An Overview of Arizona’s Renewable Transmission

Planning ProcessSouthwest Renewable Energy Transmission Conference

Amanda Ormond – Ormond Group LLCBrian Cole – Arizona Public Service

May 21, 2010

Arizona’s Renewable Portfolio Standard

• 15% of retail electric load must be served by renewable resources by 2025

• Of this percentage, 30% (i.e. 4.5% of total retail sales in 2025) must come from distributed renewable (DE) resources by 2012 and thereafter – One-half of the distributed renewable energy

requirement must come from residential applications and the remaining one-half from nonresidential, non-utility applications

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Regulatory Background & Stakeholder Forums

Biennial Transmission Assessment (BTA)– Orders issued by the Arizona Corporation

Commission (ACC)– Conducted every two years to assess the

existing and future transmission system in Arizona

– 4th and 5th BTAs (2006 and 2008) emphasized renewable resource and associated transmission development

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Regulatory Background & Stakeholder Forums

Southwest Area Transmission (SWAT) Study Group

– Comprised of utilities and stakeholders from AZ, NM, NV, and portions of southern CA

– Conducts collaborative planning for the regional electrical transmission system

– Forms committees to focus on specific topics or studies

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Regulatory Background & Stakeholder Forums

SWAT Renewable Transmission Task Force (RTTF)

– Committee formed within SWAT as a result of the 4th BTA

– Tasked with identifying renewable resource potential and existing & future transmission

– Will conduct technical modeling of proposed renewable transmission in the SWAT footprint

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Arizona Statewide PlanningIn December of 2008, the ACC approved the Fifth BTA (Decision No. 70635). The Order directed Commission-regulated utilities to “take the results of the Arizona Renewable Transmission Task Force and…..identify the top three potential renewable transmission projects in its service territories” and “propose funding mechanisms to construct the top three renewable transmission projects.”

AZ Renewable Resource and Transmission

Identification Subgroup (ARRTIS)

Renewable Transmission Task Force (RTTF)

Southwest Area Transmission Group

(SWAT)

Utility Transmission Plans

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ARRTIS Background• Established by SWAT RTTF in January 2009• An open stakeholder process tasked with:

– Identifying potential areas for Arizona renewable resource development

– Assisting the RTTF group by providing information to assess transmission options

– Informing and assisting the utilities in their response to the 5th BTA Order

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ARRTIS Process1. Assemble group of key stakeholders 2. Gather AZ renewable resource potential 3. Identify constraint criteria4. Identify likely developable areas for

renewables5. Provide information to RTTF, and ultimately

utilities, for identification of transmission options

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ARRTIS Final Sensitivity

Map

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RTTF Finance Subcommittee

• Created by the RTTF in January 2009• Primary Objectives

– Provide the RTTF with recommendations for financing methodologies for renewable transmission projects (RTP) in Arizona

– Determine what constitutes a RTP– Provide information & recommendations to

support utilities responsible for filing responses to the 5th BTA Order

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Finance Subcommittee Final Report

• Report specifies types of RTP development costs that should be eligible for rate recovery by utilities

• Proposes development of utility-specific Renewable Transmission Action Plan (RTAP)– Utility will describe how each RTP is expected to advance

renewable resource development in Arizona

– Utility may request special cost recovery for the Commission’s consideration, which the Commission may order

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Finance Subcommittee Final Report

•RTPs include:– new transmission line(s), – upgrade(s) of existing line(s), or – the development of transmission project(s)

previously identified by the utility which provide either:o access to renewable energy resource areaso enables renewable resources to be delivered to load centers

•Did not define the amount of renewable generation that needs to be on the line

Recommendations to the Commission:– Adopt the RTAP procedure as part of the Ten

Year Plan filing requirement and the BTA process

– Coordinate RTP cost recovery with related determinations made by FERC

– RTP designation and special cost recovery should be determined by the Commission on a case-by-case basis

Finance Subcommittee Final Report

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RTTF Final Transmission Options Map

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Utility Evaluation Process

Individual Utilities File “Top 3”along with plans and funding mechanisms (Due 10/31/09)

Individual Utility Evaluation of Renewable Resource and

Transmission Options

Utility Coordination & Common Projects Identification

Individual Utility Economic Evaluations

Policy Issues Consideration and

Analysis

2008 BTA Order 70635

Workshop Input

RTTF Finance

Group Work

RTTF ARRTIS

Group Work

RTTF Group Work

2006 BTA Order 69389

2008 BTA Order 70635

Workshop Input

RTTF Finance

Group Work

RTTF ARRTIS

Group Work

RTTF Group Work

2006 BTA Order 69389

Utility Evaluation Process Overview

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Process Consisted of:• Economic Evaluation

• Qualitative Evaluation

Utility Evaluation Process

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Arizona Utilities' BTA Projects