Regulator says U.S. action may permit line rejected by AZ

By PAUL DAVENPORT - Associated Press Writer

Last Updated 5:35 pm PDT Tuesday, October 2, 2007

PHOENIX -- Federal designation of swaths of Arizona and Southern California as a critical electric transmission corridor could open the door for a California utility to build a major cross-desert power line that Arizona has rejected, a state regulator said Tuesday.

"This is a step in that direction," said Kris Mayes, an Arizona Corporation Commission member.

One of two "national interest electric transmission corridors" designated by the Department of Energy includes Maricopa, La Paz and Yuma counties in southwestern Arizona and seven California counties: Kern, Los Angeles, Orange, San Diego, Imperial, Riverside and San Bernardino.

With the designation of the Southwest Corridor and one in the mid-Atlantic region, the federal government could give a green light to projects that haven't been approved by state or local officials but which are deemed as critical improvements to the energy grid.

Saying the project would benefit California at Arizona's expense, the Arizona Corporation Commission in May denied Southern California Edison's application to build a 200-mile line between the Phoenix area and Palm Springs, Calif.

An Edison spokesman declined immediate comment on whether the utility would take any action in response to the corridor designation, but the utility has said previously it would "pursue regulatory alternatives" that would allow it to complete the line, known as Devers Palo Verde 2, by 2010 or 2011.

Edison contends it needs the line to help connect to new generation projects and to meet California customers' electricity needs. Arizona regulators cited environmental concerns and said the line would lead to higher prices for Arizona customers.

The Arizona commission said in an Aug. 14 letter to federal officials that the then-anticipated designation of the corridor would infringe on the state's authority and likely open the door for Edison to build the line rejected by Arizona.

Mayes said the Energy Department's designation of the corridor was a "a backdoor attempt to subvert our decision" and that there wasn't evidence to support the designation because Arizona previously approved numerous other projects.

Mayes said the Arizona commission likely will ask the Energy Department to reconsider its designation. She said she didn't know whether it could be challenged in court.