Monday, December 13, 2010

Release of Colorado STAR Report on Electrical Power Transmission Imminent

    The State of Colorado recognizes the need for additional electrical power transmission infrastructure in the state:

"Transmission is . . . a missing link that threatens to lead the state to a genuine energy crisis. Colorado's capacity to move electricity from where it is generated to where it is used is constrained. In short, we need more electric transmission capacity, and we need it soon. Failure to upgrade existing transmission lines and to deploy new transmission infrastructure in Colorado could have severe and long-lasting consequences for the state – not the least of which is an inability to put online the large amounts of new renewable resources that the public desires."

Colorado Governor's Energy Office, Renewable Energy Development Infrastructure (REDI) report, pg. 44.

The Governor's Energy Office (GEO) plans to release the third in a series of studies addressing the need for transmission in the state by the end of December. The key question addressed is how Colorado will meet the loads and needs of the future. Morey Wolfson, Transmission Program Manager, GEO, provided an introduction to the report during the October meeting of the Rocky Mountain Transmission Group.

According to the presentation, the STAR report poses the question of who pays for transmission and raises a concern that a regional transmission organization (RTO) in the west is unlikely. An RTO is a federally-regulated, independent, non-profit entity established to plan and operate the regional transmission assets under its functional control and provide non-discriminatory wholesale transmission service within its defined geographic region. With respect to the question of who pays for transmission, in the western interconnection, there is currently no mechanism that enables cost allocation and recovery for transmission lines across a multi-state region. An RTO could provide the mechanism to allocate and recover costs.

Why is an RTO unlikely? One challenge to acceptance of the RTO structure in the west is the impact to state's rights. The RTO structure; however, would enable participation in key transmission planning decisions by states and other stakeholders; and protect consumers by ensuring fair, transparent consideration of necessary transmission upgrades or other grid investments. In addition, as an independent entity, an RTO is in the position to advocate for consistency in interregional cost allocation rules, and can work with the state to coordinate transmission and generation siting decisions in-line with the state's goals for energy and economic development. This type of planning can avoid the need to build duplicative new transmission lines and by addressing the cost allocation and recovery hurdle, can enable new transmission development to help resolve interconnection queue delays to bring renewables online more quickly, thereby facilitating rural economic development.

Moreover, although the Colorado Clean Air Clean Jobs Act (for more background see posting on October 11, 2010) is a first step in preparing the state for imminent climate change legislation, infrastructure development will be needed to accommodate the shift in the electricity generation fuel mix. A study by the North American Electric Reliability Corporation (NERC) released October 2010 and available at:, assessed the impacts to bulk power system planning and operations if four pending EPA rules are implemented. The study finds that "without additional power production or demand-side resources beyond those in current regional plans, the combined effects of the four EPA rules (Combined EPA Regulatory Scenario) are shown to significantly affect Planning Reserve Margins and, in most Regions/Subregions, more resources would be required to maintain NERC Reference Margin Levels." The study concludes that emerging demands are shifting the current generation mix and new infrastructure will be needed in the short term to support this shift.

The STAR report should provide additional insight into where Colorado currently stands on this issue.