UCAN's executive director debunks need for SDG&E's Sunrise Powerlink

By: North County Times editorial board
North County Times July 7, 2007

Michael Shames, executive director of the Utility Consumers' Action Network, met with the North County Times' editorial board on June 19 to discuss San Diego Gas & Electric's proposed Sunrise Powerlink. Below is a transcript of that meeting. In addition to Shames (MS), the meeting included Bill Powers of Powers Engineering and the Border Power Plant Working Group; former Publisher Dick High (DH), Managing Editors Dan McSwain (DM) and Rusty Harris (RH); Opinion Editor Denis Devine (DDevine); Assistant Opinion Editor Joe Sheffo; and reporter Dave Downey.

An audio recording of the meeting can be accessed at http://www.nctimes.com/opinion/.

DDevine: I was hoping you could start by bringing us up to date on what you feel are the most important things people need to know right now about where the Sunrise Powerlink proposal is and what folks ought to know right now about its status ... .

MS: We are about to begin an evidentiary phase in which there are going to be hearings, held here in San Diego, overseen by an administrative law judge, and that judge will be hearing the cross-examination of witnesses from SDG&E, the local utility company, from the Public Utilities Commission staff, from UCAN and UCAN's experts, and from the California System Operator, which is an independent system operator that runs the transmission lines throughout the state.

DDevine: UCAN has filed an opposition paper response, with alternatives to what SDG&E wants to do with the Sunrise Powerlink....how can you develop your proposals about what the utility should do? What are you basing your information on, and, for the average listener or reader, how do you know better than the utility about what they can provide, what they should do?

MS: Fair question. Well, oddly enough, some of my best information...was from SDG&E employees, former and present, who immediately alerted me to the fact that the claims made in SDG&E's support for this power line were bogus.

I was surprised, because on the face of it, it looked like a pretty good plan, aside from the fact it goes through a state park....

But immediately I was tipped off to the fact that the claims were bogus and that SDG&E had essentially fabricated a justification for a line and that it wasn't economic....

It's not just us, UCAN, that's determined that this line is not what SDG&E has held out to be. The PUC [California Public Utilities Commisison] staff has done a similar analysis, although far less comprehensive, and came to the same conclusion....

DM: I still don't know what to think about this power line, but my hunch is, is that it's a lot like the Sprinter light rail. We don't need it now, nobody's going to ride it, it's grievously expensive, but 20 years from now, we're going to be really glad we have it, when Highway 78's a parking lot. My hunch is the power line's the same thing. So why not build it now?

MS: Great question. Great question. Is this the kind of infrastructure that may not be perfectly useful now, but we're going to grow into it...?

Here's the compelling reason why you don't. Because in the mass-transit paradigm you discussed ---- building trains, building corridors, mass transit ---- there are some compelling reasons to believe that that line is going to be very valuable [in] 20, 30, 40 years....

The exact opposite is occurring in the energy industry. The technologies that are developing in the energy industry are moving towards centralized or distributed generation, where people will be generating their own power, as opposed to relying on the paradigm that we've used over the last 200 years, which is big, old power plants being built off somewhere outside the urban areas, and then these large transmission lines bringing power into the urban areas.

And so many people in the industry view these transmission lines as being obsolete in 20 years, as opposed to more valuable in 20 years....

DDevine: Let's go back to the mass-transit paradigm you mentioned. If it no longer becomes, we need to commute to work on those freeways, we all work at home, those freeways...will still find a use. Transport, industry will adapt, because all of a sudden you have this infrastructure built, paid for, that exists to serve another component of the economy. If SDG&E doesn't need to move these electrons to these homes, to our businesses, isn't it reasonable to conclude that those electrons will still move somewhere? That SDG&E will be able to recoup its investment by some usage of those electrons of that infrastructure if it's built now?

MS: Honestly, no. In fact, SDG&E has no incentive to use those lines, because its only interest, and the way it makes money, is by building them. That's it. They don't care if those lines ever get used. There's no economic incentive for them to do so. Simply, they make their money, and it's a lot of money, as you see in our testimony, $780 million guaranteed, once they build that line....

DH: Twenty-five years ago...I became convinced that PV [photovaltaic cells] were just around the corner....at that time it was something like, I'll make a guess, three times, five times the price of power....fast-forward 25 years and it's still three times as expensive....it's made no headway, even though the price of basic power has gone up dramatically....so I'm skeptical that you're going to have that kind of revolution as fast as this is just because I've been burned once on this....

MS: But I'm not going to disagree with that. I think that the distributed renewable is probably 10 years away from really being cost-effective....

This is where I want to lead you, though. Actually, we're taking the opposite bet. We're betting, as SDG&E wants us to bet, $1.3 billion, that Sterling will work. That's the bet. And that's a bet that no one in the private sector is willing to take. Sterling can't get financing.

DH: What is Sterling?

MS: I'm sorry, Sterling Solar is a company that is offering to use solar-thermal technology to drive essentially modified automobile engines to produce electricity and then sell it, to the tune of some 900 megawatts of power at SDG&E. The line holds 1,000 megawatts. So, essentially, SDG&E is betting a line, a power line, that the Sterling technology will work....My bet is they do succeed.

My solution...is, you know what? We have a power line currently that goes to the Imperial Valley. It's called Southwest Power Line, or in the industry, SWPL. Why not use the Southwest Power Line to bring in the renewables...? And if those renewables are in fact viable and they do develop, and they are so robust that it makes sense for us to build another line out there, let's think about it. But in the interim, until we have some resources out there we know we can get, why don't we use the existing line?...

UNKNOWN: Back to Southwest Power Link...I'm not hearing you say, upgrade that line. I'm hearing you say, bring the renewables in, which doesn't add capacity.

MS: Well, we don't need the capacity....

UNKNOWN: I think that's a fundamental argument. Your argument, we don't need the capacity.

MS: We don't need the capacity if we upgrade the North County, the SONGS [San Onofre Nuclear Generating Station] lines, which we have proposed.

UNKNOWN: They just got done upgrading the SONGS lines.

MS: The proposal we have on the table is to propose, is to upgrade some transmission lines in the Edison [Southern California Edison] territory.

UNKNOWN: Not through Camp Pendleton?

MS: They've already done that. The problem with the importation isn't those have been upgraded. Those are at additional capacity. But we can't use those at capacity because of a bottleneck that's in the Edison territory....

MS: And by upgrading that for less than $100 million, you have the additional capacity you need....

UNKNOWN: And you could just fix the bottleneck up in Edison. And then we're back to two power lines, and now that with, with the Escondido plant [Palomar Energy Center power plant] and the Otay plant [a new 510-megawatt plant being built in Otay Mesa], we're reliable if one of them goes down.

MS: Correct. So it meets all the reliability needs we have. And we have the opportunity to revisit this in 2015 or 2018 and say, OK, how have things developed?...

UNKNOWN: On a busy day, on a hot day, how much excess capacity is there?...

MS: Zero. On a hot, seriously hot day, you're maxing out every transmission line and you're maxing out most of the local generation.

UNKNOWN: So how are we going to get...?

MS: Over SWPL. Here's how it works. It's not as complicated as SDG&E would have you believe.... Right now, we're bringing in about 1,200 max of megawatts of power over that Southwest power line and that power's coming from gas-generated power, from Sempra's plant in Mexico, from a couple of plants in Arizona.... That's where that power is coming in. ...

DDevine: The main critique that we've heard from SDG&E is that your proposal is just in time, that this incremental adding of capacity that you recommend would leave us vulnerable to unforeseen circumstances, to rolling blackouts...the specter of what we went through in 2001....Why is that wrong?

MS: It's wrong for a couple of reasons. First off, we can go into history and say that's exactly what SDG&E argued on the Valley-Rainbow line.

RH: I don't know if anyone can answer this. Have you done studies to see what the typical consumer, if this line is built, it's up and running, what the typical consumer will pay annually, monthly, whatever, per kilowatt, just for the cost of this power line?

MS: No one has done that....And one of the reasons why it's hard to do that is because you can, we can just talk about what the cost of the power line will be, we can talk about that, and what the cost would be. But the big issue is, what's going to be the cost of that power that we're bringing in over that line. That's the impact on consumers.