March 17, 2017 - California ISO

1 March 17, 2017 BOARD APPROVED Foreward to Board-Approved 2016- 2017 Transmission Plan At the March 15, 2017 ISO Board of Governors meeting, the ISO Board of Governors approved the 2016- 2017 Transmission Plan. 2016- 2017 ISO Transmission Plan March 17, 2017 California ISO/MID i Table of Contents Executive Summary .. 1 Purpose of the Transmission Plan .. 4 The Transmission Planning Process .. 5 State Agency Coordination in 5 Key Reliability Study Findings .. 6 Renewables Portfolio Standard Policy-driven Transmission Assessment .. 6 Key Economic Study Findings.

2 9 Non-Transmission Alternatives and Preferred 9 Conclusions and Recommendations .. 10 Chapter 1 .. 11 1 Overview of the Transmission Planning Process .. 11 Purpose .. 11 Impacts of the Increasing Pace of Industry Transformation .. 13 Structure of the Transmission Planning Process .. 21 Phase 1 .. 21 Phase 2 .. 24 Phase 3 .. 26 Interregional Transmission Coordination per FERC Order No. 1000 .. 27 ISO Processes coordinated with the Transmission Plan .. 29 Chapter 2 .. 33 2 Reliability Assessment Study Assumptions, Methodology and Results.

3 33 Overview of the ISO Reliability Assessment .. 33 Backbone (500 kV and selected 230 kV) System Assessment 33 Regional Area Assessments .. 33 Peak Demand .. 34 Reliability Standards Compliance 35 NERC Reliability Standards .. 35 WECC Regional Criteria .. 35 California ISO Planning Standards .. 35 Study Assumptions and Methodology .. 36 Study Horizon and Years .. 36 Transmission Assumptions .. 36 Load Forecast Assumptions .. 37 Generation Assumptions .. 40 Preferred Resources .. 48 Firm Transfers .. 53 Operating Procedures.

4 54 Study Scenarios .. 55 Contingencies .. 59 Study Methodology .. 61 PG&E Bulk Transmission System Assessment .. 63 PG&E Bulk Transmission System Description .. 63 Study Assumptions and System Conditions .. 64 Assessment and Recommendations .. 67 2016- 2017 ISO Transmission Plan March 17, 2017 California ISO/MID ii PG&E Local Areas Assessment .. 72 Humboldt Area .. 72 North Coast and North Bay Areas .. 76 North Valley Area .. 80 Central Valley Area .. 83 Greater Bay Area .. 87 Greater Fresno Area .. 92 Kern Area.

5 95 Central Coast and Los Padres Areas .. 98 Review of previously approved projects .. 102 Southern California Bulk Transmission System Assessment .. 105 Area Description .. 105 Area-Specific Assumptions and System Conditions .. 107 Assessment and Recommendations .. 114 SCE Local Areas Assessment .. 116 Tehachapi and Big Creek Corridor .. 116 North of Lugo Area .. 122 East of Lugo .. 126 SCE Eastern and MWD Area .. 131 SCE Metro Area .. 134 Valley Electric Association Local Area Assessment .. 137 Area Description.

6 137 Area-Specific Assumptions and System Conditions .. 137 Assessment and Recommendations .. 138 San Diego Gas & Electric Local Area Assessment .. 139 Area Description .. 139 Area-Specific Assumptions and System Conditions .. 140 Assessments and Recommendations .. 144 Chapter 3 .. 153 3 Policy-Driven Need Assessment .. 153 Study Assumptions and Methodology .. 153 33 Percent RPS Portfolios .. 153 Testing Deliverability for RPS .. 155 Policy-Driven Deliverability Assessment Results and Mitigations 159 Chapter 4 .. 163 4 Economic Planning Study.

7 163 Introduction .. 163 Study Steps .. 164 Technical Approach .. 165 Tools and Database .. 167 Study Assumptions .. 169 System modeling .. 169 Load demand .. 169 Generation resources .. 169 Transmission assumptions and modeling .. 169 Energy Imbalance Market (EIM) modeling .. 172 Financial Parameters Used in Cost-Benefit Analysis .. 172 Congestion Identification and Scope of High Priority Studies .. 175 Congestion identification .. 175 2016- 2017 ISO Transmission Plan March 17, 2017 California ISO/MID iii Economic Planning Study Requests.

8 179 Scope of high-priority studies .. 186 Congestion Mitigation and Economic Assessment .. 187 COI 187 Path 45 and IID-SDGE Congestions .. 190 193 Chapter 5 .. 195 5 Other Studies and Results .. 195 Reliability Requirement for Resource Adequacy .. 195 Local Capacity Requirements .. 195 Resource adequacy import capability .. 198 Long-Term Congestion Revenue Rights Simultaneous Feasibility Test Studies .. 200 Objective .. 200 Data Preparation and Assumptions .. 200 Study Process, Data and Results Maintenance .. 201 Conclusions.

9 201 Chapter 6 .. 203 6 Special Reliability Studies and Results .. 203 Risks of early economic retirement of gas fleet .. 204 Study Scope .. 205 Risk to Transmission System Reliability .. 205 Risk to Overall System Resource Reliability .. 213 Frequency Response Assessment Generation Modeling .. 218 Frequency Response and Over generation issues .. 218 Need for additional studies .. 222 Generator Modeling Issues in the ISO studies .. 223 Study Plan and Methodology .. 226 Study Results .. 227 Gas/Electric Coordination Special Study.

10 232 Gas/Electric Coordination Transmission Planning Studies for Southern California .. 232 Gas/Electric Coordination Transmission Planning Studies for Northern California .. 253 50 Percent RPS Special Study .. 262 Interregional Coordination Background .. 263 Objective .. 265 Portfolios .. 266 Study Components .. 275 Base Case Assumptions .. 277 Results of Production Cost Simulations .. 280 Reliability Assessment of Portfolios .. 286 Results of 50 Percent RPS Portfolio Deliverability Assessment .. 296 Conclusions and Next 303 Benefits Analysis of Large Energy Storage.