Arizona regulators fear SoCal Ed power line will raise prices

Portland, Maine (Platts)--12May2006

Arizona regulators are raising concerns that a proposed transmission line
between Southern California and the Palo Verde hub in Arizona will raise power
prices in their state.

Rosemead, California-based Southern California Edison has asked the
Arizona Corporation Commission for a permit to build the 230-mile, 500-kV Palo
Verde-to-Devers transmission line so the utility can tap about 6,000 MW of
non-utility generation in Arizona.

Two ACC commissioners, however, are concerned that allowing the capacity
to go the California will raise prices in Arizona. "I am concerned about the
potential impact this exportation of power could have on our state's ability
to provide for its indigenous -- and rapidly growing--population," ACC
Commissioner Kristin Mayes said in a May 11 letter to SoCal Ed CEO Alan
Fohrer. According to Mayes, SoCal Ed told the California Independent System
Operator, which has approved the project, that the transmission line would
benefit California by $967 million from 2009 to 2014, but it would cost
Arizona $231 million during the same period.

Mayes asked for an environmental analysis prepared to account for any new
power plants that would be built in Arizona due to a drawdown in available
capacity if the $680 million line is built.

Mayes also asked Arizona's major utilities -- Arizona Public Service,
Salt River Project and Tucson Electric Power -- for an analysis on when
Arizona would grow into the excess capacity around Palo Verde and what the
utilities would do if SoCal Ed locked up that capacity.

ACC Chairman Jeff Hatch-Miller, in a May 10 letter, asked the
commission's line-siting panel to assess the effect the proposed line would
have on wholesale prices at the Palo Verde hub. He also asked the panel to
consider how the line would affect the ability of Arizona utilities to enter
into immediate- and long-term purchased power contracts.

For similar news, take a trial to Platts Electric Utility Week at
http://electricutilityweek.platts.com.


 

Copyright © 2005 - Platts

Please visit:  www.platts.com

Their coverage of energy matters is extensive!!.