SFPUC Power Business Plan POWER ENTERPRISE BUSINESS PLAN 2016 | Page 10

Spending on Transmission Segments Redundant to CAISO Our transmission options are (1) to ensure that our costs our reliance on PG&E for delivery of our supplies to our specific to the Districts are recovered in those contracts, customers. Because our customers are side-by-side (2) to cut back on the use and cost of our lines that are with PG&E’s customers, it is cost-efficient for PG&E and redundant to the CAISO grid, (3) to extend our own Power to share the costs of building and maintaining a system to stay off the CAISO grid, and (4) to share use single distribution system. We avoid redundancies and and costs of our assets by becoming a Participating duplicate facilities, but there is a significant drawback. Transmission Owner (joining the CAISO grid) or Since that single distribution system is controlled by Most of our transmission assets are used to get our Hetchy partnering with others. Cutting back usage of our own PG&E, we are reliant on PG&E and FERC as its regulator supplies to the CAISO grid. We spend an additional $45 million on lines reduces costs and looming upgrade requirements, to establish fair usage and cost sharing rules. The our transmission assets to deliver Hetchy supplies to the Districts. and cutting back on usage of the CAISO grid requires most cost-effective areas to invest in distribution and We spend an additional $16 million to maintain transmission lines substantial investment. Building out our transmission reduce our need for PG&E’s grid are redevelopment that get our supplies to Newark and closer to our customers, but system could be cost-effective as our needs grow, or if areas, where our interconnections with PG&E’s grid are using this longer pathway on our own system does not reduce we are able to partner with others to share costs and currently concentrated, and where we are planning for our costs for use of the transmission grid to complete delivery. ownership responsibilities. We are currently determining sales growth, primarily along the eastern waterfront and While these lines provide multiple partial pathways, these lines are if the Districts are willing to cover the costs of maintaining mid-market areas. Building and maintaining our own redundant, providing no cost savings and little or nothing in the way the District connections. From there, we will develop lines, even if duplicative, reduces our reliance on PG&E, of reliability benefits. a plan for cutting back on our use of the Newark and reduces our costs for PG&E distribution service, and District Connections until our revenues grow or we are avoids disputes with PG&E in the long term. Nevertheless, able to partner to justify the costs of needed upgrades. we have to be strategic by targeting Power’s distribution District Deliveries Newark Deliveries investments in areas that are both cost-effective and Hetchy to Grid Fifth, we must increase investment in local distribution promotive of reduced reliance on PG&E. assets (see Fig. 7) to further reduce costs and to reduce Holm Powerhouse $45M $16M r we Po Oakdale/ Turlock Newark Moccasin Powerhouse Kirkwood Powerhouse Power Power’s Customers Lines 3, 4 er Pow PG&E Distribution Grid CAISO Transmission Grid Warnerville Standford/ Modesto es Lin r we Po 6 5, es n i L 7, 8 Figure 6: This chart illustrates the Power Enterprise transmission lines and their redundancies to the CAISO transmission grid. 08 SFPUC Power Business Plan 2016 SFPUC Power Business Plan 2016 09