On March 15, 2017, the Board of Governors of the California Independent System Operator Corporation (“CAISO”) approved the 2016-2017 Transmission Plan, which is an annual, comprehensive assessment of transmission needs of the CAISO system over a 10-year planning horizon. According to the accompanying memorandum from CAISO Management, the Transmission Plan “provides a comprehensive evaluation of the ISO’s transmission grid to identify upgrades needed to successfully meet California’s policy goals, in addition to examining conventional grid reliability requirements and transmission projects that can bring economic benefits to consumers.”

Section 24.4.10 of the CAISO Tariff requires that the Transmission Plan be presented to the Board of Governors for approval, and specifies that upon approval, “all needed transmission addition and upgrade projects and elements, net of all transmission and non-transmission alternatives considered in developing the comprehensive Transmission Plan, will be deemed approved by the CAISO Governing Board.” Section 24.4.10 also states that transmission upgrade and addition projects with capital costs of $50 million or less can be approved by CAISO Management and may proceed to permitting and construction prior to Board approval of the Transmission Plan.

In the memorandum to the Board of Governors from CAISO Management that accompanied the Transmission Plan, the following key findings and conclusions were identified: (i) no policy-driven transmission projects were identified as needed for meeting the 33% Renewable Portfolio Standard state policy objective; (ii) no economically-driven transmission projects were identified as needed; and (iii) a review of previously-approved transmission projects, given materially-changed circumstances underpinning the original need for the projects, resulted in the cancellation of thirteen primarily local sub-transmission projects in the Pacific Gas & Electric (“PG&E”) service area. Further, CAISO Management recommended that fifteen projects in the PG&E service area and one project in the San Diego Gas & Electric service area be placed on hold pending further review in the 2017-2018 planning cycle due to materially-changing circumstances. CAISO Management also requested that the Board of Governors approve two reliability-driven transmission projects identified as needed “to ensure compliance with [North American Electric Reliability Corporation] and ISO planning standards,” and estimated the cost of these projects to be approximately $24 million. CAISO Management noted that due to timing and the unique characteristics of the projects, neither of these projects had been approved by CAISO Management in advance of the Board meeting, despite being below the $50 million threshold established in the Tariff.

The Transmission Plan and associated Board materials may be found here.