Power line benefits downsized; project expected to save customers $85 million a year, not $447 million

North County Times 1/24/07
By DAVE DOWNEY - Staff Writer

NORTH COUNTY -- A large power line San Diego Gas & Electric Co. wants to string across the backcountry of San Diego and Imperial counties would deliver only a fraction of the savings the utility earlier said it would provide, according to a new report.

When the utility filed its application Aug. 4 with the California Public Utilities Commission seeking the green light to build a $1.3 billion transmission line, SDG&E estimated the project would save California electric ratepayers $447 million a year.

But now, according to a Friday filing with the commission, SDG&E estimates the savings to electric customers around the state would total $85 million annually over the 40-year life of the project between 2010 and 2050.

SDG&E says the substantial reduction was triggered by miscalculations about the cost of natural gas -- the fuel for many power plants -- and about the efficiency of plants, as well as a wrong assumption that some power plants would switch from natural gas to oil because of oil's lower cost. In California, officials said, oil plants may be fired up only in emergencies.

The reduction follows much suggestion from project opponents in recent months that the utility was exaggerating benefits.

"It's pretty much the opposite of what SDG&E represented a couple of months ago about the economic benefits of the Sunrise power line," said Michael Shames, executive director for the San Diego ratepayer advocacy group Utility Consumers' Action Network.

"It just goes to show how quickly SDG&E's case for its power line is crumbling," Shames said.

Jim Avery, vice president of electric for SDG&E, countered that its case for Sunrise is "not at all" crumbling.

"That's kind of funny, actually," Avery said. "It's just simply not true. When you look at this case in the context of SDG&E customers, the economic benefits are overwhelming."

Avery said the utility is still refining its projections and expects to file in a couple of days another revision that will boost the statewide benefit. Regardless of what the final statewide figure comes to, he said he is sticking by earlier public statements that SDG&E customers collectively would save more than $100 million a year on electric bills if the line is built.

SDG&E's customers include 1.2 million homes and 100,000 businesses in San Diego County and southern Orange County.

The region's electricity supply totals 4,600 megawatts, and that capacity was nearly exceeded on a particularly hot and muggy day last July. The utility says it needs another 1,000 megawatts by 2010 to meet the region's growing demand, and that is how much power Sunrise Powerlink would deliver.

A megawatt is the standard measuring unit for electricity. Most of the time it is enough to keep the lights on in 750 to 1,000 homes, although much more power is needed in summer to keep air conditioners humming.

The Sunrise proposal is for a 150-mile transmission line that would wind its way north and west from El Centro in Imperial County, cross the Anza-Borrego Desert State Park, and slice through Ranchita, Santa Ysabel, Ramona and Rancho Penasquitos on its way to the coast. The system would carry 500-kilovolt and 230-kilovolt wires on giant metal towers as tall as 150 feet, while parts of it would be buried in the ground in residential areas.

Construction would begin in 2008 and wrap up in 2010. But first the utility must obtain permission from the Public Utilities Commission, which is expected to complete an environmental analysis in August and deliver a decision in January 2008.

Besides shoring up a looming shortfall, SDG&E says the project would improve the reliability of San Diego County's power supply by providing another way for electricity to get into the county. Like congested freeways, the existing transmission lines along the coast and Interstate 8 have trouble delivering all the power the region needs at times, SDG&E officials say.

Officials also say that the project would plug San Diego County into an emerging mecca of nonfossil-fuel power in the Salton Sea area, where solar farms and geothermal plants that tap underground geysers are proposed. Like other major utilities in Calfornia, SDG&E is facing a state deadline of providing 20 percent of its power from such sources, called renewable energy, by 2010.

"Keep in mind, it (Sunrise) didn't have to provide economic benefits," Avery said. "All it had to do was improve reliability and provide access to renewables. Even if the economic benefits were zero, the project would still be beneficial."

But as it is, Avery said, the project still would save customers money on their monthly bills.

However, Shames, of the utility consumers organization, said his group's calculations show a move to fill the future gap by building new modern power plants locally would save customers $61 million a year more than Sunrise would.

Avery disagreed. "That is simply comparing apples and oranges," he said.