DOE maps out $300 million deal to upgrade Path 15 in California

By the OGJ Online Staff

HOUSTON, Oct. 19 -- The Department of Energy said yesterday that Pacific Gas & Electric Co., other private energy companies, and the federal agency Western Area Power Administration (WAPA) have agreed to a $300 million deal to upgrade transmission facilities in California known as Path 15.

Path 15 is a set of electrical transmission lines in the center of California connecting the southern part of the state with northern California. The transmission path has been a serious bottleneck in transporting power. It contributed to many of the blackouts suffered in northern California. Abundant power in the south could not be moved to the north without overloading the lines.

The upgrade will be financed and owned through a 45-45-10% split. Public power entities in California including the Transmission Agency of Northern California will own 45%. Private companies including Kinder Morgan Power Co., PG&E National Energy Group, and Williams Energy Marketing and Trading Co. will have a 45% stake and WAPA will act as project manager retaining 10%.

"It's not known yet exactly how much of the project will be owned by PG&E yet," said said Jon Tremayne, spokesman for PG&E. "Our portion includes substation work. Whatever that costs will be our part of the project."

Path 15 has been considered for expansion by its owner PG&E for more than a decade, But PG&E could never get state regulatory agencies on board for the expansion. Other power company customers would also benefit from the upgrade. These companies could not be convinced until now that it was in their interest to help bear the costs, Tremayne said.

After Path 15 was identified as a clear culprit for many of the blackouts last year, the California Public Utilities Commission ordered PG&E last spring to submit a proposal to begin the process of state regulatory approval. PG&E complied and the CPUC issued its draft environmental impact report on the project last week (OGJ Online Oct. 10, 2001).

Currently there are two identical projects to upgrade Path 15 in different venues.

"I don't know how this new federal agreement impacts the proposed project at the commission," Tremayne said.

The federal project is slated to begin construction in spring 2003 and be operational by summer 2004. The timeline for the state project is not as clear.