Transmission Ranking Cost Reports

1
Transmission RankingCost Reports

• CEERT Presentation to the
• CPUC Workshop
• January 20-21, 2005

2
TRCR Problems

• Base case used to compute need for network
  upgrades gives priority to all existing and
  proposed new generation
• Effectively puts new renewables last in loading
  order
• Serves to protect market share of existing
  generators located outside coastal load pockets
• Ignores system dispatch rules.

3
TRCR Problems

• No congestion requirement is impossible for any
  new and many existing generators to meet. This
  requirement
• Is unfairly imposed on new renewable projects
• Vastly exceeds FERC interconnection standards
• Fails to give renewable project credit for any
  congestion relief that does occur.

4
TRCR Problems

• Congestion costs appear in hourly price
  differentials. These costs
• Are already considered in least cost best fit
  analyses
• Adding a transmission cost would be double
  counting
• Do not represent incremental system costs caused
  by the renewable project.

5
TRCRs Principles

• Transmission upgrades to be included in TRCRs
  must
• Not exceed FERC interconnection requirements
• Treat new renewable projects equally with all
  existing transmission users
• Existing transmission users must not be
  grandfathered into dispatch assumptions

6
TRCR Principles

• Network upgrades are required only for
• Grid reliability (energy only standard)
• Deliverability of energy sufficient to satisfy
  all loads assuming feasible generator redispatch
• Reducing net energy production costs,
• Giving credit to developers for such reductions,
  and
• Imposing costs proportional to use of facilities
  by the renewable project.

7
Recommendation 1

• Transmission adder should be limited to the
  proportional cost of upgrades required by
  deliverability standard.
• Congestion costs assumed zero absent evaluation
  and showing that costs have not been accounted
  for elsewhere
• Process consistent with transmission adequacy
  analyses being developed in RAR docket.

8
Recommendation 2

• For projects in ISO queue with a System Impact
  Study deliverability analysis,
• Transmission adder cost of upgrades indicated
  by DA, with
• Credit given for unused portion

9
Recommendation 3

• For projects without a System Impact Study
  deliverability analysis,
• TRCR network upgrade obligation should be
  calculated using the RAR methodology
• Credit given for unused portion

10
Recommendation 4

• Out-of-state renewables delivered to the ISO
  control area having sufficient transmission
  scheduling rights to be deemed deliverable by
  the RAR methodology are to be given a
  transmission adder 0.

11
Recommendation 5

• Transmission impacts should be evaluated on the
  basis of an integrated CAISO control area, not 3
  IOU areas.
• Renewable power delivered anywhere in ISO area
  satisfies RPS goals
• Imbalances easily made up by inter-IOU trades or
  RECs

12
Recommendation 6

• A transmission adder computed under the
  deliverability standard which causes an otherwise
  cost effective project to be dropped from further
  consideration should be recalculated using the
  energy only standard and the project reassessed
  on that basis (without RAR capacity credit).

13
California Projected Path Ratings(PVD2 - Project)

Total Simultaneous Imports for RAR Deliverability
Analysis 8,000MW
14
Conclusions

• Unreasonable transmission costs in TRCR will
  vitiate the RPS
• Renewables must be given equal access to markets
• CPUC must consider reasonable TRCRs as part of
  its RPS implementation strategy
• CEERT recommendations would provide a simple and
  transparent methodology for calculating TRCRs.