as described in following slides

TRANSMISSION AVAILABILITY

Transmission Availability in RPS Calculator

General treatment of transmission availability has not changed between Version 2.0-5.0 and 6.0: Each zone has estimates of the amount of fully deliverable capacity (and associated

costs) available on existing transmission, minor upgrades, and major upgrades Existing transmission & minor upgrades assumptions provided by CAISO

Existing transmission capacity is allocated to (1) IOU contracts and (2) most favorably ranked generic projects

These projects have no associated upgrade costs Remaining projects are bundled together for selection on minor and major upgrades

Transmission Availability by Electrical Zone Estimates of existing capacity and minor upgrades provided by CAISO Major upgrades are assumed to represent a new transmission line

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Avai

labl

e Ca

paci

ty (M

W)

Major Upgrades

Minor Upgrades

Existing

Note: Graph reflects old transmission cost estimates and available transmission capacity data that will be updated prior to the F15-16 TPP by Q1 2015

Reso

urce

Net

Cos

t w/o

Tr

ansm

issi

on ($

/MW

h)

MW

Minor Upgrades

Major Upgrades

Tran

smis

sion

Upg

rade

Cos

t ($

/kW

-yr)

MW

Existing Tx

Allocation of Transmission Capacity

Resources are ranked and sorted in each zone based on their net cost without accounting for transmission

Available capacity for new transmission is allocated to the most favorably ranked projects Existing transmission is

allocated to IOU contracts prior to ranking/selection process

No upgrade costs for these resources

Higher cost projects assigned minor and major upgrade costs

No Tx CostMinor

Upgrade Cost

Major Upgrade

Cost

ESTIMATING TRANSMISSION COSTS

General Methodology Interconnection Cost Delivery Network Upgrades Zone Identification Out-of-state Transmission

Transmission costs split in three categories: Interconnection Cost Delivery Network Upgrades (minor

and major upgrades) Out-of-state Transmission

Unit costs based on: IOU Per Unit Costs B&V WECC methodology Previous E3 RPS calculator

estimates CAISO Delivery Network Upgrades

Methodology Overview

Gen-tie line Substation costs

New switching station New breaker position at existing substation

Interconnection Facility Costs

Gen-tie lines Costs vary depending on interconnecting utility

UtilityVoltage Class (kV) – Cost/mile

< 100 kV 115 kV 230 kV 500 kV

PG&E $1,400,000 $1,400,000 $1,690,000 $4,610,000

SCE $1,559,000 $1,606,000 $2,276,000 $3,796,000

SDG&E $1,922,000 $3,981,000 $4,431,000 $4,559,000

VEA N/A $1,590,000 $1,770,000 N/A

From 2013 PTO Per Unit Cost Information


Note: Costs will be updated with 2015 estimates prior to the F15-16 TPP by Q1 2015

Two substation options based on project location. Example: Project A is within reasonable gen-tie distance –

new breaker position Project B is not within reasonable gen-tie

distance, but can connect to the 115 kV line – new switching station

Project A 20 MW

Project B20 MW

Sub A 115 kV

Sub B 115 kV

115 kV Line


New Breaker Position (Existing BAAH Substation)

New Switching Station (Ring Bus)

UtilityVoltage Class (kV)

< 100 kV 115 kV 230 kV 500 kV

PG&E $1,400,000 $1,550,000 $2,100,000 N/A

SCE $878,000 $919,000 $2,170,000 $5,232,000

SDG&E $528,000 $680,000 $2,036,000 $3,940,000

VEA N/A $603,000 $1,004,000 N/A

From 2013 PTO Per Unit Cost Information

UtilityVoltage Class (kV)

< 100 kV 115 kV 230 kV 500 kVPG&E $10,800,000 $12,000,000 $16,000,000 N/ASCE $3,222,000 $3,471,000 $17,767,000 $36,715,000SDG&E $4,233,000 $7,377,000 $13,509,000 $40,610,000VEA N/A $4,602,000 $6,170,000 N/AFrom 2013 PTO Per Unit Cost Information



DNU costs consist of minor and major upgrades Worked with CAISO to determine best way to incorporate

DNU in analysis Proposed method is to use costs for upgrades based on

interconnection studies for projects in Competitive Renewable Energy Zones (CREZ)

Three categories: Available transmission capacity with no upgrades Available transmission capacity with minor upgrades Available transmission capacity with major upgrades


Example DNU Costs:


MW of Available Capacity in 2020

on Existing Transmission (No Upgrades)

MW of Available Capacity in 2020

on Existing Transmission

(Minor Upgrades)

Cost of Minor Upgrades ($M)

Major Upgrade Segment Size

(MW)

Major Upgrade Segment Capital Cost ($ millions)

Riverside East (Riverside East, Palm Springs) 350 350 2,400 955Tehachapi 3,774 4,774 100 Westlands 0 2,590 1,512

CAISO has not studied all areas and so transmission availability and costs for minor and major upgrades in several areas have not been established

Currently use costs estimated by E3 in previous version of the RPS Calculator.

CPUC and CAISO have developed a proposed approach to update the costs (see following slides)

Estimates will be updated in time for the F15-16 TPP by Q1 2015

Updated resources need to be assigned to zones. Many are outside original boundaries.

Proposed method and new Super CREZ described in “California Renewable Energy Resource Potential and Cost Update” presentation

Delivery Network Upgrade (DNU) Costs - Key Issues

1. The 2010 estimates would be used as an initial starting point for the 6.0 Version of the Calculator

2. The Calculator would be run with the initial estimates, and the most economical Super CREZs would be identified

3. These Super CREZs would then be examined by the CAISO to update the major and minor transmission costs estimates for each area

4. The calculator would be re-run with the updated costs, and the most economical Super CREZs would be identified again

5. If there are any changes in the list of most economical Super CREZs, these would be sent to the CAISO for re-study, returning to step 3

6. This process would continue until the list of most economical Super CREZs does not change after updating the transmission cost estimates. These costs would be incorporated into Version 6.1 of the RPS Calculator, which would then be vetted by stakeholders.

Proposed Approach for Updating Transmission (DNU) Cost and Availability

Proposed Approach for Updating Transmission (DNU) Cost and Availability

2. RPS Calc Run

3. Special CAISO Study of Tx for Selected Super

CREZ

4. RPS Calc Run

New Super CREZ

Identified?

6. No Costs and availability to Version 6.1 of RPS Calculator

5. Yes: re-study new areas

Updated Major/MinorTx Cost Estimates

for Super CREZ

Selected portfolio of most economic

Super CREZ from RPS Calc Supply Curve

1. Starting Tx Cost and Availability(Past CAISO Studies +

E3 Estimates)

Most Economic Super CREZ

Largely based on previously vetted initiatives:

RETI 2B (2010) B&V work for WECC on

transmission costs (2012-2014)

WREZ Generation and Transmission Cost Model (2009-2013)

Out Of State Transmission Costs

Out-of-state transmission costs Cost basis: 500 kV single-circuit ac transmission, 1500 MW

capacity, $1.8 million/mile, federally financed, Delivered to “gateway CREZs” (e.g., Mountain Pass) From WREZ Generation and Transmission model Line utilization based on resource capacity factor

In-state transmission costs: Added CAISO DNU costs to OOS costs using same approach

as California projects

Out-of-state (OOS) Transmission Cost Approach


Focus is on highest quality OOS resources for CA

Pacific Northwest > Round Mountain

Northern & Central Nevada > Owens Valley

Southern Nevada, Utah and Wyoming > Mt. Pass

Arizona, New Mexico > Riverside East

Baja California > Imperial Valley South

OOS Resources Delivered To California Gateway Substations / CREZs

COB

MIDWAY

MONA AULT

STORY

BURLINGTON

LAMAR

VILAS

MONTROSEPONCHA

SAN LUIS

WEST CEDAR

GONDER

TRACY

Owens Valley AMARGOSA

NEW 11

ANTELOPE

SERRANO

PISGAH

DEVERS MOUNTAIN

BLYTHE

BELLOTA

VACA DIXON

LUNAHILDAGO

WESTWING

SANTA ROSAGREENLEE

CHOLLA

FOUR CORNERS

RIO PUERCO

NEW 28

TOME

NEW 26

CALIENTE

ARROYOCPO

SN FELIPE

TORTOLITA

LOS COCHES

WALSENBURG

GLADSTONE

MONROE

OLYMPIA

J OHN DAY

NEO

BELL

NEW92

GARRISON

NEW39

NEW93

HAVRE

CONRAD

BRADY

MIDPOINT

NEW 19

BOISE

G COULEE

NEW 15

MIRACLE MILE

CASPER NORTH

YELLOWCAKE

NEW 35

LARAMIE RIVER

ARCHER

STERLING

BETHEL

BROADVIEW

FLAMING GORGE

RUPERT

ENDAKO

WILLISTON

GORDON M SHRUM

TUMBLER

PORT MCNEIL

INDEGLOW

NEW 53

NICOLA

SELKIRK

J ANET

KELLY LAKE

NEW56

NEW42

WEST BROOKS EMPRESS

RED DEERBIG KNIFE CREEK

SLAVE RIVER

GOLDSTREAM

ESMERALDA

BRIDGE

DENVER

TERMINAL

IV South HARQUAHALA

Mt. Pass

Rd. Mtn.

NEW 12

MEAD

Riverside East

• Notes: Costs are for 500 kV single-circuit ac line. In many cases other options may be more cost effective, particularly HVDC for long distance transmission

• Costs include the line, necessary substations, and right of way. Do not include overhead and AFUDC, estimated as an additional 17.5%. Operations and maintenance and losses need to be separately considered.

• Portions of the BJ_NO zone are very close to the California border. As such, this average cost for the zone is likely to overestimate the costs for certain resources that might directly interconnect across the border.

Estimated Transmission Capital Costs For OOS Zones, 500 kV Single-circuit

Zone Tx Capital Costs (Millions)

AZ_NE $ 734 AZ_NW $ 267 AZ_SO $ 699 AZ_WE $ 236 BC_CT $ 2,598 BC_EA $ 1,711 BC_NE $ 2,899 BC_NO $ 2,707 BC_NW $ 3,107 BC_SE $ 1,711 BC_SO $ 1,875 BC_SW $ 1,890 BC_WC $ 1,805 BC_WE $ 2,095 BJ_NO $ 205 BJ_SO $ 488

Zone Tx Capital Costs (Millions)

ID_EA $ 1,411 ID_SW $ 1,015 NM_EA $ 1,621 NM_SE $ 1,889 NV_EA $ 719 NV_NO $ 539 NV_SW $ 399 NV_WE $ 699 OR_NE $ 1,022 OR_SO $ 232 OR_WE $ 794 UT_WE $ 553 WA_SO $ 1,066 WY_EA $ 2,208 WY_EC $ 1,690 WY_NO $ 1,956 WY_SO $ 1,989


RPS Calculator Guide

• The parameters that affect Transmission can be found on the following tabs:– Tx_Inputs: cost and availability of transmission for each SuperCREZ

• Includes existing capacity and minor & major upgrades

transmission costs

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