California has a new $7.3B plan to fix its…

California’s grid operator has just approved a $7.3 billion plan to build the thousands of miles of new high-voltage transmission lines the state needs to hit its climate goals.

Thursday’s unanimous vote by the board of governors for the California Independent System Operator (CAISO) is an important next step in a long battle to modernize a grid that’s lagging far behind the state’s needs. It’s also the result of years of wrangling over transmission policy and represents ​“close coordination with regulatory agencies, load-serving entities and other key stakeholders,” Elliot Mainzer, CAISO president and CEO, said in Thursday’s announcement.

CAISO’s plan seeks to address a clean energy challenge plaguing the entire nation, not just California: There’s not enough transmission to connect the massive amount of new clean energy being developed to the grid. In California, CAISO has already had to postpone processing newer interconnection requests to handle its existing backlog — and much greater amounts of clean power are on order from state regulators.

Earlier this year, the California Public Utilities Commission set clean energy targets that will lead to more than doubling the capacity of the state’s existing resource mix by 2035 — a boost needed to scale up carbon-free energy at a pace to meet California’s goal of a carbon-free energy sector by 2045. Last month, on top of its existing backlog, CAISO received 546 applications totaling 354 gigawatts of new clean energy resources, far more than the total electricity demand of the state.

At least one organization that’s been critical of California’s slow progress on transmission development is happy with CAISO’s new plan.

“We are enthusiastically supportive of the approach that CAISO staff have taken,” said Ed Smeloff, a managing director with nonprofit Vote Solar and a consultant to the Center for Energy Efficiency and Renewable Technologies, a group that’s been calling for transmission reforms for years.

While three of the largest of the 45 transmission projects in the plan will be open to competitive bidding from independent developers, most will be built by the state’s three big investor-owned utilities, Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric, with the costs to be borne by customers already burdened by some of the highest electricity bills in the country.

But the costs of building these new power lines pale in comparison to the costs of not building them, energy experts say. That’s not just because failing to combat climate change will drive rising costs and harms from extreme weather, but also because expanded grid capacity allows ever-cheaper clean energy to flow to customers.

Getting clean energy developers and transmission planning on the same map

Transmission lines can take more than a decade to site, permit and build — CAISO estimates an eight- to 10-year lead time for the investments laid out in its $7.3 billion plan — so acting now is vital to meeting these goals.

So is figuring out how to coordinate the work of developers to site and permit big clean energy projects and the work of regulators to site and develop where transmission is going, and vice versa.

On that front, for the first time, CAISO’s new transmission plan brings clean energy developers and transmission-planning policies onto the same page, Smeloff said.

Under previous planning methods, clean energy developers ​“would kind of make an educated guess about where there would be capacity” on the grid, he said. Developers might also file multiple interconnection requests for the same project in hopes of finding at least one spot where the grid could support them.

But that’s led to a situation where CAISO engineers are forced to study the grid impacts of far more clean energy projects than can realistically be built, he said. Meanwhile, long-term transmission planning lacked data that could clarify where the real-world development would most likely take place.

The new process, by contrast, uses ​“a zonal focus for transmission planning and coordination of procurement and interconnection reform,” he said.

In other words, it ​“starts first with commercial interest” from clean energy developers, identifying the zones where the majority of new clean energy projects are being proposed, he said. That’s a sounder footing on which to carry out the complex calculations that can indicate what combination of transmission buildouts are most likely to enable the most cost-effective pathway to get enough projects online to meet the state’s goals, he said.

Here’s a map from a draft version of CAISO’s plan released in April that shows the results.

In December, CAISO signed a memorandum of understanding with the California Energy Commission, which is in charge of siting and permitting clean energy projects, and the California Public Utilities Commission, which has authority over investor-owned utilities, to merge what had been more disconnected processes for bringing this information to bear on their work.

The result is a new transmission plan that includes upfront information on where major clean energy development is being planned in zones across the state, he said. That information then feeds into where CAISO plans to build transmission to serve it, enabling much more accurate forecasting of how much new energy capacity it will allow to be brought online, he said.

CAISO forecasts that the 45 projects in the plan will allow the development of more than 17 gigawatts of solar resources within the state and in neighboring Arizona and Nevada, more than 1 gigawatt of geothermal power in California’s Imperial Valley and in southern Nevada, and wind power projects including more than 3.5 megawatts within the state and more than 4.5 megawatts coming from as far as New Mexico and Wyoming.