FERC last Monday began consulting with Southern California Edison Co. (SCE) on its proposed Devers-to-Palo Verde 2 (DPV2) high-voltage transmission line, taking its first step under the agency's new authority to consider a request to site interstate electric transmission facilities in National Interest Electric Transmission Corridors if state regulators have "withheld approval" on a project for more than a year.

The Federal Energy Regulatory Commission (FERC) sent letters to the Arizona Corporation Commission (ACC), which had rejected the proposed line, and the California Public Utilities Commission (CPUC) to inform them it was meeting with SCE officials. FERC asked for the state regulators' input as to whether the requirements under the Energy Policy Act of 2005 (EPAct) giving FERC backstop siting authority have been met with respect to the DPV2 line. The letters "are part of our effort to keep the process as transparent as possible," said FERC spokeswoman Mary O'Driscoll.

California regulators approved the SCE proposal in January 2007; Arizona regulators rejected it last May (see NGI, June 4, 2007). The utility said it intends to simultaneously pursue siting efforts with the FERC while preparing a new application for Arizona regulators.

"DPV2 would provide significant regional economic benefits and allow neighboring states to access renewable energy sources, such as solar energy-rich areas in California and Arizona," a SCE utility spokesperson said. "The DPV2 project would reduce energy congestion within a nationally designated, critical electrical corridor and help western states satisfy their energy policy and environmental goals."

DPV2 is a proposed 230-mile, 500-kV transmission line that would run parallel to SCE's existing DPV1 line, which is partially owned by the Los Angeles Department of Water and Power.

At the conclusion of its consultations with FERC, SCE said it would request that the Commission begin a pre-filing process to build the transmission line from the Palo Verde electric hub in Arizona to the Devers substation near Palm Springs, CA. The utility said it then may decide to file a formal application with FERC or file a new application with the ACC.

The ACC, in rejecting the Arizona leg of the project, said it would allow California utilities to import major amounts of power from Arizona. SCE subsequently filed an appeal of the ACC ruling with the Superior Court of Maricopa County in Arizona. In August 2007 both the SCE and the ACC staff jointly agreed to put the appeal on hold while both parties worked together on regulatory alternatives.

Under the EPAct, FERC has the authority to review and issue a permit for a transmission line project that has been denied if the project is within a critically congested electric corridor designated by the Department of Energy (DOE). The southwestern corridor between Arizona and southern California has been deemed one of two critically congested corridors in the nation by the DOE.

SCE said its first priority and preference is to gain regulatory approval for the DPV2 project from the ACC. To support a new ACC filing, the utility noted it is working with stakeholders, regional utilities and planning groups in Arizona to develop an acceptable alternative plan to present to Arizona regulators. However, as a backstop measure, it said it will pursue siting efforts with FERC.

In November 2006 FERC issued a final rule that in effect gave the Commission the power to usurp the electric transmission permitting authority of a state in the event the state failed to act within one year on a project that would relieve congestion in a nationally designated transmission corridor. Critics, including FERC Commissioner Suedeen Kelly, argued that the Commission was preempting the authority of the states. The other Commissioners, while approving the final rule, said the agency should use the new-found power sparingly (see NGI, Nov. 20, 2006).

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