The purpose of the proposed Coolwater-Lugo Transmission Project (“Coolwater-Lugo”) is to provide additional transmission capacity to help alleviate the 220 kilovolt (“kV”) transmission bottlenecks between both the existing Kramer Substation (at the junction of State Route 58 and State Route 395) and Lugo Substation (in Hesperia) and between the Lucerne Valley area and Lugo Substation. Additionally, Coolwater-Lugo will facilitate the interconnection of renewable generation projects, accommodate future electricity demand in the High Desert Region, particularly in the Town of Apple Valley, and improve electric system reliability. As part of the Renewable Energy Transmission Initiative and the Desert Renewable Energy Conservation Plan, the Mojave Desert areas have been identified to be rich solar and wind resource areas.
Coolwater-Lugo will also have significant benefits for the High Desert Region by accommodating future electricity demand and improving electric system reliability.
If Coolwater-Lugo is not built, existing transmission constraints will remain, making it more difficult for utilities, 3rd party generators, and the military to meet state, federal, and Department of Defense renewable energy goals. Large scale renewable projects in the area, depending on the Coolwater-Lugo upgrade, will not be able to deliver their full output to the electric grid. However, renewable projects requesting interconnection into the existing local lower-voltage distribution system, not served by Coolwater-Lugo, may not be affected.
Although SCE is a part of the California Independent System Operator (CAISO) electric grid, which includes other utilities, the Coolwater-Lugo Transmission Project is not being built specifically to supply energy to customers outside of SCE’s service territory. This upgrade is being built to create a new transmission path for power to flow from the Kramer Junction and Lucerne Valley areas into Hesperia and onto the Ontario area, while also facilitating the need to accommodate future electricity demand in the High Desert Region.
Other utilities can purchase power from generators located inside SCE’s Service Territory, but physics will dictate the actual flow of power on the electric grid irrespective of who buys the power. Due to the physics of the electric grid in the area of the Coolwater-Lugo Transmission Project, it is unlikely that power transmitted on this upgrade will supply energy to customers outside of SCE’s service territory.
SCE began planning Coolwater-Lugo in 2008. Coolwater-Lugo is not being constructed in order to replace power lost due to the closure of SONGS. Coolwater-Lugo is being constructed in order to connect renewable resources to the electric grid, improve reliability, and address future demand for electricity in the High Desert area. With SONGs retired, SCE is in the process of making approximately $100 million in reliability investments, most of which are in south Orange County.
SCE has a goal set by the State to have 33% of electricity from eligible renewable energy resources sold to customers by 2020. This target is referred to as the Renewables Portfolio Standard (RPS). In 2013, SCE purchased 21.6% of total electricity from eligible renewable resources for its customers.
SCE does invest in rooftop solar. However, transmission lines are still needed for reliability of the grid. Additionally, transmission lines, like Coolwater-Lugo, help SCE to bring renewable energy from locations where renewable resources, such as wind and solar, are abundant to SCE’s customers. This helps SCE to meet the State’s progressive renewable energy targets, which cannot be met with rooftop solar alone.
SCE does not believe the AV Clearview Transmission Proposal is a viable alternative to Coolwater-Lugo because this proposal does not meet key Coolwater-Lugo Project objectives, which include alleviating transmission constraints, accommodating future electricity demand, and improving reliability. SCE concurs with previous analysis performed by the CAISO that states the AV Clearview proposal is not on its own an equivalent substitute for the Coolwater-Lugo 220 kV line in the context of the ISO Generation Interconnection study process, that with the Coolwater-Lugo 220 kV line project, the likelihood of needing additional transmission is lower than with the AV Clearview proposal by itself, and that the AV Clearview proposal would overload multiple existing transmission lines on the SCE system.
SCE’s proposed project is estimated to cost $509 million. SCE is recommending a 35% contingency based upon past experience, for a total cost of $687 million. SCE is recommending constructing the improvements that are needed in the immediate future. Additional improvements will be needed at some future point in time. The eventual full build-out of Coolwater-Lugo is estimated to cost an additional $185 million, plus a 35% contingency, for a total additional cost of $250 million.
The vast majority of costs for this Project are subject to the jurisdiction of the Federal Energy Regulatory Commission (FERC). SCE recovers FERC-jurisdictional costs through its transmission formula rate, which provides a framework for ensuring that rates to customers are just and reasonable. The remaining costs are subject to the jurisdiction of the CPUC. SCE recovers CPUC-jurisdictional costs through rates that are determined in general rate case proceedings, where we receive recovery of costs in rates only if we can show that the costs are just and reasonable. In both jurisdictions, SCE has incentive to effectively manage the incurrence of costs.
SCE identified a study area that included the three critical points for the Project: Coolwater Substation, Lugo Substation and the Lucerne Valley. Our engineers looked for route alternatives, focusing on locations that paralleled existing roads and/or existing overhead utilities, and our own existing transmission corridors. In places where we could not use our existing transmission corridors or did not have an existing transmission corridor, we considered route alternatives looking at their potential impacts to the environment, existing and planned development, the topography/terrain, roadway access, scenic areas, and recreation uses, among other factors. We held multiple outreach meetings in the communities to gather comments and feedback on the study area and the various potential route alternatives. Weighing the above considerations with the technical needs for the project, we narrowed down to the various alternative segments submitted in our application.
SCE has a strong commitment to the protection of the environment. SCE biologists work closely with relevant agencies to design the project so that potential impacts to the environment are avoided where feasible and minimized where unavoidable. Environmental surveys for biological and cultural resources are conducted by SCE during the application and licensing process.
In compliance with California and federal environmental laws, the CPUC and BLM will prepare a joint Environmental Impact Report/Environmental Impact Statement (EIR/EIS) that evaluates the potential impacts to a series of criteria, including biological resources (plant and animal species), cultural resources (Native American and historic resources), air quality, noise, aesthetics, and water quality, among others.
Prior to construction, SCE will conduct environmental training for all construction personnel and will schedule construction to avoid critical life cycles for certain species. During construction, SCE will utilize on-site biological/archaeological monitors in sensitive areas and will use construction techniques to minimize disturbance to sensitive habitats.
Factors that influenced the siting of Desert View Substation in the proposed and alternate locations included proximity to existing transmission facilities, proximity to existing and future electrical demand, setback from Highway 18, civil engineering considerations, such as drainage, land use, location of existing underground pipelines, and environmental considerations, such as protected or endangered plant and animal species, and cultural resources.