SDG&E supports CPUC timeline for Valley-Rainbow project

SAN DIEGO, Aug. 14, 2001 – The California Public Utilities Commission’s (CPUC’s) regulatory schedule for the $271 million Valley-Rainbow Interconnect transmission line, combined with significant customer conservation efforts, support a one-year in-service delay for the project, from 2004 to 2005.

The project is required to add a new power pathway and alleviate future congestion along the existing Path 43 transmission line corridor that connects the San Diego Gas & Electric (SDG&E) system to the remainder of California’s power grid.

Despite the delay, SDG&E officials remain confident that electric reliability standards will not be jeopardized. SDG&E’s confidence in electric reliability is bolstered by revised electric-demand forecasts that reflect dramatic customer energy-conservation efforts and new local generation plants designed for use during peak electricity demand periods. Despite conservation efforts, the long-term statewide need for the project has not changed.

The state’s command center for electric reliability, the California Independent System Operator (Ca-ISO), agrees with SDG&E that a project such as the 31-mile, 500,000-volt Valley-Rainbow Interconnect transmission line, linking SDG&E’s system at Rainbow and Southern California Edison’s system in Romoland, is essential for future electric reliability.

Terry Winter, president and chief executive officer of the Ca-ISO, said that, without a transmission reinforcement like Valley-Rainbow, the existing Path 43 transmission corridor linking the Southern California Edison and SDG&E systems north of the San Onofre Nuclear Generating Station, the region could experience future electricity congestion conditions similar to those in northern California that were caused by a bottleneck on Path 15 near Bakersfield.

Over the past winter, Path 15 limitations prevented available generation in the south from supplying needed resources to meet load in the north. These limitations played a prominent role in rolling blackouts in Northern California during times when generation units were sitting idle in Southern California. This highlights the need to build infrastructure to support the proposed generation in the area, Winter said. Even if only a fraction of the generation currently proposed is constructed, the state will need additional transmission capacity to move that energy to where it is most needed, Winter said.

“We look forward to presenting the case for the need for this project to the CPUC in September and supporting SDG&E’s efforts to plan and implement a solution that addresses future power bottlenecks,” Winter said. “There is a significant amount of power generation planned for the San Diego area, including Mexico, and a project such as the Valley-Rainbow Interconnect will allow this generation to meet the statewide energy demands.”

“SDG&E and the Ca-ISO agree that this project has multiple needs for the region, and we look forward to presenting these needs before the CPUC in September,” said James P. Avery, senior vice president of fuel and power operations for SDG&E. “Even if all the generation projects slated for the San Diego and Mexico regions are built, this project will be required to meet the growing statewide demands for competitively priced electricity.”

In SDG&E’s service territory, Calif. Governor Gray Davis’ 20/20 rebate plan and other customer incentives, plus moderate summer temperatures, have resulted in customers reducing 2001 electricity demand by 12 percent, or about 500 megawatts (MW), less than the forecasts the company made last October. This led to the revised 2002 forecast that SDG&E customer demand will peak at 3,902 MW of electricity in 2002 – 381 MW less than the previous forecast.

“These conservation efforts give us comfort that the possible CPUC delay in the in-service date will not jeopardize reliability for SDG&E customers,” Avery said.

A megawatt is enough electricity to support approximately 1,000 homes.

“The proposed Valley-Rainbow Interconnect will benefit the entire Southern California region by delivering a much needed energy supply to sustain the continued growth of the region and relieve the growing congestion along the Path 43 transmission corridor,” Avery said.

San Diego Gas & Electric is a regulated utility that provides service to 3 million consumers through 1.2 million electric meters and 740,000 natural gas meters in San Diego and southern Orange counties. SDG&E is a subsidiary of Sempra Energy (NYSE: SRE – news), a Fortune 500 energy services holding company based in San Diego.

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