California Treasurer Phil Angelides and a group of consumer advocates, arguing that the private sector has failed to invest in some critical transmission projects, has proposed a plan that would allow the California Power Authority to finance and build upgrades that would otherwise be neglected.
The proposal also calls for the California Energy Commission to adopt a comprehensive 10-year master transmission plan, updated annually, identifying necessary improvements and additions. The CPA had originally been charged with spurring generation growth, Angelides’ proposal would expand the group’s scope to include transmission financing.
Under the plan, the CPA would proceed with a project only after a 60-day notice period during which the state’s utilities and private developers would have the option to decide whether they want to build the project. If not, the agency would be allowed to finance or enter into joint ventures with private sector and public entities to build the improvements or do the work itself. Financing for the projects would come from transmission rates from those using the lines.
Angelides, who is a board member of the CPA, said the agency also would seek a short-term loan from the state to pay for preliminary costs to acquire permits that would allow it to react quickly to the state’s transmission needs. He said that the loan amount has not been determined, but that it would likely be between $ 10-million and $ 20-million.
Angelides said he would present the plan at a joint CPA, CEC and state Public Utilities Commission meeting Friday. He will then work with legislative leaders to enact authorizing legislation.
California must move ahead on its own to fix its transmission problems because the private industry under a deregulated system has not been investing, Angelides said. He feared that the state would be subject once again to the market manipulation, power outages and price hikes seen in 2001. ”The grid has been left as an orphan…Transmission is a neglected afterthought of deregulation,” he said.
David Freeman, who recently resigned as CPA chairman, said that the plan is designed to ”energize” the private companies to start investing more in transmission. ”We hope we will not have to build any lines,” he said. The consumer groups include The Utility Reform Network, Consumers Union, Resources for Independent Living and Foundation for Taxpayer and Consumer Rights.
Angelides said the proposal has yet to be presented to Governor-elect Arnold Schwarzenegger, who is expected to take office this month. The new governor has already proposed dismantling the CPA to encourage private investment in the state’s energy industry. His office did not return calls for comment on Angelides’ plan.