Sunrise Powerlink benefit estimate is lowered

By: Dave Downey
North County Times July 20, 2007

San Diego Gas & Electric Co. sharply downgraded its estimate of the annual economic benefits its proposed power line would deliver to the region from $204 million to $129 million, in reports filed with the California Public Utilities Commission late Friday to correct earlier errors.

However, the company maintained that the 150-mile proposed power line known as Sunrise Powerlink still compares favorably to alternatives for meeting the growing demand for electricity in a service area that encompasses 1.3 million homes and businesses in San Diego County and southern Orange County.

"The conclusions really haven't changed," said Mike Niggli, the utility's chief operating officer, in a phone interview following the filing. "The conclusions are still: one, that the project is needed from a reliability standpoint; two, that it is the best way for bringing renewable resources into this region; and, three, that it is the most economic method for accomplishing those goals."

The company is trying to make the case to state regulators that the project warrants their approval, and the economic benefit statistic will be a key factor in gauging whether the utility has come up with the best option for meeting the region's future needs.

The errors, which were the result of faulty assumptions about future power plants that would supply electricity to Sunrise, also triggered a downgrading of estimates for alternatives to the power line.

For example, the estimated economic benefit that would come from building more natural gas-fired power plants in San Diego County was lowered from $125.6 million to $76.5 million. Such plants would be similar to the new one that opened in Escondido last year.

The utility's benefit estimate for building a 500-kilovolt transmission line alongside the existing 500-kilovolt Southwest Powerlink wires that run into Arizona from San Diego near Interstate 8 actually increased. But, at $37.2 million, the economic benefit still came in below that of Sunrise.

However, Michael Shames, executive director of the Utility Consumers' Action Network, a San Diego-based consumer advocacy group, said the utility did not compare Sunrise with the group's suggested alternative of improving the wires that run along the coast into San Diego County from Southern California Edison territory. Shames maintained that more benefits would come from beefing up the coastal line so that it could carry more electricity.

The goals of the Powerlink project are to boost the reliability of San Diego County's power supply on hot summer days and expand use of nonfossil-fuel power such as solar, wind and geothermal power. About half the route would have 500-kilovolt wires; the other half would have 230-kilovolt wires.

The high-voltage transmission line would run from El Centro to San Diego with wires strung from towers as tall as 150 feet. The superhighway would wind through Anza-Borrego Desert State Park, Ranchita, Santa Ysabel, Ramona, Rancho Penasquitos and Carmel Valley.

The project is supported by the business community and a large number of San Diego County and south Orange County cities. It is opposed by environmental groups that worry about its footprint on the landscape and by many residents of communities the wires would cross. The Utility Consumers' Action Network also opposes the project, suggesting it is not needed and that a more affordable, smaller-scale alternative should be pursued.

The Public Utilities Commission is scheduled to decide in January whether to grant San Diego Gas & Electric permission for the power line.

Friday's filing was triggered by the utility's acknowledgment earlier this week during commission hearings in San Diego that its economic-benefit estimates contained errors. Because of that disclosure, a commission official presiding over the case abruptly postponed hearings exploring the need for the project that were supposed to continue through next week.

The hearings are now scheduled to resume July 30 in San Francisco, after the various players in the case have had opportunity to review the revised numbers.

Niggli said the errors were the result of faulty assumptions about operational characteristics of coal-fired power plants in Canada and Utah, and the availability of electricity from a natural-gas plant in Northern California, among other reasons. He characterized the seven mistakes that were corrected as minor in nature, when set against the backdrop of thousands of assumptions used to compute benefits.

But Shames insisted the mistakes were significant.

"This is SDG&E's concession that their numbers are extremely volatile and readily manipulable," Shames said. "This is their fourth round of manipulations. We're hoping this is the last. We're going to, of course, have a chance to look at their numbers and figure out what they did right or wrong."