Download Regional and Local definitions.

Order 1000 Implementation
Draft Tariff Language
PG&E Comments
September 5, 2012
Regional and Local definitions.
The draft Tariff language should but fails to capture the salient distinction between Regional and Local
Transmission Facilities: cost allocation. See Order 1000, P. 63. The Tariff should plainly state that
Regional Transmission Facility costs are recovered through the region-wide Regional Access Charge,
and that Local Transmission Facility costs are not. This fundamental distinction between Regional and
Local Facilities should be reflected in the definitions:
Regional Transmission Facility - A transmission facility that is owned by a Participating TO or
to which a Participating TO has an Entitlement that is represented by a Converted Right, that is
under the CAISO Operational Control, and that is not (1) a Local Transmission Facility or a
Location Constrained Resource Interconnection Facility, and supporting facilities, or (2) a
Merchant Transmission Facility. Regional Transmission Facility costs are recovered though the
Regional Access Charge.
Local Transmission Facility - A transmission facility that is (1) under the CAISO Operational
control, (2) is owned by a Participating TO or to which a Participating TO has an Entitlement that
is represented by a Converted Right, (3) operates at a voltage below 200 kilovolts, and (4) only in
the case of a transmission facility approved in the final 2013/2014 comprehensive Transmission
Plan and thereafter, is located entirely within a Participating Transmission Owner’s footprint or
PTO Service Territory. Local Transmission Facility costs are not recovered though the Regional
Access Charge.
The fourth numbered item in the proposed definition of Local Transmission Facility is inconsistent with the
discussion during the stakeholder process on this matter, which culminated with the July 10 “Draft Final
Proposal.” Specifically,
In the previous version of this paper, [CAISO took an approach that] led the ISO to identify
the possible instance where a new line below 200 kV interconnected the service territories of
two participating transmission owners … could be viewed as a regional project and be eligible
for regional cost allocation. This potential outcome was a cause for concern among many
stakeholders because it suggested to some a larger scope for including projects in the
regional category, with a resulting upward pressure on the transmission access charge.
Some of these same stakeholders suggested that the ISO reconsider such an approach and
instead treat all new projects at or above 200 kV as regional and those below 200 kV as
local.
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A variation of the ISO’s approach focusing on interconnections (as set out in the previous
version of this paper) was advocated by one party in the original transmission access charge
proceeding mentioned above. It argued that certain low voltage facilities that interconnected
with another control area should be treated as regional. In that proceeding, the ISO opposed
the establishment of a functional test as administratively unworkable, potentially requiring an
analysis of every transmission line. FERC staff agreed with the ISO that a bright line test was
preferable, as did the Administrative Law Judge. FERC affirmed the rejection of this
functional test. [See FERC Opinion No. 478, 12/21/2004, PP. 40-42, 47-49.
http://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=10345791]
Therefore, upon consideration of stakeholder comments received in response to the previous
version of this paper, the ISO is persuaded that it should not now adopt a test that was
previously rejected on all levels. The ISO proposes in this draft final proposal to retain the
present 200 kV criterion as the basis for the split and simply revise the tariff to (1) make clear
that high voltage transmission facilities are synonymous with regional transmission facilities
and low voltage transmission facilities are synonymous with local transmission facilities…
The fourth numbered item undermines the stated objective of minimizing upward pressure on the
transmission access charge, by treating all new projects below 200 kV as local. CAISO implementation of
Order 1000 and 1000-A does not require elimination of the long-standing, simple and clear 200 kV “bright
line” for allocating the cost of CAISO Controlled Grid facilities. I.e., cost of facilities above 200 kV are
allocated across the entire CAISO grid to all grid users; cost of facilities below 200 kV are no so allocated.
Similar to the position taken by the CAISO described in Opinion 478, PG&E believes that the
establishment of a functional test for Local Transmission Facilities would be require an analysis of every
transmission line, and further, would be administratively burdensome. Relatively small transmission
projects should not be subject to the substantial administrative requirements of Transmission Planning
Process Phase 3 of Tariff Section 24.5.
Accordingly, PG&E believes that the fourth numbered item in the Local Transmission Facility definition
should be removed:
Local Transmission Facility - A transmission facility that is (1) under the CAISO Operational
control, (2) is owned by a Participating TO or to which a Participating TO has an Entitlement that
is represented by a Converted Right, and (3) operates at a voltage below 200 kilovolts, and (4)
only in the case of a transmission facility approved in the final 2013/2014 comprehensive
Transmission Plan and thereafter, is located entirely within a Participating Transmission Owner’s
footprint or PTO Service Territory. Local Transmission Facility costs are not recovered though
the Regional Access Charge
Competition for Facilities Where Construction Responsibility Division
is not Reasonable
The basis for and meaning of the last sentence of Section 24.4.10 remains unclear. Based on the
explanations provided on the August 21 conference call, PG&E understands that CAISO Staff intended to
refer to transmission projects that include both Regional and Local Transmission Facilities for which the
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CAISO might determine that it would be unreasonable to allocate construction responsibility for the
Regional and Local Facilities to two different sponsors. If so, then PG&E suggests that the Tariff
language be written to reflect that intent:
A Participating Transmission Owner will have the responsibility to construct, own, finance, and
maintain any Local Transmission Facility deemed needed under this section 24 that is located
entirely within such Participating Transmission Owner’s PTO Service Territory or footprint. The
provisions of Section 24.5 will apply to a Regional Transmission Facility deemed needed under
this section 24., including Section 24.5 will also apply any transmission upgrades or additions
that are associated with include both Regional Transmission Facilities and Local Transmission
Facilities but for which the CAISO determines that it is not reasonable to divide construction
responsibility among two sponsors.
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