California Transmission

Constraints and Opportunities

Scott Crider, Public Affairs Manager

SDG&E Sunrise Powerlink

SDG&E Overview

� 1.3 million electric customers in San Diego and southern Orange Counties

� Peak demand ~4500 megawatts

� Approximately 10% of state’s load

California’s Transmission Crisis

� Transmission congestion is a critical regional issue for Southern California

� A lack of transmission capacity means: • Limited access to renewable energy

• A less reliable grid

• Higher costs for ratepayers

� Few major (500 kV) transmission lines have been added in recent years

� Severe problem in SDG&E’s service territory

A Green Energy Future

� State’s decision to “go green” will depend upon the development of California’s vast renewable energy resources

� CA Renewable Portfolio Standard

• IOUs required to procure 20% of energy supplies from renewable resources by 2010

• Legislature considering 33% by 2020

� AB 32

• Regulations still not defined

• Massive shift from fossil-fuels to renewables

Barriers to Renewable Energy

� Lack of transmission connecting green resources to California load centers is primary barrier to meeting state’s renewable energy goals

� Renewable developers are hesitant to begin building large-scale projects before new lines are in place

� Utilities moving quickly to build new transmission lines to reach solar, wind and geothermal energy supplies• Sunrise Powerlink – SDG&E

• Tehachapi – SCE

• Green Path North – LADWP

“One of the primary difficulties with the Renewable Portfolio Standard program is the lack of adequate transmission to access renewable resources in Tehachapi and Imperial Valley…”

– California Energy Commission 2006 IEPR Update

Why Not Pursue Local Renewables?

Footprint: 165 square milesFootprint: 165 square milesFootprint: 165 square milesFootprint: 165 square miles

StirlingStirlingStirlingStirling 1000 MW1000 MW1000 MW1000 MWSolar Trough 1000 MWSolar Trough 1000 MWSolar Trough 1000 MWSolar Trough 1000 MWWind 1000 MWWind 1000 MWWind 1000 MWWind 1000 MW

PeakerPeakerPeakerPeaker Plant 1000 MWPlant 1000 MWPlant 1000 MWPlant 1000 MWMajor Power Plant 1000 MWMajor Power Plant 1000 MWMajor Power Plant 1000 MWMajor Power Plant 1000 MWRooftop Solar 1000 MWRooftop Solar 1000 MWRooftop Solar 1000 MWRooftop Solar 1000 MW

Footprint: 16 square milesFootprint: 16 square milesFootprint: 16 square milesFootprint: 16 square miles Footprint: Footprint: Footprint: Footprint: 12121212 square milessquare milessquare milessquare miles

Footprint: 855,00 homesFootprint: 855,00 homesFootprint: 855,00 homesFootprint: 855,00 homes

Cost: $21,000,000,000Cost: $21,000,000,000Cost: $21,000,000,000Cost: $21,000,000,000

Footprint: 40Footprint: 40Footprint: 40Footprint: 40----80 acres80 acres80 acres80 acres Footprint: < 40 acresFootprint: < 40 acresFootprint: < 40 acresFootprint: < 40 acres

Energy Reliability

� A lack of transmission capacity is a direct threat to regional energy reliability and the economy

� Transmission grid is an interconnected system

� Major transmission outages during adverse conditions can impact customers in multiple utility service territories

August 25, 2005: Transmission emergency near Sylmar forced SCE and SDG&E to cut power to more than 250,000 customers

National Transmission Congestion Study

� In 2006, U.S. Department of Energy completed study of nation’s transmission grid

� Called Southern California a “critical congestion area”• Only two regions in the entire nation

• Lack of transmission a “threat” to regional economy

“Southern California needs new transmission capacity to reach generation sources outside the region for reliability, economics and compliance with the state’s renewable portfolio standard.”

---- U.S. Dept. of EnergyU.S. Dept. of EnergyU.S. Dept. of EnergyU.S. Dept. of Energy, 2006 National Electric Transmission Congestion Study, 2006 National Electric Transmission Congestion Study, 2006 National Electric Transmission Congestion Study, 2006 National Electric Transmission Congestion Study

U.S. DOE Draft Transmission Corridor

Sunrise Powerlink Key Facts

� 1000 MW capacity @ 500/230 kV

• Enough energy to power about 650,000 homes

� 150-mile line

• Imperial Valley to coastal San Diego

� $1.3 billion project

� Sunrise Powerlink will:

• Improve energy reliability

• Expand access to renewable energy

• Lower costs for consumers

Keeping the Lights On

� Sunrise Powerlink will secure future energy reliability for California ratepayers

� SDG&E transmission grid has reached limit

• San Diego sits in an energy cul-de-sac

• Only one 500 kV line built 25 years ago

� Lack of transmission capacity limits access to generation resources in desert southwest

� 2,000 MW of contracts terminating by 2012

• Local power plant closures and long-term energy contracts

500 kV

230 kV

230 kV

Mexico

UTAH

ARIZONA

OREGON

Positioned for illustrative purposes only, indicating the approximate number of existing major transmission lines per utility.

500,000 volt 500,000 volt 500,000 volt 500,000 volt Transmission Lines Transmission Lines Transmission Lines Transmission Lines in Californiain Californiain Californiain California

State: State: State: State: 47474747

San Diego: San Diego: San Diego: San Diego: 1111San Onofre:

PG&E

4 - 230 kV Lines to SCE

5 - 230 kV Lines to SDG&E

230 kV

Mexico

SDG&E

UTAH

ARIZONA

NEVADA

OREGON

PG&E

LADWPSCE

Critical Transmission Shortage

Sunrise Powerlink: Gateway to Green Energy

� Sunrise Powerlink will unlock green energy resources in Imperial Valley for California

� Contracts in place for 740 MW of solar, wind and geothermal energy

� SDG&E has received requests to connect 6400 MW of solar, wind and geothermal projects to grid

� Green energy projects will stall without new transmission lines

� Critical to meet state energy policy mandates:

• Renewable Portfolio Standard - 20% by 2010

• AB 32 greenhouse gas emission standards

Lower Energy Costs

� Like a freeway at rush hour, the transmission grid gets jammed during peak times of energy use

• Raises costs for families and businesses

� Sunrise Powerlink will help lower energy costs

� Estimated $200 million in annual savings for CA ratepayers

• Reduced reliance on older, inefficient power plants

• Reduction in transmission congestion costs

� CA Independent System Operator: Sunrise Powerlink will provide more ratepayer savings than other options

Energy Energy Energy Energy CostsCostsCostsCosts

Sunrise Schedule & Key Milestones

June 2007

July 2007

August 2007

September 2007

October 2007

November 2007

December 2007

January 2008

Intervener Intervener Intervener Intervener Testimony Testimony Testimony Testimony

DueDueDueDue

Evidentiary Evidentiary Evidentiary Evidentiary Hearings Hearings Hearings Hearings BeginBeginBeginBegin

Draft Draft Draft Draft EIR/EISEIR/EISEIR/EISEIR/EIS

Public Public Public Public Participation Participation Participation Participation HearingsHearingsHearingsHearings

Final Final Final Final EIR/EISEIR/EISEIR/EISEIR/EIS

Proposed Proposed Proposed Proposed DecisionDecisionDecisionDecision

Final Final Final Final DecisionDecisionDecisionDecision

What the Experts are Saying…

“[Sunrise Powerlink] solves San Diego’s know import limit reliability problem for 2010…”

---- California Independent System OperatorCalifornia Independent System OperatorCalifornia Independent System OperatorCalifornia Independent System Operator, CSRTP, CSRTP, CSRTP, CSRTP----2006 Report2006 Report2006 Report2006 Report

“Sunrise Powerlink would provide significant near-term system reliability benefits to California…

---- California Energy CommissionCalifornia Energy CommissionCalifornia Energy CommissionCalifornia Energy Commission, 2006 Integrated Energy Policy Report, 2006 Integrated Energy Policy Report, 2006 Integrated Energy Policy Report, 2006 Integrated Energy Policy Report

A Choice for California

� Decision new transmission lines will test the state’s commitment to a clean energy future

� Lack of transmission is a statewide problem that will limit renewable energy development in California

� Without Sunrise Powerlink, SDG&E will commit customers to a fossil-fueled future

� Last chance for SDG&E to build needed transmission line that will serve customers for decades

Your Support is Needed

� Business leaders across the state need to get involved and support proposed transmission projects

� Like freeways, housing or water projects, transmission infrastructure is a critical element of a strong economy and business environment

� Utilities are facing fierce opposition from communities and environmental groups

� Sunrise Powerlink is strongly supported by major business groups and energy experts • CAISO and CEC • California Chamber of Commerce • San Diego Regional Chamber of Commerce • Local chambers

Thank You

For more information, please visit:

www.sdge.com/sunrisepowerlink