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California ISO Selects LS Power for Gates Transmission Reliability Project

Jan. 22, 2020
The Gates 500 kV Dynamic Reactive Power Support Project will mitigate high transmission grid voltages upon the shutdown of the Diablo Canyon Power Plant in 2025.

 LS Power Grid California, LLC, has been selected by the California Independent System Operator (California ISO or CAISO) as the approved project sponsor to finance, construct, own, operate and maintain the Gates 500 kV Dynamic Reactive Power Support Project. 

The Gates Project was approved by the CAISO governing board in March 2019 as a critical reliability project to mitigate high transmission grid voltages upon the shutdown of the Diablo Canyon Power Plant in 2025.

The CAISO conducted a competitive selection process pursuant to the Federal Energy Regulatory Commission's Order No. 1000 and selected LS Power's proposal from a total of 10 qualified proposals, all of which contained some form of cost containment to protect consumers. The CAISO selection report stated that LS Power's proposal "will provide lower cost, greater rate certainty, and less cost risk than the proposals of the other project sponsors." 

LS Power's project is designed for high availability, meets or exceeds the CAISO specifications, includes cost containment guarantees and will result in costs that are less than half of the estimated cost provided by the local incumbent utility to the CAISO. 

"This is yet another example of the benefits of competition in the transmission sector.  Developers are willing to compete to have the right to build these projects and are voluntarily offering meaningful cost protection and rate concessions when given the opportunity to compete.  The selection of LS Power's proposal by CAISO is expected to save California consumers more than $100 million," said Paul Thessen, president of LS Power.

This is LS Power's second competitive transmission selection by CAISO.  The first was the 2016 selection of LS Power affiliate DesertLink, LLC for the Harry Allen to Eldorado 500 kV Transmission Project, a 60-mile transmission line that is under construction and planned to be placed in service by May 2020. CAISO concluded in that case that DesertLink's proposal included "more robust capital/construction cost and ROE caps that should result in lower costs and present less risk compared to the proposals of the other two project sponsors, thus benefiting ratepayers."

"We are pleased that the CAISO once again selected LS Power, based on our successful track record and robust cost containment commitments, ensuring California's important transmission needs are served in a way that brings significant benefits for ratepayers," said Thessen. The project to be constructed by LS Power consists of two static synchronous compensator (STATCOM) units to be installed near the existing Gates 500 kV substation in Fresno County, California.  The in-service date is planned for June 2024. 

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