Dive Brief:

The California ISO's Board of Governors last week approved the grid operator's 2017-2018 Transmission Plan to maintain reliability, while canceling or modifying several previously approved projects to avoid $2.6 billion in future costs.

The approved plan identified 17 new transmission projects at a combined cost of more than $270 million. But it also recommended canceling 18 transmission projects, and changing another 21 projects in Pacific Gas and Electric's service area and two in the San Diego Gas & Electric area.

The changes were "mainly due to changes in local area load forecasts," the operator said in a statement, driven by energy efficiency programs and increasing levels of residential, rooftop solar generation.

Dive Insight:

The transmission plan approved last week may be more significant for the projects it recommended canceling, than for the projects approved. The recommendations follow a lengthy stakeholder process that included public comment.

"The changes were mainly due to changes in local area load forecasts, and strongly influenced by energy efficiency programs and increasing levels of residential, rooftop solar generation," the grid operator said in a statement. Another seven PG&E projects are either on hold or recommended to be delayed "pending further review in future transmission planning cycles."

CAISO's new plan also considers the impact of a 50% renewable energy resources policy and how it could impact gas-fired generation retirements. The board changed rules to improve the congestion revenue rights auction, a mechanism for market participants to hedge their congestion cost risks. The rule changes are expected to be in place before the 2019 annual auction held in July 2018.

CAISO's plan looks at non-transmission and preferred-resource alternatives. In the Moorpark and Santa Clara sub-area, for example, a fourth 230 kV circuit will help retire the Mandaly and Ormond Beach power stations, the grid operator concluded.

Federal regulators have also scheduled a technical conference to examine issues on the California grid.

The Federal Energy Regulatory Commission directed its staff to convene a technical conference on local transmission planning and two issues including Southern California Edison and PG&E. The technical conference will take place on May 1 at the commission's headquarters.