By J’AIME ROSALES
Business Journal Writer
Starting in 2023, the Central Valley will have a new, more reliable source for energy. A public-private partnership will create the San Luis Transmission Project connecting the electric substations in Tracy to the San Luis, O’Neill and Dos Amigos substations found in the Los Banos area.
The project consists of Western Area Power Administration, Duke-American Transmission Co., the U.S. Bureau of Land Management and the San Luis & Delta Mendota Water Authority.
In 2016, the agreement between the Western Area Power Administration (WAPA) and Pacific Gas & Electric (PG&E) expired. This agreement provided for the delivery of power from the San Luis Unit to the federal Central Valley Project. Around the same time that the contract expired in 2016, the Bureau of Reclamation (the agency that oversees the Central Valley Project) requested that WAPA develop a new transmission service arrangement to replace the expiring contract.
Duke-American Transmission Co. submitted a request concurrent with the expiring contract between WAPA and PG&E, to utilize the same transmission corridor and supply power to the Central Valley Project. In order to maximize effectiveness and limit environmental impacts of these requests, a public-private partnership was formed to execute the project.
Public-private partnerships are formed between government agencies and private companies that have similar vested interests in a specific project. Sharing financial investments on the project lowers costs for each party and the public and minimizes risks, while often accelerating completion timelines to the benefit of all parties—including end-users.
In this case, Central Valley Project water users will benefit with lower and more stable costs as the project comes online and the entire community will benefit as there are greater opportunities to diversify the Central Valley’s energy portfolio.
The San Luis Transmission Project (SLTP) will give residents a reliable source of low-cost energy in the Valley.
“It would enhance delivery of low-cost WAPA power to transport federal Central Valley Project water into the San Joaquin Valley and to the Bay Area water agencies, farms, and wetlands,” said Frances Mizuno with the San Luis & Delta Mendota Water Authority. “The SLTP will support agriculture in the most fertile farm land that is responsible for growing the majority of produce in the U.S.”
With the recent drought, compounded with new state water regulations, Valley farmers are desperate for reasonable and reliable electric and water sources. Mizuno notes that the new transmission line “would enhance reliability and enhance options for adding renewable generation and optimize the use of a constrained corridor.”
In other words, as described by Luella Dooley-Menet with Duke-America Transmission Co, “since the project will use an existing transmission corridor, it will minimize costs and farm and environmental impacts.”
Local farms are looking forward to the benefits provided by the new transmission line.
“As a San Joaquin Valley farmer, reliable, affordable power is essential to my business and the local economy,” said Sarah Woolf, a grower based in Cantua Creek. “The San Luis Transmission Project also increases the State’s ability to meet its renewable energy goals by creating more options for increasing renewable energy production in the Valley. That’s good for farms, it’s good for rural communities and it’s good for the environment.”
The San Luis Transmission line will have 600 megawatts of electricity capacity. 400 megawatts have been dedicated to water customers with the remaining 200 megawatts “available to area utilities and renewable energy developers,” according to Dooley-Menet. She adds that Duke will soon begin marketing the remaining 200 megawatts of additional capacity.
Since the expiration of the contract with PG&E, transmission services are purchased through the California Independent System Operator (CAISO), a self-described “non-profit public benefit corporation that keeps power moving to homes and communities.”
Essentially, the San Luis & Delta Mendota Water Authority, and their customers, are paying the going rate of transmission services since they are currently out of contract. Since it operates on a supply and demand system, rates can vary from day-to-day, let alone rise and fall over the course of a single day.
“The cost of building the San Luis Transmission Project is our cost-effective option to paying CAISO rates,” Mizuno said.
The project is fully permitted and in the construction design phase according to a release from the public-private partnership. Construction on the San Luis Transmission line will begin in 2021 and is scheduled to be operational in 2023.