1. CPUC Vision for Transmission Planning in the West Dian M. Grueneich, Commissioner California Public Utilities Commission Western Electricity Coordinating Council Annual Meeting April 20, 2006

2. Commissioner Dian M. Grueneich April 20, 2006 1 Overview Major Transmission Development in California: Lots of Activity California Transmission Projects in Permitting Process Key CPUC Responsibilities Challenges Regional Transmission Siting Efforts Energy Action Plan GHG Performance Standard Renewable Potential in California Frontier Line Competitors??

3. Commissioner Dian M. Grueneich April 20, 2006 2 Major Transmission Development in California: Lots of Activity Recently approved+filed+anticipated (CPUC) Over a dozen major transmission projects Would add transfer capability exceeding 8 GW Projected cost near $5 billion Range of Objectives Maintain future reliability Economic – reduce supply and reliability cost Support energy policy objectives such as fuel diversity and environmental benefits

4. Commissioner Dian M. Grueneich April 20, 2006 3 California Transmission Projects in Permitting Process SCEs Devers-Palo Verde 2 Increases import capacity from Arizona in LA Basin by 1,200 MW; projected on-line date Summer 2009; estimated costs $600M SDG&Es Sunrise Powerlink Increases import capacity into San Diego Region on Southwest Powerlink (SWPL) by 1,000 MW; projected on-line date 2010; estimated cost $1-1.4B SCEs Tehachapi Region Projects Provides 700 MW of capacity from wind-rich resource area into LA Basin; initial phases projected on-line date 2009; estimated cost $225M Green Path (joint venture of LADWP, IID, & Citizens) Accesses renewables and increases transfer capacity into San Diego and LA regions; projected on-line date 2010; non-jurisdictional project

5. Commissioner Dian M. Grueneich April 20, 2006 4 Key CPUC Responsibilities Need determination Environmental siting (CEQA, NEPA) Cost recovery & allocation Coordination with generation development and long-term procurement (e.g., RPS)

6. Commissioner Dian M. Grueneich April 20, 2006 5 Challenges Siting Numerous approvals, rerouting tradeoffs Federal lands: Coordination with federal agencies (EIS) Multi-state permitting Mixed CPUC jurisdictional and non-jurisdictional project developers Interaction of projects: physically, financially, and strategically CPUC is streamlining its permitting process

7. Commissioner Dian M. Grueneich April 20, 2006 6 Regional Transmission Siting Efforts Regional planning efforts laudable but individual state permitting laws still valid STEP transmission planning process resulted in both DPV2 & Sunrise projects, now under review in California WECC effort to look at regional planning for economic transmission lines welcome as added technical input In the west, do we have too many regional transmission planning entities? WECC, STEP, RMATS, NTAC, SWAT, SSG-WI, CREPC, WGA, WIEB… Regional efforts need to accommodate state objectives, including California loading order, energy efficiency as top priority, climate change policies, RPS requirements and goals

8. Commissioner Dian M. Grueneich April 20, 2006 7 Energy Action Plan Energy Action Plan adopted by CPUC and CEC (May 2003)* Establishes a loading order of energy resource procurement Energy efficiency and conservation Renewable generation Cleanest available fossil resources Goal: Decrease per capita energy use and reduce toxic emissions and greenhouse gases through increased conservation, efficiency, and renewable resources. Balance cost impacts, resource diversity, and environmental responsibility EAP II adopted by CPUC and CEC (October 2005) Builds on goals and explicitly calls for action on climate change * The EAP can be found at http://www.cpuc.ca.gov/PUBLISHED/REPORT/28715.HTM

9. Commissioner Dian M. Grueneich April 20, 2006 8 GHG Performance Standard CPUC adopted in October 2005.* CEC adopted into 2005 IEPR. Requires IOU energy contracts and generation sources to meet or beat GHG emissions levels of a combined-cycle natural gas turbine for all long-term procurement activities Coal-fired generation must include the capacity to capture and store carbon dioxide safely and inexpensively Consideration of the GHG performance standard will be coordinated with implementation of the load based cap * The GHG Performance Standard Policy Statement is posted at: http://www.cpuc.ca.gov/word_pdf/REPORT/50432.doc

10. Commissioner Dian M. Grueneich April 20, 2006 9 Renewable Potential in California 262,546 GWh 36,086 GWh RPS 20% by 2010: 50,260 GWh Source: Renewable Resource Development Report, California Energy Commission, pp. C-2, C-12, November 2003;Implementing Californias Loading Order for Electricity Resources, Appendix A, Table 1, July 2005

11. Commissioner Dian M. Grueneich April 20, 2006 10 Frontier Line Competitors??

12. Commissioner Dian M. Grueneich April 20, 2006 11 Frontier Line Competitors?? TransWest Express Project