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Please submit your organization’s comments on the 2024-2025 Transmission Planning Process Long-Term LCR 12/9 stakeholder meeting and discussion:
Cal Western comments on 2024-2025 Transmission Planning Process Long-Term LCR Study December 9, 2024, Stakeholder Meeting
California Western Grid Development LLC (“Cal Western”) appreciates the opportunity to submit comments on the CAISO December 9, Stakeholder Meeting regarding the 2024-25 TPP Long-Term LCR Study.
Cal Western has five comments and or requests:
- Clarify which of the CPUC Resource Portfolios are being used in the Long Term LCR Study – Cal Western assumes the CAISO will be using the CPUC Base resource portfolios for 2034 and 2039 to determine LCR needs in the 2024-25 TPP, however that was not clear from December 9 presentation and Cal Western requests clarification.
- Clarify how the CPUC high gas retirement sensitivity portfolio will be used in the Long Term LCR Studies – Cal Western believes the high gas retirement sensitivity portfolio should play at least two important roles in CAISO long term LCR Studies for the 2024-25 TPP. First, CAISO should use the sensitivity portfolio to determine what transmission is needed to maintain local reliability in transmission constrained local areas if gas plants identified for retirement in the sensitivity portfolio are no longer available. Second, the sensitivity portfolio should be used to ‘right size’ transmission solutions that are recommended for approved in the 2024-25 TPP.
- Share with Stakeholders the CAISO RA Cost assumptions that will be used in the 2024-25 Long-Term LCR Studies. When CAISO calculates the LCR benefits of potential transmission solutions using the TEAM Methodology the cost CAISO assumes for both local RA and System RA have a huge impact on B/C ratio of any transmission solutions. CAISO local and system RA cost assumptions must be shared with Stakeholders.
- Share Gas Plant utilization in LCR areas. Cal Western urges CAISO to share with stakeholders the forecast gas plant usage findings from 2024-25 TPP LCR Studies, especially gas plant usage in transmission constrained local areas for years 2034 and 2039. This information is vital to California meeting its environmental goals, including the goal to reduce reliance on gas plants in transmission constrained local areas by 2035. CAISO has not given this information sufficient visibility in the past.
- Review the Pacific Transmission Expansion Project based on its cumulative Economic, Policy, and Reliability benefits, including the LCR benefit to the LA Basin. Cal Western asks CAISO to study the PTEP project and share conclusions on the merits of each of these benefits with stakeholders in the draft 2024-25 TPP draft report.
We will now elaborate and explain the rationale behind our comments and requests above.
Clarify which of the CPUC Resource Portfolios are being used in the Long Term LCR Study
The December 9 stakeholder meeting presented preliminary results for the LA Basin for 2034 and 2039. Cal Western requests clarity on which CPUC resource portfolio was used by CAISO in its LCR Studies for each of those years. The CAISO Phase 1 Study Plan for the 2024-25 TPP says:
“‘The CAISO will augment the 10 year long-term LCR study with LCR results for year 15 driven by potential gas retirements provided in the CPUC’s sensitivity portfolio, for areas of the grid where such retirements are expected to have significant impacts, like Bay Area, LA Basin, and San Diego-Imperial Valley.” – Page 91
Does this mean the LCR long term study results presented on December 9 for the LA Basin and LA Basin sub-areas were based on the CPUC base portfolio for 2034 and the CPUC high gas retirement portfolio for 2039? Was the CPUC base portfolio for 2039 used to derive any of the preliminary results of the long-term LCR studies presented on December 9?
Clarify how the CPUC high gas retirement sensitivity portfolio will be used in the Long Term LCR Studies
The CAISO Phase 1 Study Plan for the 2024-25 TPP says:
“The CAISO will augment the 10-year long-term LCR study with LCR results for year 15 driven by potential gas retirements provided in the CPUC’s sensitivity portfolio” -Page 91
Cal Western urges the high gas retirement portfolio be used in the long term LCR Study in at least two significant ways: First, CAISO should use the sensitivity portfolio to determine what transmission is needed to maintain local reliability in transmission constrained local areas if gas plants identified to be in retirement in the sensitivity portfolio are no longer available. Second, the sensitivity portfolio should be used to ‘right size’ transmission solutions that are recommended for approved in the 2024-25 TPP.
In our view, ‘right sizing’ a project involves looking beyond meeting immediate LCR requirements driven by the 2034 base resource portfolio, and instead finding a transmission solution that not only addresses the need in 2034 when all fossil plants are available, but also meets LCR needs when many of the local gas plants are retired as envisioned in the CPUC high gas sensitivity portfolio.
Share with Stakeholders the CAISO RA Cost assumptions that will be used in the 2024-25 Long-Term LCR Studies.
When CAISO calculates the LCR benefits of potential transmission solutions using the TEAM Methodology the cost CAISO assumes for both local RA and System RA have a huge impact on B/C ratio of any transmission solutions.
Cal Western requests CAISO share the local and system RA Cost Assumptions to be use in the 2024-25 TPP. The CAISO shared RA cost assumptions at the November 17, 2020, CAISO Stakeholder Meeting for the 2020-21 TPP. Please see the following link to Slide 15 from the CAISO 2020-21 TPP Stakeholder Meeting:
2020-2021TPP 11-17-20 Presentation RA Costs.pdf
This slide shows the $/kw/mo. cost the CAISO assumed would be required to procure local and system reliability from existing fossil resources (estimated LCR payments). This is exactly the kind of information Cal Western is seeking for the CAISO 2024-25 TPP.
Cal Western has reviewed the 2024-25 TPP Phase 1 Study plan and has not found this information. If it is available in the Study plan, please share the section and page of the Study Plan where this information can be found.
Share Gas Plant utilization in LCR areas
Cal Western asks that CAISO share with stakeholders the gas plant utilization information that is available from the CAISOs Production Cost Modelling (PCM) runs and LCR study. This can be done in summary form, but the critical information Cal Western is seeking is a forecast of how often retained local fossil generation runs to meet local and system RA plus to the extent information is available how often those fossil resource also run to provide additional energy or ancillary services in the CAISO markets. In other words, we seek a forecast of how often local area gas plants are utilized in 2034 and 2039 for both the CPUC base resource plans and High Gas plant Retirement Sensitivity Portfolio.
This information should be relatively easy for CAISO staff to retrieve from the production cost modelling runs that CAISO undertakes to perform economic studies and LCR studies.
This information is critical to stakeholders. Here is why:
When the CPUC approved the base case resource portfolios that are being used in the 2024-25 TPP they depended on an expectation that as new clean resources are added to the portfolio, gas plants rise in the dispatch stack and generation from gas plants is replaced by new clean resources.
The CPUC said it this way in Decision 24-02-047:
“Over time, the capacity factors of thermal resources continue to decrease over time as their energy output is offset in the dispatch stack by zero marginal-cost renewables.” [1]
However the CPUC understands there is a potential flaw in their logic because gas plants located in transmission constrained local areas may have to run more than their RESOLVE and SERVM models forecast because those CPUC models do not have the granularity to determine if new clean resources added to the portfolio can actually be delivered to the transmission constrained urban areas in California and displace the use of gas plants in those urban areas.
According to CPUC Decision 24-02-047:
“Conducting locational analysis within the context of IRP is difficult, because much of our analysis historically has been focused at the system level. The CAISO, however, has the ability to do much more granular and detailed analysis of local reliability needs. Therefore, we find it prudent to ask the CAISO to conduct this sensitivity analysis for the 2024-2025 TPP.” [2]
We are asking CAISO to share results of the sensitivity analysis the CPUC has requested.
This is especially important because the CPUC has stated that 70% of the gas plants in the base case portfolio being used in this 2024-25 TPP are in transmission constrained local areas. In other words, the CPUC RESOLVE and SERVM models cannot accurately forecast gas plant utilization for 70 percent of the gas plants in the base or sensitivity portfolios.
Review the Pacific Transmission Expansion Project (PTEP) based on its cumulative Economic, Policy, and Reliability benefits, including the LCR benefit to the LA Basin.
The CAISO 2024-25 TPP Phase 1 Study Plans identifies PTEP as one of the study requests it that CAISO received and states:
“The CAISO will evaluate these study requests with consideration of current year’s transmission planning study results” -page 17
Cal Western asks CAISO to evaluate the PTEP project based on the cumulative economic, policy, and reliability benefits, including the LCR benefits to the LA Basin and share conclusions on each of these benefits with stakeholders in the draft 2024-25 TPP draft report.
Benefits of PTEP include significantly reducing LCR needs for the LA Basin, meeting the policy objective of allowing delivery of clean resources into local load centers (especially transmission constrained LA Basin) and providing needed local frequency and voltage support. The environmental benefits of PTEP include reduced CO2 emissions, reduced Nox, Sox and PM2.5 emissions to the benefit of disadvantage communities and the larger LA Basin population. PTEP also reduces exposure to wildfire risks and reduced dependence on Aliso Canyon
Finally, on October 15, 2024, Cal Western submitted the PTEP project as a Request Window Submission for Reliability Assessment in the 2024-25 TPP. (“October 15th Filing”). Our filing provides details regarding the reliability and other benefits provided by PTEP that together make it the optimal reliability solution.
We urge CAISO to evaluate PTEP based on the cumulative Economic, Reliability and Policy benefits that the Project provides. And, based on this assessment, we urge CAISO to approve a subsea transmission project from the Diablo Canyon / Morro Bay area to the existing Coastal transmission system in West LA. We also urge the CAISO to utilize the results of the High Gas Plant Retirement Sensitivity Analysis and the results of the LCR study to “right size” the transmission facilities approved in this 2024-25 TPP.
Thank you for the opportunity to submit these comments for your consideration.
Respectfully submitted on behalf of Cal Western.
Marty Walicki
Managing Member
(240) 277-8968 December 20, 2024.
[1] CPUC February 15, 2024, Decision 24-02-047, Adopting Preferred System Plan, and other matters…. - page 76
[2] Ibid. page 79
