Crisis Aftermath: Piecing Western Markets Together

 

California must address its transmission problems, particularly Path 15.

The roots of the California crisis and resulting turmoil in Western U.S. electricity markets run deep, encompassing deficiencies in both generation (when hydro availability is low) and transmission. To restore workable competition via deregulation in the region, the transmission and generation pieces need to be addressed in tandem. This discussion highlights key developments in transmission that are under way, and their impact on generating resources and supply adequacy.

California has historically suffered from a number of transmission constraints. Perhaps the most infamous transmission bottleneck, resulting from its pivotal role in the California energy crisis in early 2001, is the Path 15 transmission constraint. Path 15 restricts access to thermal generating capacity in Southern California during low hydro conditions in Northern California, when support from the south is needed the most.

Other transmission bottlenecks plague California as well: Most of the major metropolitan areas within the state have inadequate lower-voltage transmission facilities, which restricts full access to power from the 500-kV transmission system. Furthermore, import capability is limited in Southern California by transmission constraints between California and neighboring states. Transmission constraints limit the total amount of power that can flow south from the Pacific Northwest into California to about 7,800 MW. Of this, 3,100 MW is dependent on the status of a single +/-500-kV high-voltage direct current transmission line that connects Northern Oregon to Southern California.

The California energy crisis triggered a concerted effort to mitigate the impact of many of the transmission bottlenecks that have historically plagued the state, and these efforts continue to reduce California's dependence on the highly variable hydrological resources located in Northern California and the Pacific Northwest. For example, generating resources are being added in Northern California that will decrease dependency on hydro conditions and decrease dependency on support from power generated by thermal resources in the south. There is both federal and state support for an expansion plan to increase the transfer capability of Path 15 to 5,400 MW, up from the current 3,900 MW rating.

Trans-Elect has decided to carry most of the cost for the Path 15 expansion plan as well as a substantial portion of the cost needed to connect the coal resources in the Four Corners region of northwestern New Mexico to Las Vegas via a new 500-kV transmission line. This latter project will also increase transfer capability between Arizona and California. Generating resources are being added in Southern California that will improve operating conditions and in turn will improve conditions to import power into the region. Finally, the California Independent System Operator and other state agencies have approved key transmission expansion projects.

It is our view that California will strive to provide enough in-state capacity to meet demand and will in the future only opportunistically rely on the low-cost hydro resources of the Northwest.

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