Common use of TRANSMISSION COST ADDERS Clause in Contracts

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. 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 reviewDG Fairhaven contract amendment; the facility is already interconnected to the grid and operating, 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 continued operation will likely require small or no network upgrades for the Mesquite Solar project to achieve full deliverabilityupgrades.

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 include transmission cost adders in the evaluation its valuation of bilaterally negotiated contracts, and did not use either a TRCR adder adder, an estimate of the cost of network upgrades from an interconnection study, or an estimate of the cost of alternative commercial arrangements in evaluating the SGS-1 CMS2 contract. In its independent review, Xxxxxx assessed the valuation of the SGS-1 CMS2 contract relative to market price at the SP-15 zone and included an estimate of network upgrade costs allocated to the CMS2 project from a proxy cost for the potential need for network upgrades for the Mesquite Solar project to achieve full deliverabilityCAISO study.

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 Xxxxxx XX contract. In its independent review, Xxxxxx assessed the valuation applied an estimate 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 deliverabilityupgrade costs directly within its valuation.