1. Cooperation on Regional Siting: How Is It Working - A California Perspective Dian M. Grueneich, Commissioner California Public Utilities Commission National Electricity Delivery Forum February 15, 2006

2. Commissioner Dian M. Grueneich February 15, 2006 1 Overview California’s reliance on transmission imports Proposed California transmission projects Federal and regional transmission efforts California’s siting challenges Conclusions

3. Commissioner Dian M. Grueneich February 15, 2006 2 California’s Reliance on Imported Electricity

4. Commissioner Dian M. Grueneich February 15, 2006 3 Proposed California Transmission Projects SCE’s 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&E’s 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 SCE’s 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 February 15, 2006 4 Devers-Palo Verde 2 Vista Devers Hassayampa Existing DPV1 Valley Serrano Upgrade existing 230kV Transmission Lines and Substations Palo Verde Harquahala CaliforniaArizona Mexico Pacific Ocean San Diego Los Angeles Phoenix 500 kV New DPV2 Mountainview San Bernardino

6. Commissioner Dian M. Grueneich February 15, 2006 5 Sunrise Powerlink

7. Commissioner Dian M. Grueneich February 15, 2006 6 Tehachapi Region Projects

8. Commissioner Dian M. Grueneich February 15, 2006 7 Green Path LADWP Transmission Project IID/Citizens San Felipe Project IID Transmission Upgrades ARIZONACALIFORNIA

9. Commissioner Dian M. Grueneich February 15, 2006 8 Recent Challenges for California Project Siting Coordination with federal agencies (e.g., slow federal agency response) Ensure project proponents are ready (e.g., delay in receiving environmental work despite submitted applications) Statutory obligation for both California ISO and CPUC to determine project need Ensure necessary state-based ratemaking for transmission projects for renewables absent federal policy Renewables projects have different development pattern than traditional central station generation Renewables “trunklines” needed as alternate designation to network vs. gen-tie upgrade

10. Commissioner Dian M. Grueneich February 15, 2006 9 Regional Transmission Siting Efforts Regional planning efforts laudable but planning at this level holds more promise than siting due to individual state laws 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, SWAP, SSG-WI, CREPC, WGA, WIEB… Regional efforts need to accommodate state objectives, including RPS requirements and goals

11. Commissioner Dian M. Grueneich February 15, 2006 10 How to Translate Good Regional Planning Efforts into Good Siting Processes? Good siting processes requires diligent project management at the state level Coordination, communication and cooperation among involved states & agencies Robust process makes the final determination legally sound, critical for large infrastructure investments Must coordinate with other state and federal agencies National Interest Corridors not enough as they will not cover all project possibilities and proposals California’s 12 month statutory timeline for project review presents no conflict with EPAct 2005 federal backstop siting authority

12. Commissioner Dian M. Grueneich February 15, 2006 11 Conclusions Regional planning efforts can identify needed projects Need coordination with federal agencies beyond National Interest Corridors Siting requires good project management and focused state permitting staff, not just good institutional relationships (those help too) Need federal ratemaking flexibility to accommodate state policy objectives, especially for renewables