A nonprofit that wants to invest up to $1 billion in Pacific Gas and Electric’s transmission system — and to spend most of its profits on community benefit projects — has received approval to join CAISO as a participating transmission owner. 

The CAISO Board of Governors approved the application from Citizens Pacific Transmission LLC on Nov. 12.  

In other action during the meeting, the board approved modifications to two projects in CAISO’s 2021/22 transmission plan. The changes are intended to address the rapidly increasing load forecast in the San Jose area that is due partly to data centers. 

Nonprofit, Utility Partnership

Citizens Pacific is a subsidiary of Citizens Energy Corp., whose founder and chair is U.S. Rep. Joseph P. Kennedy II, son of the late U.S. Sen. Robert F. Kennedy. 

Under a partnership with PG&E, the utility will offer Citizens Pacific options to lease some of its electric transmission assets. An investment of up to $1 billion would come from five separate 30-year leases. 

Citizens Pacific plans to make an upfront rent payment to PG&E — allowing the utility to accelerate work on its transmission system. The nonprofit would recover its costs through the CAISO high-voltage transmission access charge. Citizens then would funnel profits from the arrangement into community benefit programs. 

PG&E will be responsible for the development and construction of the projects. Citizens Pacific will become a participating transmission owner after FERC approval and transfer of operational control to CAISO. 

Citizens has participated in similar partnerships with San Diego Gas & Electric. But this time, the nonprofit plans a portfolio of transmission projects rather than seeking approval for one project at a time. 

Among the nine projects are modifying 500-kV capacitors at Table Mountain and upgrading a Tesla substation. 

Neil Millar, CAISO’s vice president of infrastructure and operations planning, described the portfolio as primarily reliability-driven projects intended to meet existing and emerging load growth and bring in renewable energy from other parts of the state. 

“We applaud all efforts taken to ensure the transmission we need is built and built on a timely basis,” Millar said. 

Citizens’ past community benefit projects have included rooftop solar on the homes of low-income residents, a 39-MW community solar project in Imperial Valley, and electric vehicles and charging infrastructure for nonprofits in San Diego County such as Meals on Wheels.  

For the new set of projects, the nonprofit plans to put half its profits into community projects for the first $200 million funding tranche, increasing to 90% on the fifth and final $200 million tranche, Citizens Energy CEO Peter Smith told the CAISO board. Community benefits associated with the PG&E projects haven’t yet been determined. 

“This sure seems like a win-win,” said Board of Governors Chair Jan Schori. 

Transmission Plan Update

The CAISO board also approved modifications to the 2021/22 transmission plan involving two projects that were awarded competitively and are under development. They are a high-voltage direct current line from PG&E’s Newark substation and Silicon Valley Power’s northern receiving station (NRS) and an HVDC line between two PG&E substations: Metcalf and San Jose B. 

The modifications are needed because of load growth in the San Jose area. The 10-year load forecast for the area in the 2021/22 plan was about 2,100 MW. That has grown to 3,400 MW for a base case scenario that includes committed data center requests, according to Binaya Shrestha, CAISO’s manager of regional transmission north. Shrestha cited electric vehicle charging as another factor in the load growth. 

A sensitivity analysis that includes additional data center loads increases the forecast to 4,200 MW. 

The load growth forecast also was discussed during a Sept. 23 kickoff meeting for CAISO’s 2024/25 transmission planning process. (See Data Centers Contribute to 60% Increase in San Jose Load Forecast.) 

The approved modifications are a replacement of the HVDC line between the Newark and NRS substations with a high-capacity 230-kV AC line and a 1,000-MW rather than a 500-MW HVDC link between the Metcalf and San Jose B substations. 

Other transmission reinforcements for the San Jose area will be evaluated through the 2024/25 transmission planning process, Shrestha said.