Nevada Hydro Clears Up Interconnect Issues for 600-MW Project

The Nevada Hydro Co. filed a tardy Feb. 3 update with the Federal Energy Regulatory Commission that said it is making progress on a 600-MW pumped storage hydro project in California.

FERC in October 2012 issued a preliminary permit to Nevada Hydro to study the feasibility of the Lake Elsinore Advanced Pumped Storage Project, to be located on Lake Elsinore and San Juan Creek in Riverside, San Diego and Orange counties, Calif. A preliminary permit allows three years for feasibility work, with a license application then needed if the decision is to move the project forward.

The project would include about 32 miles of 500-kV transmission line connecting the project to an existing transmission line owned by Southern California Edison located north of the proposed project and to an existing San Diego Gas & Electric transmission line located to the south.

FERC on Jan. 29 chided the company about a late update report under the preliminary permit. The company said in the Feb. 3 update that since issuance of its preliminary permit, it has focused on two critical issues.

Connecting to the Grid

The company said it began the “arduous” interconnection process by filing an application with the California Independent System Operator (CAISO) in 2005 while the project was under review by the commission in its old docket. The application described a two-point connection, one to the north and one to the south. Although the company filed a single application and received a single CAISO queue position, the CAISO, SCE and SDG&E decided to bifurcate the application, requiring separate and unrelated connection processes for the northern and southern connections. This resulted in two independent sets of studies and two unrelated interconnection agreements, the company added.

It completed studies and interconnection agreement with SDG&E in 2008, but the studies and interconnection agreement with SCE were not completed until much later. In early 2012, the CAISO submitted for filing with the commission a proposed notice of termination canceling the Large Generator Interconnection Agreement (LGIA) among the company, SDG&E and CAISO. The CAISO claimed that the company breached the terms of the LGIA by failing to meet certain milestone dates. Within days of this filing, the CAISO also submitted for filing an unexecuted LGIA among the company, SCE and the CAISO. On the same day, SCE separately filed the identical LGIA under its own tariff.

In a May 2012 letter to SCE and the CAISO, the commission requested additional information on these filings, and the company, SCE, SDG&E, and the CAISO soon entered into commission–sponsored settlement proceedings to resolve various issues. It took all parties more than a year to resolve the issues, and the CAISO filed settlement documents in these dockets in mid–January 2014. When accepted by the commission, these filings assure the project its connections to the grid.

Assuring a Revenue Stream

Second only to the criticality on not being able to connect to the grid, is the issue of how to pay for construction of the project. The company’s representatives are actively participating in a number of regulatory proceedings in California relative to providing revenue sources for storage and firming resources. These proceedings include:

  • At the California Public Utilities Commission, proceedings focused on long term procurement, storage, renewable portfolio issues, tracking power purchase agreements and utility contracting opportunities, the outage and planned retirement of the San Onofre Nuclear Generating Station, and a number of proceedings specific to SDG&E and SCE.
  • At the CAISO, proceedings focused on transmission planning, grid management, reliability assessment, resource adequacy, generator interconnection and deliverability, local capacity requirements, flexible capacity requirements, aggregating pumping and generation, storage, generation plant modeling, and residual Order 1000 issues. ?The company is also considering discussing with the federal commission and stakeholders the potential for filing for federal rates under provisions of the Energy Policy Act of 2005.

In addition to these major tasks, the company said it also recently undertook the following tasks during this reporting period: continued discussions with the Cleveland National Forest relative to routing, environmental issues and processes; participated in proceedings at the California Energy Commission and the Western Electricity Coordinating Council; worked on the related Talega–Escondido/Valley–Serrano 500 kV Interconnect Project; and discussed with investors additional funding for the project.

This article was originally published on GenerationHub and was republished with permission.

Lead image: Hydropower dam via Shutterstock

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Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.

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