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California adding more power lines to unclog grid

California energy planners said on Tuesday they were making progress toward adding power lines to the state's congested electric grid but they must find better ways to work with federal officials and nearby states to identify and build badly needed projects.

Officials from three California agencies — Energy Commission, Public Utilities Commission (PUC), and Power Authority — met in Sacramento to review the state's Energy Action Plan. The plan was designed last year to ensure the state has reasonably priced power and natural gas supplies and to add more renewable energy resources like solar and wind power.

California's three investor-owned utilities — PG&E Corp.'s ((PCG.N)) Pacific Gas & Electric unit, Edison International's ((EIX.N)) Southern California Edison, and Sempra Energy's ((SRE.N)) San Diego Gas & Electric — have spent about $2 billion on grid work since 1996, officials said.

Transmission projects have added 13,000 megawatts since January 2001 — power for about 13 million homes — and utilities are eyeing 140 more projects to string new lines, replace old equipment and unclog congested paths on the grid.

Grid congestion was a big contributor to California's power emergency in 2000-2001 when a flawed bid to deregulate the state power market and soaring electricity prices crippled the three utilities, tipping Pacific Gas & Electric, the state's biggest utility, into bankruptcy.

Barbara Hale, director of strategic planning at the PUC, said new projects would clear clogged transmission paths in the San Diego area and import low-cost power from Mexico, while San Francisco would get a new PG&E power line to avoid a repeat of a costly blackout of the city in December 1998.

Another 350 megawatt, direct current transmission line running under San Francisco Bay to deliver more power to the city is being planned, according to the PUC and Babcock & Brown, an investment banking firm that would develop the project.

A critical grid corridor near Fresno in the Central Valley would add a third power line in December to ease congestion on electricity flows between the northern and southern parts of the state.

Officials from the three agencies said they must develop better tools to measure the costs and benefits of power projects and streamline regulatory reviews by the PUC and Independent System Operator, the state's grid manager. There also should be more grid coordination with neighboring states and the Federal Energy Regulatory Commission, they said.

March 2 (Reuters) distributed by Energy Central News Service, 2004.