Dive Brief:
- Federal regulators have denied San Diego Gas & Electric's petition for incentives to construct the Sycamore-Penasquitos transmission line, which the utility said is needed to deliver more power to the coast.
- Rather than its typical 10.05% return on equity, Argus reports the utility had requested a higher rate saying there were inherent risks associated with the project due to its accelerated timeline.
- FERC was not persuaded, but did say that should SDG&E be forced to cancel the project it could recover its investment so far.
Dive Insight:
SDG&E won a competitive solicitation held by the California ISO, but had requested an 11.05% return on equity because of risks associated with the project. Construction on the 230-kV transmission line is expected to begin in the middle of next year, with a targeted in-service date of May 2017.
But according to Argus, FERC called SDG&E's description of the risks "unpersuasive" because it was awarded the project through competitive bidding.
The 16.7-mile line would run from the utility's existing Sycamore Canyon Substation to the existing Peñasquitos Substation. SDG&E said benefits of the project would include improved reliability and integration of existing renewable energy.
The project was proposed as part of the California ISO's 2012-2013 Transmission Plan, and a state task force subsequently found the new line was necessary due to the expected retirement of several coastal power facilities along with the retirement of the San Onofre Nuclear Generating Station.
