Arizona Regulators Reject Cross-Border Transmission Line

The Arizona Corporation Commission (ACC) recently rejected an application by Southern California Edison Company (SCE) to construct a new transmission line from Devers, California to Palo Verde, Arizona.  The proposed Devers-Palo Verde No. 2 line "• a 230-mile, 1200 MW line estimated to cost approximately $600 million "• had already won approval of the California Public Utilities Commission (CPUC).  According to the CPUC, the line would serve as an important means of reducing the substantial congestion in southern California by expanding the transmission capacity into the area and allowing California utilities to import significant amounts of power from Arizona.  The ACC, on the other hand, dismissed the project as essentially allowing California to plug a "230-mile extension cord" into its generation supply, something the ACC found untenable at a time when Arizona's own population is growing rapidly. 

With both SCE and the CPUC considering appeals, the ACC's decision potentially sets up a fight under provisions of the Energy Policy Act of 2005 that allow FERC to site transmission facilities in certain Department of Energy (DOE)-designated National Interest Electric Transmission (NIET) Corridors for which state regulators have "withheld" approval for more than a year.  In a rulemaking issued late last year, FERC interpreted the word "withheld" in the statute to also mean "denied," thus potentially allowing transmission developers to bypass recalcitrant state regulators in favor of federal regulators.  In May, DOE proposed to designate an area encompassing the Devers-Palo Verde No. 2 line as a NIET corridor.