Reliability

Case 440 (an analytical model run by SDG&E) shows no need for new CTs beyond those already approved by the CPUC until 2014. If the extra Mw from SDG&E's GRC Phase 2 AMI estimates are included, no need for new resources until 2016 at the earliest. If extra demand response, post-2008 energy efficiency, or generation identified in the record are included, no need for new resources for more than a decade. Likewise, the UCAN-proposed Path 44 upgrade would defer any reliability need from 2010 to 2018, or from 2014 to 2020. Use of the most recent CEC staff forecast would further defer any reliability need for Sunrise.

Economics

Savings
Cases 440/441 show no significant GridView benefits if Imperial Valley development is at high levels both with and without Sunrise. ISO analysis shows no significant GridView benefits if Imperial Valley development levels are high with Sunrise and low without Sunrise. If Imperial Valley development levels were low with and without Sunrise, benefits would be lower yet. In any case, SDG&E numbers are untrustworthy for many reasons.

Local RMR
ISO and SDG&E both overstate benefits by assuming very large reductions in unit prices with Sunrise. The ISO overstatement is less severe than SDG&E's because they revised their numbers to reflect UCAN testimony.

Non-local RA
SDG&E assumes zero, very self-servingly. The ISO used to, but has adopted UCAN's position. This reduces Sunrise benefits by ~$36 million/year.

Sunrise O&M
SDG&E assumes Sunrise will be cheaper than average, with no historical data. The ISO just adopts SDG&E's position, with no analysis. SDG&E representations to the ISO, SDG&E's internal documents, and the lack of any FERC review all suggest SDG&E has understated its O&M costs.

Replacement capacity costs
SDG&E and the ISO both overstate the Mw of required replacement capacity, by ignoring resources that will be present with or without Sunrise (e.g., peakers approved in A.07-05-023). Thus they overstate the savings attributable to Sunrise from reduced peaker construction. The effect is $10-20 million/year.

Path 44 upgrade and Miguel import nomogram modifications
UCAN estimates that the Path 44 upgrade and Miguel import nomogram modifications would provide further economic benefits over and above a no-Sunrise case using CTs as necessary to provide reliability.

Bottom line re economics: SDG&E has failed to meet its affirmative case burden, by analyzing only a case (high IV renewables developement with or without Sunrise) that it and the ISO both say can't/won't happen. Even with the SDG&E economic assumptions regarding IV renewables development, Cases 300/301 and 400/401 show, when account is taken of non-local RA and reduced avoided capacity benefits, that the B/C ratio for Sunrise would be less than
1. Quantifying SDG&E's overstatement of RMR benefits and understatement of Sunrise O&M would further reduce the B/C ratio for Sunrise.

Renewables development

a. SDG&E's economic analysis shows, and DR4-24b explains why, the presence or absence of Sunrise will no have any appreciable effect on renewable resource development or generation in the Imperial Valley.

b. Even if Sunrise would accelerate renewable resource development inthe Imperialvalley, that is no reason to accelerate Sunrise if the type of renewable resource development would be solar or Mexican wind. For solar, the ISO queue shows there is far more solar generation pending in San Bernardino County than in Imperial County; no cost advantage to IV, so no reason it has to be developed there. For Mexican wind, transmission could be built in Mexico. SDG&E previously rejected Mexican transmission on the grounds that there were no renewables there (see Brown testimony and X), but that objection no longer applies.

c. The ISO concedes that 700 Mw (without Sunrise; could be 860+ Mw, depending on revised ISO responses to UCAN data request 5-1) to 2000 Mw (with GPN but no Sunrise) of new resources can be developed. UCAN and IID have both shown that geothermal (and solar) development is happening more slowly than projected by SDG&E or by the IVSG. Thus there is no renewables-based reason to bring Sunrise on line prior to the year when there would be more than 700-860 Mw (or 2000 Mw if GPN proceeds) of new geothermal resources added above 2007 levels. (See subsection(b) for why Sunrise need not be built to deliver solar or wind). Giventhe absence of any geothermal projects in licensing at the CEC, it will clearly be well after 2010 before there are 700-2000 Mw of new geothermal developments. Since Sunrise construction takes less time than geothermal plant construction, Sunrise construction to facilitate geothermal deliveries need not start until after constructionstarts on 700+ Mw ofnew geothermal.

d. SDG&E's primary renewable resource that is used to justify Sunrise is a contract with Stirling Solar. Yet, Stirling has not found financing to support the installation of unproven solar-water-heated engines as per its contract with SDG&E. It has not even yet found a site in which to locate its solar generators......and the Stirling is supposed to start shipping power to SDG&E in less than two years!

Alternatives

a. SDG&E has not analyzed a "southern route" alternative proposed by UCAN and has no information about the cost of such a route. Yet, the route could be shorter, doesn't go through a state park and is closer to wind renewables that are most promising.

b. SDG&E's claim that UCAN's proposed upgrade of Path 44 was unworkable rested upon an alleged representation by SCE that Barre-Ellis could not be upgraded. SCE has subsequently sent a memo to SDG&E denying that it made such a representation.

c. The alleged $100 million in costs that SDG&E claimed would be caused by UCAN's proposed alternative turned out to have been fabricated estimates with no analytical support behind it and was obvious inflated, in comparison to other line reconductorings done by SDG&E in the last three years.