April 12, 2005
California-Arizona Project would add transmission facilities
to import additional lower-cost electricity into California
ROSEMEAD, Calif., April 12, 2005—Southern California Edison (SCE) has applied to the California Public Utilities Commission (CPUC) for authorization to construct the Devers-Palo Verde2 (DPV2) Project, which will include a 230-mile, high-voltage electric transmission line between California and Arizona to provide California electricity customers with greater access to low-cost, surplus generation in Arizona.
If approved, DPV2 would provide southern California with an additional 1200 megawatts of cost-effective electricity. The new, high-voltage line would also require upgrades to some of SCE’s existing electrical transmission facilities in California.
SCE’s application filing follows recent approval of the DPV2 Project by the California Independent System Operator (CAISO), which manages the bulk of the state’s electric transmission system. The CAISO shares SCE’s view that DPV2 is a necessary and cost-effective addition to the California power grid. The CAISO has estimated that DPV2 could save California ratepayers an average of $84 million annually during most years. These annual savings could grow if electricity costs from other sources rise because of a shortage of hydropower or a jump in natural gas prices.
Beyond its quantifiable savings, DPV2 would:
- increase energy producers’ access to the California energy market and would provide an incentive for new generation development;
- enhance the competitive market among energy suppliers to California;
- provide increased operational flexibility for dealing with unexpected outages of major generation and transmission facilities, and will reduce transmission congestion, and
- provide significant insurance value for California consumers by mitigating potential price increases resulting from droughts that impact hydro production, heat storms that create high peak demand for electricity or rapid population growth that increases overall demand for electricity ahead of California supply.
Ronald Nunnally, SCE director of federal regulation and contracts, said that SCE believes that a solid, robust transmission system is essential to providing customers with reliable and affordable power.
“DPV2 is the kind of major regional transmission expansion needed to strengthen the transmission system in the western United States,” Nunnally said. “Over the next 10 years, SCE plans to make significant investments to expand and upgrade its transmission and distribution facilities.”
The proposed DPV2 Transmission Project is one element of SCE’s effort to meet future electricity needs of its customers, including encouraging energy efficiency, increasing SCE’s procurement of renewable energy and building and maintaining reliable electrical transmission and distribution systems to deliver power to customers.
SCE will also file an application with the Bureau of Land Management for authorization to construct the DPV2 Project on federal land. Later this year, SCE will file with the Arizona Corporation Commission for permission to construct DPV2 in Arizona. The DPV2 Project is estimated to cost $680 million and is expected to be in operation by summer 2009.
It is important for SCE to file the application for the DPV2 transmission project in a timely manner because of the lead time necessary to obtain regulatory approvals and to construct this project.
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An Edison International (NYSE:EIX) company, Southern California Edison is one of the nation’s largest electric utilities, serving a population of more than 13 million via 4.6 million customer accounts in a 50,000-square-mile service area within central, coastal and Southern California.