The California Independent System Operator Corporation (California ISO) Board of Governors Operations Committee has approved, and sent to the Board's consent calendar, three major improvements that will strengthen the transmission grid in northern California. The trio of transmission projects will also reduce the cost of managing transmission bottlenecks and maintaining adequate generation for local reliability by approximately $30 million per year. Combined with four smaller projects that did not require Board approval, the grid enhancements will add transmission capacity and reduce local generation needs by 700 MW.

The California ISO worked closely with Pacific Gas and Electric (PG&E) to identify these three projects as potentially providing significant economic and reliability benefits:

  • New Vaca Dixon 500/230-kV transformer (on-line, December 2007)
  • Re-conductor Vaca Dixon-Tulucay-Lakeville 230-kV lines (on-line May 2010)
  • New Oakland C-X #2 115-kV underground cable (on-line May 2010).

The California ISO staff performed engineering and economic studies on these three projects and found they would provide significant benefits. The Board's approval is an important step in the lifecycle of a transmission proposal. Since it began operating the grid in 1998, the California ISO, working with a variety of stakeholders, has performed technical and economic analyses that paved the way for 340 transmission projects, representing approximately $4.5 billion in investments. Additional projects representing $3 billion to $5 billion more in infrastructure investment are under review.

Recent investments are paying big dividends, reducing reliability costs to California consumers by a total of $416 million in 2005 compared to 2004. Reliability costs include a variety of payments made to power plant owners to ensure the reliability of the transmission grid. The reduction in reliability costs was the result of a combination of new investment in transmission, implementation of automatic tools to increase the carrying capacity of the grid and enhanced operating procedures. More details about the reduction in reliability costs can be found in the 2005 Annual Market Issues and Performance report.

The California ISO is taking an integrated approach to transmission planning process, looking at proposed transmission projects on a regional basis to see how each one will interact with other proposals in the area in providing economic and reliability value to the California ratepayers in the ISO footprint.

The overall goal is to approve projects that give consumers the biggest bang for the buck.