BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA In the Matter of the Application of San Diego Gas & Electric Company (U 902 E) for a Certificate of Public Convenience and Necessity for the Sunrise Powerlink Transmission Project.
Application 06-08-010 (Filed August 4, 2006)
COMMENTS OF THE GEOTHERMAL ENERGY ASSOCIATION ON THE PROPOSED DECISION AND ALTERNATE PROPOSED DECISION
November 20, 2008
John McCaull Western States Representative Geothermal Energy Association 538 Broadway, Suite B Sonoma, CA 95476 Telephone: 707/935-6885 Facsimile: 707/935-6885 Email:
[email protected]
TABLE OF CONTENTS Page Table of Contents................................................................................................................. i I. THE ALTERNATE PROPOSED DECISION, AND NOT THE PROPOSED DECISION, SHOULD BE THE BASIS, IN GENERAL, FOR THE COMMISSION'S DECISION ON THIS CPCN APPLICATION ..............1 II. THE GRUENEICH ALTERNATE PROPOSED DECISION SHOULD BE ADOPTED BY THE COMMISSION, BUT WITH MODIFICATIONS TO THE SUNRISE COMPLIANCE PLAN TO INCLUDE REALISTIC REQUIREMENTS FOR THE VERIFICATION INFORMATION TO BE PROVIDED BY SDG&E ..............................................................................................5 CONCLUSION ...................................................................................................................6
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BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA In the Matter of the Application of San Diego Gas & Electric Company (U 902 E) for a Certificate of Public Convenience and Necessity for the Sunrise Powerlink Transmission Project.
Application 06-08-010 (Filed August 4, 2006)
COMMENTS OF THE GEOTHERMAL ENERGY ASSOCIATION ON THE PROPOSED DECISION AND ALTERNATE PROPOSED DECISION The Geothermal Energy Association (GEA) respectfully submits these comments on the Proposed Decision (PD) and Alternate Proposed Decision (Grueneich Alternate) mailed in application A.06-08-010 (San Diego Gas and Electric’s Sunrise Powerlink Transmission Project) on October 31, 2008. These comments are filed and served pursuant to Article 14 of the Commission's Rules of Practice and Procedure and the instructions accompanying the Proposed Decision.
To facilitate the filing of these comments, the GEA has simultaneously filed and
served today its Motion for Party Status in this proceeding. I. THE ALTERNATE PROPOSED DECISION, AND NOT THE PROPOSED DECISION, SHOULD BE THE BASIS, IN GENERAL, FOR THE COMMISSION'S DECISION ON THIS CPCN APPLICATION. The GEA represents producers of electricity using or developing renewable geothermal resources located in Imperial County and other regions of California and the continental U.S. In a 2006 Report commissioned by the California Energy Commission, it was estimated that there are over 2000 megawatts of geothermal energy that could be developed in Imperial County 1 in a near-term time-frame that would help California retail providers of electricity meet their Renewable Portfolio Standard (RPS) obligations and the ambitious goals of California to 1
“California Geothermal Resource Base: Its contribution, future potential, and a plan for enhancing its ability to meet the states renewable energy and climate goals” (2006), CEC/CIEE Prime Contract No. 500-99- 13 Subcontract No. C-05-29
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dramatically reduce greenhouse gas (GHG) emissions under AB 32 (The Global Warming Solutions Act of 2006). 2 In actuality, the geothermal resource development potential of the Imperial Valley is much greater when technological advances and resource detection improvements are factored in. For example, the University of Utah’s Energy and Geosciences Institute (EGI) stated in their 2005 report to the US Department of Energy that “that the Imperial Valley is unquestionably the Nation’s premier high-temperature hydrothermal province with enormous potential for conventional expansion and even greater scope for Enhanced Geothermal System (EGS) commercialization.” 3 GEA has not taken a position on the preferred environmental route for the Sunrise Powerlink Transmission Project, nor did we comment on the environmental issues associated with the transmission route through the CEQA-NEPA process. GEA also restricts its comments to the 150 mile western portion of the Sunrise Powerlink Transmission Project linking San Diego with Imperial County as described in the October 2008 Final Environmental Impact Report / Environmental Impact Statement and Draft Land Use Plan Amendment’s “Project Description” section. 4 As the state’s Renewable Energy Transmission Initiative (RETI) has shown in its November 5, 2008 Draft Phase 1B Report, the renewable energy “zones” of Imperial County are
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California Health and Safety Code, Division 25.5 (commencing with Section 38500), Chapter 488, Statutes of 2006. Commonly known as AB 32 (Global Warming Solutions Act of 2006), 3 “Low-Angle Extensional Tectonics, Flat Fracture Domains, and Gravity Slides in Hydrothermal and EGS Resources of the Western U.S. (DE-FG36-04GO14296),” Presentation of Principal Investigator, Jeffrey B. Hulen, Energy & Geoscience Institute (EGI), University of Utah, for the DOE Enhanced Geothermal Systems (EGS) Peer Review, Rockville, MD, April 7, 2005. 4 See Section ES.3 “Proposed Project and Project Objectives” of the Final Environmental Impact Report/Environmental Impact Statement and Draft Land Use Plan Amendment, San Diego Gas & Electric Company's Sunrise Powerlink Project, (Applications A.05-12-014 and A.06-08-010), October 2008. http://www.cpuc.ca.gov/Environment/info/aspen/sunrise/toc-feir.htm
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extremely competitive from an economic and environmental “ranking” standpoint. 5 Economic, environmental and load demand calculations have consistently shown the efficacy and suitability of developing Imperial Valley renewable resources and associated transmission infrastructure to ensure that Southern California utilities can meet their 20% procurement requirement for renewable energy by 2010. 6 In addition, the near-term development of geothermal and other resources in the Imperial County region is an essential part of the state’s plan to meet greenhouse gas reduction goals through an expanded renewable energy market. 7 The Commission’s decision on the Sunrise Powerlink Transmission Project should support important statewide goals to promote the development of renewable energy resources. Indeed, in just the last month, the Commission and the California Energy Commission have jointly recommended to the California Air Resources Board (CARB) that, in meeting the greenhouse gas emissions reduction mandate of A.B. 32 for the electricity sector, CARB should adopt requirements that by 2020 at least 33% of California’s electricity needs be met by renewable resources. 8 At the same time, CARB has already acted to incorporate a 33% renewable portfolio standard (RPS) as part of its greenhouse gas emissions reduction measures included in its October 2008 Proposed Scoping Plan. Moreover, just this week, Governor Arnold Schwarzenegger issued Executive Order S-14-08, which calls for an increase in California’s RPS Program target to 33% renewable power by 2020. To achieve this goal, the Executive Order directs “state government agencies” to take “all appropriate actions to implement this target in all 5
See Page 1-3 of the Renewable Energy Transmission Initiative Phase 1B Report, November 2008, http://www.energy.ca.gov/reti/documents/2008-11-05_RETI_Phase_1B_Draft_Report.pdf . 6 See Page 9, California Independent System Operator (CAISO) Report on Preliminary Renewable Transmission Plans. Final Version Updated August 6th, 2008 http://www.caiso.com/2007/2007d75567610.pdf . 7 See Pages C-92, C-93 and C-127, AB 32Draft Scoping Plan, Appendix C: Sector Overviews and Emission Reduction Strategies, http://www.arb.ca.gov/cc/scopingplan/document/appendix1.pdf . 8 Final Opinion and Recommendations on Greenhouse Gas Regulatory Strategies, California Energy Commission and California Public Utilities Commission, October 2008, http://www.energy.ca.gov/2008publications/CEC-1002008-007/CEC-100-2008-007-F.PDF .
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regulatory proceedings, including siting, permitting, and procurement for renewable energy power plants and transmission lines.” The Proposed Decision by Administrative Law Judge Vieth denying the Sunrise Powerlink CPCN is not in keeping with this policy, reaches an untenable decision based on faulty economic theories, and should not be adopted by the Commission as its final decision in this application. The Proposed Decision also effectively continues to strand the undeveloped geothermal and other renewable assets in Imperial County. Moreover, the Proposed Decision would certainly derail efforts in Southern California to bring one of the major IOU’s (SDG&E) closer to compliance with 2010 RPS requirements and AB 32’s GHG emission reduction mandates. In contrast, the Grueneich Alternate recognizes that the Sunrise Powerlink Project’s economic benefits are realizable with the assumption that the state will require a renewable procurement program for all California utilities at 33% RPS levels by 2020. The Grueneich Alternate is the right direction for the Project and for the Commission and the GEA supports this outcome. GEA, therefore, supports the Grueneich Alternate and recognizes and commends the creative and tireless work that Commissioner Grueneich has expended to develop that Alternate. The Grueneich Alternate does an excellent job of reconciling the need for continued protection of California natural resources, while also recognizing the clear economic and environmental benefits of bringing clean and affordable renewable energy to the San Diego region.
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II. THE GRUENEICH ALTERNATE SHOULD BE ADOPTED BY THE COMMISSION, BUT WITH MODIFICATIONS TO THE SUNRISE COMPLIANCE PLAN CONDITIONS TO INCLUDE REALISTIC REQUIREMENTS FOR THE VERIFICATION INFORMATION TO BE PROVIDED BY SDG&E. GEA supports the basic premise and justification for the approval of the Sunrise Powerlink Transmission Project: this Project is necessary for SDG&E to meet its 2010 RPS requirements, and to meet the state’s policy of achieving a 33% RPS standard by 2020. While GEA supports the Commission’s efforts to ensure that the Sunrise Powerlink Transmission Project between San Diego and Imperial County is built for, and dedicated to, providing Imperial Valley renewable electricity generation to the San Diego region, as envisioned by the Grueneich Alternate, the GEA believes that the Alternate must be modified to avoid that any unnecessary delay in transmission construction or creation of lengthy administrative proceedings. In particular, the GEA is concerned about the numerous conditions that the Grueneich Alternate imposes on SDG&E in terms of requiring SDG&E, as part of its Sunrise Compliance Plan to provide very specific information to the Commission on exactly what types of renewable resources will be built where, when, under what control, etc.
The GEA, however, also
recognizes the importance of having some conditions in place that will ensure that the Sunrise Powerlink transmission line will in fact serve as a means to meet California’s aggressive and ambitious renewable energy development goals. The GEA is, therefore, in the process of reviewing changes to Section 19 of the Grueneich Alternate provided in an Assigned Commissioner’s Ruling (ACR) issued on November 18, 2008, which revisions were made in response to similar comments and concerns. GEA is currently in the process of reviewing these changes and will respond, as permitted by the ACR, on December 1, 2008. In addition, GEA plans to comment on a second Alternate
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Proposed Decision by Commissioner Peevey mailed on November 18, 2008. Those comments are due on December 8, 2008. In these further comments, the GEA will indicate its preferences and any suggested modifications to these orders. GEA would like to reassure the Commission that our member companies who have geothermal projects in Imperial Valley are ready to demonstrate the efficacy of their projects, and to help alleviate concerns that transmission built to Imperial County would somehow be “stranded” because the renewable energy generation capacity was not available in a timely fashion. GEA believes that a thorough review by the Commission of what is online, and what could be available for generation from Imperial Valley geothermal resources can go a long way towards assuring the public that the renewable energy is developable and reliable, and that stranded asset concerns can be adequately addressed. 9 CONCLUSION For the reasons stated above, the GEA respectfully requests that the Commission base its decision in this application on the Alternate Proposed Decision and not the Proposed Decision. Recommended modifications to the Alternate Proposed Decision, consistent with these comments, will be provided in response to the ACR issued on November 18, 2008. Respectfully submitted, November 20, 2008
/s/
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JOHN MCCAULL John McCaull Western States Representative Geothermal Energy Association 538 Broadway, Suite B Sonoma, CA 95476 Telephone: 707/935-6885 Facsimile: 707/935-6885 Email:
[email protected]
See, January 2006 Consultant Report, “Building a “Margin of Safety” Into Renewable Energy Procurements: A Review of Experience with Contract Failure” California Energy Commission, CEC-300-2006-004.
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CERTIFICATE OF SERVICE I, John McCaull, am over the age of 18 years and employed in the City of Sonoma, in Sonoma County. My business address is 538 Broadway, Suite B, Sonoma, CA 95476. On November 20, 2008, I served the within document COMMENTS OF THE GEOTHERMAL ENERGY ASSOCIATION ON THE PROPOSED DECISION AND ALTERNATE PROPOSED DECISION, in A.06-08-010 (Sunrise Powerlink), with service on the A.06-08-010 service list in the manner prescribed by the Commission’s Rules of Practice and Procedure and with additional and separate delivery of electronic copies and paper copies by U.S. Mail to Assigned Commissioner Grueneich, her advisor, Traci Bone, and Assigned ALJ Vieth, at Sonoma, California. Executed on November 20, 2008, at Sonoma, California.
/s/
JOHN MCCAULL John McCaull