By Mark Waite
The California Independent System Operator Corporation CAISO board of governors last week approved an application by Valley Electric Association and its subsidiary, Valley Electric Transmission Association LLC, to be a participating electrical transmission owner.
The approval is contingent upon the Federal Energy Regulatory Commission accepting a VEA transmission owner tariff and transmission revenue requirement and VEA executing a transmission control agreement with CAISO. Last December, FERC approved the transition agreement between Valley Electric and CAISO.
While many Nevadans like to shun California, joining the association that supplies electricity to 80 percent of the California grid was seen as a way to get power from solar generators to market. NV Energy has already met its renewable energy portfolio, which includes a 25-year power purchase agreement with SolarReserve for its 110-megawatt plant under construction near Tonopah. California is under a requirement to obtain 33 percent of its power from renewable energy by 2020.
“We are pleased with the vote by the Board of Governors and continue to look forward to becoming a participating transmission owner as of January,” Tom Husted, chief executive officer of VEA said in a prepared statement. “The benefits to the ratepayers of California and Nevada are numerous.”
VEA will be the first Nevada-based utility to join CAISO, an organization formed in 1998 after market manipulation, including the Enron scandal, brought brownouts to the Golden State.
During a prior interview with the Pahrump Valley Times, Husted pointed to the importance of CAISO membership to the emerging southern Nevada solar power industry.
“If we don’t join the CAISO, then what’s going to happen is that this opportunity is dead on the vine. There is no opportunity because these guys have to get to the ISO. They have to get to the California market,” he said.
Clay Jensen, director of project development for BrightSource Energy, which has plans to build two, 250-megawatt solar plants nine miles south of Pahrump on the Tecopa Road, said, “it’s very good news for us. It’s what Valley Electric’s been endeavoring to do. It is going to help us develop the Hidden Hills project.”
The BrightSource Energy project will be located on 3,200 acres of private land just across the California state line. BrightSource is close to completing a solar project in Ivanpah Valley near Primm and has a power purchase agreement with Southern California Edison and Pacific Gas and Electric.
VEA has filed an application to build a 500-kilovolt power line from the BrightSource project to Eldorado Valley south of Boulder City, where it would feed power to California.
Jensen said the CAISO membership wasn’t essential to his project; BrightSource was working on the site before Valley Electric decided to apply. But he said it will help solar power generators in southern Nye County.
“We see it as a real good step forward in helping to encourage renewable energy development in and around Valley Electric’s system. It provides a more direct access. It’s an operational control issue with CAISO,” Jensen said. “Having the operations and control linked up with the California system is a huge benefit.”
“The California utilities will look at applications for projects proposed in this area more favorably because they’re a part of the CAISO control system and it helps them maintain better control over the power in their system,” he said.
Greg Helseth, a renewable energy project manager for the U.S. Bureau of Land Management, said he expects a draft environmental impact statement for the VEA power line to be completed by the end of the year. Jensen said he expects a final staff assessment from the California Energy Commission on the Hidden Hills solar plant on Oct. 19; he anticipates a ground breaking by the first quarter of 2013.
Earlier this year, VEA reported having nine solar generators in its transmission queue, with 2,800 megawatts of capacity, half the power demand of Las Vegas, North Las Vegas and Henderson.
Other companies have filed applications with the BLM to build solar power plants on public land just between the Tecopa Road and the southern end of Pahrump. Abengoa Solar Inc. has proposed a 640-megawatt, Pahrump South Solar project; Boulevard Associates LLC applied to build a 250-megawatt power plant; Element Power has an application for a 300-megawatt photovoltaic project and Pacific Solar Investments Inc. has an application for a 300-megawatt PV project. The last two projects would be in Nye County.
Stacey Crowley, director of the Nevada State Office of Energy, said, “the Office of Energy applauds this action and considers this step an encouraging sign of the growing support and cooperation between our two states.”
The agreement will place a 230-kilovolt power line from the Mead substation to Pahrump and the 138-kilovolt line from the Amargosa substation near Henderson to the Beatty substation under operational control of CAISO, along with the new 67.5-mile, 230 kilovolt northwest transmission line around the Spring Mountains and an existing 230 kv transmission line between Johnnie and the Vista substation.
VEA has rights to deliver and receive power at the Mead substation, which will be used to move the VEA transmission system into the CAISO balancing authority area and provide operational control over the VEA transmission system to CAISO. A new VEA connection between the Pahrump to Mead transmission line and Southern California Edison power company at the Eldorado substation will be built to establish a direct interconnection to the CAISO grid and an additional point for CAISO to exercise physical and operational control over the Valley Electric transmission system.
Upgrades to the network will be required to comply with the CAISO system, costs which will be borne by all the CAISO members.
At the Valley Electric District 1 election last April, Husted said VEA will realize net savings of $2.64 million when CAISO takes over the $7.5 million cost of transmission, after the cooperative pays $4.83 million in CAISO charges. VEA recently eliminated impact fees due to the pending CAISO membership.
Facilities not under CAISO operational control will include lower voltage distribution lines and facilities not used to transport power to other markets.
VEA will be required to file a new transmission access charge for capacity procurement costs. That is a charge included in members’ power bills in California that includes the collective revenue requirements for all of the utilities that participate in the CAISO.
VEA complied with certain conditions to become a participating transmission owner, the CAISO found.
Valley Electric is expected to be certified and registered with the Western Electricity Coordinating Council and the North American Electric Reliability Corporation .
The CAISO has no outstanding objections regarding any of the transmission facilities or entitlements, CAISO said the VEA facilities meet the applicable reliability criteria, aren’t subject to any encumbrances and can technically be integrated into the CAISO grid.
CAISO said Valley Electric, a member-owned electric cooperative, is an experienced transmission owner and operator that could perform the operational obligations under the transmission control agreement. Those obligations include complying with operating orders and transmission maintenance standards.