TRANSMISSION COST ADDERS. The cost of transmission to move power from a project offered in the solicitation to PG&E retail customers is considered twice in the process of market valuation. In the first ranking of Offers by market value, projects whose delivery points are outside the control area of the California Independent System Operator (or “CAISO”) (such as projects interconnecting to other utilities’ grids in the Pacific Northwest or the desert Southwest, or those within California that interconnect to the grids of utilities that are not CAISO members) are loaded with a proxy estimate of cost to transmit power from the delivery point to the border of the CAISO for firm delivery. In the second step, the methodology takes into account the possible need to upgrade the transmission network in order to accommodate the increment of new renewable generation in locations (clusters) that may require significant capital outlay, either by PG&E or by other IOUs. Each California IOU publishes a Transmission Ranking Cost Report (TRCR) which identifies clusters that would require network upgrades to accommodate some level of new generation, and estimates a proxy for the cost of upgrades and the amount of new generation that would trigger the need for upgrades. If a CAISO interconnection study has been completed, the team can use the more specific estimate of transmission network upgrade costs identified in the study rather than the TRCR proxy. PG&E does not use TRCR adders in the evaluation of bilaterally negotiated contracts, and did not use either a TRCR adder or an estimate of the cost of alternative commercial arrangements in evaluating the SGS-1 contract. In its independent review, Xxxxxx assessed the valuation of the SGS-1 contract relative to market price at the SP-15 zone and included a proxy cost for the potential need for network upgrades for the Mesquite Solar project to achieve full deliverability.
TRANSMISSION COST ADDERS. The cost of transmission to move power from a project offered in the solicitation to PG&E retail customers is considered twice in the process of market valuation. In the first ranking of Offers by market value, projects whose delivery points are outside the control area of the California Independent System Operator (or “CAISO”) (such as projects interconnecting to other utilities’ grids in the Pacific Northwest or the desert Southwest, or those within California that interconnect to the grids of utilities that are not CAISO members) are loaded with a proxy estimate of cost to transmit power from the delivery point to the border of the CAISO for firm delivery. In the second step, the methodology takes into account the possible need to upgrade the transmission network in order to accommodate the increment of new renewable generation in locations (clusters) that may require significant capital outlay, either by PG&E or by other IOUs. Each California IOU publishes a Transmission Ranking Cost Report (TRCR) which identifies clusters that would require network upgrades to accommodate some level of new generation, and estimates a proxy for the cost of upgrades and the amount of new generation that would trigger the need for upgrades. If a CAISO interconnection study has been completed, the team can use the more specific estimate of transmission network upgrade costs identified in the study rather than the TRCR proxy.
TRANSMISSION COST ADDERS. The cost of transmission to move power from a project offered in the solicitation to PG&E retail customers is considered in the process of market valuation. The methodology takes into account the possible need to upgrade the transmission network in order to accommodate the increment of new renewable generation in locations (clusters) that may require significant capital outlay, either by PG&E or by other IOUs. Each California IOU publishes a Transmission Ranking Cost Report (TRCR) which identifies clusters that would require network upgrades to accommodate some level of new generation, and estimates a proxy for the cost of upgrades and the amount of new generation that would trigger the need for upgrades. If a CAISO interconnection study has been completed, the team can use the more project-specific estimate of transmission network upgrade costs identified in the study rather than the TRCR proxy. PG&E does not use TRCR adders in the evaluation of bilaterally negotiated contracts, and did not use a TRCR adder in evaluating the HLP contract amendment; the facility is already interconnected to the grid and operating, and continued operation will likely require no network upgrades as long as the QF continues operating under its existing agreement, which includes a CPUC-jurisdictional interconnection.
