California needs a $3-billion investment in new high-voltage transmission lines to avert electricity shortages and reduce costs before a wholesale market can work, State Treasurer Phil Angelides said Tuesday.
"We don't have a grid that can support a truly competitive market," Angelides said, stressing that California imports 30% of its power supplies and needs new connections to other states.
The proposal comes two days before federal and state regulators are scheduled to meet in San Francisco in an effort to redesign California's power market.
Gov.-elect Arnold Schwarzenegger wants to reopen the state's power market and has proposed disbanding the California Power Authority, a state agency that signed $43 billion in power purchase contracts during shortages in 2000 and 2001.
Angelides, however, wants to authorize the Power Authority to finance and build needed transmission lines when the private sector doesn't build them. "This is a backstop," he said.
The Power Authority would get access to short-term loans of $10 million to $20 million from the state to seek and set up transmission projects.
Angelides also wants the California Energy Commission to publish and update a 10-year power grid plan that would encourage investment in power lines where it's needed most.
"We need new criteria that will look at transmission" projects from a consumer's perspective, said S. David Freeman, former chairman of the Power Authority.
Consumer groups, including the Utility Reform Network and Consumers Union, support the proposal.