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 .. 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.

2 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 .. 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.

3 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 .. 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.

4 114 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 .. 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.

5 163 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 .. 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.

6 195 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 .. 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.

7 232 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 .. 308 Introduction .. 308 Study Approach .. 308 Study Assumptions .. 312 2016 - 2017 ISO Transmission Plan March 17, 2017 California ISO/MID iv Study Results - System Benefits .. 316 Study Conclusions .. 323 Locational benefits Gridview and powerflow analysis.

8 324 Characteristics of Slow Response Local Capacity Resources .. 326 Introduction .. 326 Demand response participation in the ISO market and operations .. 329 Study Methodology and Assumptions .. 330 SCE Area Assessment .. 334 SDG&E Area Assessment .. 343 PG&E Area Assessment .. 345 Conclusions .. 350 Chapter 7 .. 353 7 Transmission Project 353 Transmission Project Updates .. 353 Transmission Projects found to be needed in the 2016 - 2017 Planning Cycle .. 364 Reliance on Preferred Resources .. 365 Additional achievable energy efficiency (AAEE) in PG&E service territory .. 365 Reliance on Aging Generation in the East Bay Area .. 367 Preferred resources in the LA Basin / San Diego area .. 367 Competitive Solicitation for New Transmission Elements .. 368 Capital Program Impacts on Transmission High Voltage Access Charge.

9 369 Background .. 369 Input Assumptions and Analysis .. 370 Appendix A System Data Appendix B Reliability Assessment Appendix C Reliability Assessment Study Results Appendix D 2026 Local Capacity Technical Analysis Appendix E Request Window Submissions Appendix F Project Need and Description Appendix G Contingencies on the ISO System that may Impact Adjacent Systems 2016 - 2017 ISO Transmission Plan March 17, 2017 California ISO/MID 1 Executive Summary The California Independent System Operator Corporation s 2016 - 2017 Transmission Plan provides a comprehensive evaluation of the ISO transmission grid to identify upgrades needed to successfully meet California s policy goals, in addition to examining conventional grid reliability requirements and projects that can bring economic benefits to consumers.

10 This plan is updated annually, and is prepared in the larger context of supporting important energy and environmental policies while maintaining reliability through a resilient electric system. Transmission planning issues affecting the ISO s annual transmission plans have changed materially over recent years. This year s transmission plan reflects those changes and also reflects the particular point in time the California industry is at in a number of fronts and demonstrates particular trends emerging since the ISO revised its transmission planning process in 2010. The progress past transmission plans made in addressing reliability issues is demonstrated in the steady decline in reliability projects over the last several years, especially since the the spike in infrastructure projects required to address the transition away from coastal once-through cooling gas-fired generation and the early retirement of the San Onofre Nuclear Generating Station.