Delay could sink, or perhaps benefit, power line

By: Dave Downey - Staff Writer
North County Times July 28, 2007

A plan for a giant power line through San Diego County has suffered setbacks and delays this month, and some industry observers ---- though not all ---- suggest that the proposed line's chances of approval are shrinking.

A state official last week ordered a delay in the approval process for the $1.3 billion project, known as Sunrise Powerlink, because the 150-mile line proposed by San Diego Gas & Electric Co. raised unanswered environmental questions.

"Any time you put something off it decreases the chance for approval," said former state Sen. Steve Peace, who helped write several laws governing the electricity market, including the one that launched California's failed experiment with deregulation.

In addition to the impact of the delay, utility company officials last week conceded they had inflated estimates of the line's potential economic benefits for the region.

San Diego Gas & Electric officials say that even though the project's economic-benefit estimate has been slashed to about one-fourth its original estimate of $447 million a year, Sunrise Powerlink is still a bargain when compared to alternate ways of boosting power supplies.

Proponents of the line also say it's needed to quench the region's thirst for power, which is growing at a rate of 100 megawatts per year. That pace requires one new power plant every five years. Sunrise would deliver the equivalent of two power plants' worth of electricity.

Opponents such as Michael Shames, executive director for the Utility Consumers' Action Network, a San Diego advocacy group, said last week that the recent developments will have a "big-time" impact on the project's fate.

As a result of the order by a California Public Utilities commissioner, a more robust study of alternatives to the power line can be expected, Shames said.

"It's the alternatives that ultimately may sink Sunrise," he said. "And they won't be able to justify it from an economic standpoint. It will be a money loser."

Shrinking financial benefits

Other observers suggest the delay will have little detrimental impact on the utility's chances of winning approval.

A delay may even advance the company's cause, said Frank Wolak, a Stanford University economics professor who serves on an independent panel that monitors the electricity market for the California Independent System Operator. The operator oversees the state's power grid.

"It may make it much easier for the CPUC to approve the project," Wolak said, saying that the need for the power Sunrise would deliver can only increase with time.

One of the goals of the Powerlink project is to boost the supply so there is less of a chance the lights will dim on hot summer days. Another is to expand the utility's use of electricity from renewable, nonfossil-fuel sources such as solar, wind and geothermal to comply with a state mandate.

Strung from metal towers as tall as 150 feet, the line would run from El Centro to San Diego. On the way, wires would cross Anza-Borrego Desert State Park, Ranchita, Santa Ysabel, Ramona, Rancho Penasquitos and Carmel Valley.

'Picking your poison'

About half the route would have 500-kilovolt wires; the rest would have 230-kilovolt wires.

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 in the project's path.

While many shudder at the thought of looking up at giant metal towers, Wolak said choosing ways to bring in more power ---- something everybody wants ---- is "a case of picking your poison."

The most likely alternative would be to build power plants in metro San Diego, but that isn't likely to go over well with area politicians, Wolak said.

Indeed, Chula Vista and Santee officials are balking at the idea of replacing the aging South Bay power plant with a modern fossil-fuel plant and building a new one on Miramar Marine Corps Air Station.

Wolak also suggested that a power line will be considered by a majority to be less of a poison than setting a large amount of prime real estate in the San Diego area for solar or wind generators that take up a lot of space.

"Unless you're building power plants in San Diego, and unless you think that San Diego's population isn't going to grow, which seems unlikely given how attractive it is as a place to live, you're going to have to build a transmission line to bring electricity in," he said.

Wolak said the bottom line is that region's need for more power will have more bearing on Sunrise than any procedural delay.

The crystal ball

Scott Anders, director of the University of San Diego's Energy Policy Initiatives Center and seasoned student of the industry, said there is no easy answer to questions about the likelihood that the project will be built.

"That's a crystal-ball question, and my crystal ball is as cloudy as anybody else's," Anders said. "It's unclear what this actually signals, other than what it is, which is a delay."

Anders said the recent developments do, however, bring into sharp focus the fallback option the San Diego utility may have if its project were to be denied by the California Public Utilities Commission.

Under a 2005 law passed by Congress, power line projects in parts of the country declared to be electric transmission corridors of national interest could still get the green light from the Federal Energy Regulatory Commission, even after state denials. Southern California ---- including all of San Diego County ---- is named as a candidate for one of two such national corridors.

San Diego Gas & Electric officials have praised the federal proposal and have said they would consider appealing to a higher governmental power if necessary.

Utility officials has expressed considerable concern about the delay. It means the project's environmental reports won't be completed until June 2008, instead of in November, and that the commission's decision on whether to grant a license to build will come a year from now at the earliest instead of in January. And the line is not likely to begin delivering power to San Diego County until 2011, a year after the utility's target.

"The delay will likely have a domino effect on the entire schedule," said utility spokeswoman Stephanie Donovan.

At the same time, Donovan said, the company is confident the project eventually will be judged on its merits.

"The need for the project is as strong as it was when we first proposed it," she said.

Predisposed to approval

To be sure, said San Diego engineer Bill Powers, a project opponent, this past week's developments "do not mean the project is dead by any means. But it means that in the halls of power in San Francisco and Sacramento there is an awareness that there are issues with this power line that are not positive."

So, as an opponent, he views the delay as an encouraging development.

"But this is just one inning in a long, long ball game," Powers said.

More than likely, he said, Sunrise's chances of approval have been shaved only slightly, from about 8 in 10 to 7 in 10.

Peace, the former state lawmaker, suggests the utilities commission is predisposed to approve the power line because it and regulatory agencies from other states are under heavy pressure from the federal government to beef up the nation's transmission system. That, he said, is due in part to California's 2000-01 electricity crisis and the theory that if there are more wires, regions will be able to pull power from remote locations and avert blackouts.

"The tenor and temperament of the displeasure of the CPUC ... is actually a reflection of the fact that the CPUC really wants to approve this project, and the fact that SDG&E is making it harder for them because of its missteps," Peace said.