Can FERC deliver transmission?

This May, the Arizona Corporation Commission (ACC) rejected a proposal by Southern California Edison (SCE) to build Devers-Palo Verde No. 2 (DPV2)—a 230-mile-long, high-voltage transmission line connecting California and Arizona. The line, approved by the California Public Utilities Commission (CPUC) four months earlier, would enable SCE to import additional low-cost electricity from Arizona. The ACC’s rejection of DPV2 highlights a significant challenge for state and regional resource planners—weighing state interests against the regional benefits of interstate electricity commerce.

 

State v. state

Although it unanimously approved DPV2, the CPUC found that the project has several significant unmitigable environmental impacts. Nevertheless, it also determined that DPV2 would “provide significant economic benefits . . . , increase the reliability of the interstate transmission network . . . [and provide] . . . an economic hedge” against transmission and generation outages and natural gas price hikes. Given these benefits, the CPUC concluded that the environmental impacts of DPV2 would be acceptable.

The ACC, by contrast, rejected DPV2 as a California “power grab”—both literally and figuratively. Commissioner Kris Mayes scorned the line as a “230-mile extension cord into Arizona . . . [that] . . . would come at the expense of Arizona ratepayers, Arizona air quality, Arizona land, Arizona water, and Arizona wildlife.” Commissioner Jeff Hatch-Miller called on California “to step up to the plate and begin building its own generation—in California.”

The ACC’s rejection places the future of DPV2 in serious doubt.