A big step forward on transmission infrastructure

Editor’s note: The Board of Governors voted unanimously Thursday July 20, 2023 to approve the ISO’s new Subscriber Participating Transmission Owner model for development of generation and transmission from outside of the ISO balancing area, which will facilitate delivery of critically needed resources to the ISO. Deb Le Vine, the ISO’s Director, Infrastructure Contracts & Management, explains how the new model will work in this Energy Matters blog post.

As anyone in the electricity business knows, planning, siting, permitting, financing and building transmission infrastructure is a complex, time-consuming and difficult process. Congress, the Federal Energy Regulatory Commission (FERC), state legislators and bulk electric system operators like the California ISO and others around the country have been working to identify new and more efficient ways to make sure we have the transmission infrastructure required to move power from where it’s generated to where it is consumed.

The need for additional transmission capacity in California is particularly critical. As noted in the ISO’s 20-Year Transmission Outlook published in 2022, the state will require as much as 120 gigawatts (GW) of new clean energy resources to meet the decarbonization goals of Senate Bill 100 by 2040. The vast majority of those new resources are expected to come from within California and from offshore wind. But, consistent with the California Public Utilities Commission’s “Preferred System Plan” and the California Energy Commission’s “starting point” scenario for achieving state decarbonization objectives, both agencies anticipate meeting a portion of California’s clean energy needs from out-of-state resources that will require additional transmission capacity.

Now, with approval last week by the ISO Board of Governors of our new Subscriber Participating Transmission Owner (Subscriber PTO) model for development of generation and transmission from outside the ISO balancing area, we believe a big step forward has been taken regarding transmission infrastructure in California and the West. We are also confident this new model, which will facilitate delivery of critically needed resources to the ISO grid, can be used more broadly in the West on future projects so everyone can save time and money in getting new transmission projects up and running.

The Subscriber PTO model can enable new transmission lines outside the ISO balancing area for developers wanting to build and place their transmission facility or facilities under ISO operational control and use those transmission facilities to connect generation to the ISO grid. The transmission project to connect such generation, financed through the FERC-approved subscriber process, would be outside the revenue requirement of the ISO’s transmission access charge.

The process that resulted in last week’s approval by the ISO Board began more than a year ago for us when we started discussing the concept and issues with developers of the proposed TransWest Express (TWE) transmission project. In June of 2022, following up on those initial conversations and consistent with section 4.3.1.1 of the ISO tariff, we received TWE’s application to become a Participating Transmission Owner (PTO) in the ISO balancing authority area.

Importing wind power from Wyoming

TWE’s plans call for building a 732-mile combined high voltage direct current (HVDC) and alternating current (AC) transmission line that has the potential to bring up to 3,000 megawatts (MW) of clean Wyoming wind power into California and other states in the desert Southwest as early as 2027. The line splits at the end of the HVDC portion in Utah, allowing 1,500 MW to go to the Los Angeles Department of Water and Power, while the remaining 1,500 MW can serve the ISO and NV Energy.

Costs for the $3 billion project will be recovered through TWE tariffs from subscribers using the transmission lines to move power and would not affect the ISO’s transmission access charge. The subscriber rights would pay for the generation, transmission, and congestion on the portion of the line used by the subscriber. 

This model is also significant because it is the first in the nation that enables development of out-of-state generation to be provided using the subscriber approach. The subscriber model also allows development of out-of-state renewable generation identified in the CPUC’s Final Decision Ordering Supplemental Mid-Term Reliability Procurement, the CPUC resource portfolios used in the ISO’s 2023-2024 transmission planning process, and the new transmission facilities required to reach identified resource locations.

These portfolios call for out-of-state wind generation that requires new transmission to reach the ISO border: 1,000 MW from Idaho, 1,500 MW from Wyoming, and 2,328 MW from New Mexico. These volumes build on the amounts provided as part of the ISO’s 2022-2023 transmission planning process. They also match the values that the ISO used to size transmission needed from the ISO border to load centers in the 2022-2023 plan and they align with the longer-term requirements set out in the scenario provided by the CEC and the CPUC to the ISO for the ISO’s 20-Year Transmission Outlook.

A ceremonial groundbreaking for the transmission line, which has been in the planning and development stage for some 20 years, took place in Wyoming on June 20, 2023. If successful in securing subscribers for the generation, TransWest Express plans to energize in 2027. Adding more wind power to our grid would also help bolster reliability, as demand for electricity is projected to grow significantly in the coming years through increased electrification of the transportation and building industries, and as California continues adding more renewable energy to the grid as part of its overall climate goals.

Unlocking a more diverse portfolio of renewable energy

The idea of connecting a reliable source of wind energy with a high capacity factor from remote areas to high-demand centers across the Western U.S. has long been recognized as a way to help unlock a more diverse portfolio of renewable energy resources that can help meet clean energy goals in a cost-effective and efficient way. Adding diverse resources from different areas at varying times of the day would add flexibility to the system and help with the transition to a cleaner grid.

Access to new wind-generated power from out of state could shore up energy supplies when the wind is not blowing in California or the sun is not shining, helping utilities reduce reliance on peak-priced fuels and cutting down on greenhouse gas emissions.

Transmission planning is a core function of the California ISO. As part of that work, we actively engage stakeholders and the public in determining short and long-term infrastructure needs. Once the needs are identified by Regional Planning and Grid Assets, Infrastructure Contracts & Management, where I serve as director, picks up the reins to get the contracts executed, resources online, and managed to ensure the resources and transmission are available for consumers. 

The process is robust and challenging, but it is also gratifying when we emerge on the other side with a creative solution, a viable project and a sound, efficient way of getting it financed. At the California ISO, we will continue to do all we can to make sure California has the infrastructure needed to operate a reliable, safe and cost-effective power system and look forward to more creative solutions.