SCE to spend $1billion/year on transmission in California

Transmission lines, Southern California (source: flickr/ Curtis Gregory Perry, creative commons)
Alexander Richter 8 May 2010

Southern California Edison to spend more than US$1 billion per year over the next 5 years from transmission projects in Southern California, which will help to transmit electricity from wind, solar and geothermal power plants.

Reported from California, “Edison International’s (EIX) chief executive said Tuesday that the company’s utility plans to spend more than $1 billion a year over the next five years on transmission, including a half-completed $1.8 billion project in southern California.”

This is definitely good  news as transmission will be a major issues for getting electricity to customers from renewable energy projects in California and neighboring states.

“Southern California Edison recently completed the first leg of a 250-mile series of transmission lines and substations between the wind-swept Tehachapi Valley northeast of Los Angeles and Los Angeles and San Bernardino County. When completed, the Tehachapi Renewable Transmission project will be able to ship 4, 500 megawatts of wind, solar and geothermal power from remote areas of southern California to population centers in and around Los Angeles. State and federal regulators approved Edison’s plan to develop the project and recover the costs up-front from customers in a departure from conventional transmission financing.

Edison CEO Ted Craver said the novel financing approach allowed the project to move forward and could be instrumental in pushing future transmission projects forward.

“I think this same process could be replicated and it would be a major benefit to getting solar from the desert and wind from remote locations,” Craver said in an interview. “It is a very good model for what we’re trying to get accomplished here in California.”

California Gov. Arnold Schwarzenegger and other state and federal officials attended a ribbon-cutting ceremony in Mojave, Calif., to celebrate the opening of the first part of the Tehachapi line.

“Our bold and innovative policies have made California a world leader in renewable energy, green jobs and environmental protection, and this project is tangible evidence that we are fulfilling our renewable energy promise,” Schwarzenegger said.

SoCal Edison plans to start construction on the second half of the Tehachapi project later this year, pending approval of permits by federal land agencies including the U.S. Forest Service. The company expects to complete the project by 2015.

The utility has other transmission projects in the pipeline, including a $537 million, 150-mile line between Desert Hot Springs and Romoland that state regulators have approved, and a 35-mile line between Blythe, Calif. and Boulder City, Nev. estimated to cost $450 million, which is awaiting approval. SoCal Edison plans to spend about $5.5 billion on those and other transmission projects over the next years.

Craver noted that the California Public Utilities Commission estimated that 11 new transmission lines will need to be built over the next several years for the state to meet its renewable-energy mandates, and he said Edison plans to develop a good chunk of them. The company is focused on developing transmission, rather than renewable energy facilities, to meet growing California demand for renewables.

Edison’s wholesale power generation business, Edison Mission Group, is also considering developing transmission projects as part of plans to develop renewable energy facilities, Craver said. The unit owns 1,700 megawatts of wind farms operating or under construction in 16 states and more than 7,500 megawatts of coal-fired power plants in the Midwest.

California law requires the state’s investor-owned utilities to use renewable sources for a fifth of the power they sell by the end of this year, with the mandate set to expand to one-third renewables for all the state’s utilities by 2020.”

Source: Wall Street Journal via Nasdaq