Oil Savings From Greater Intertie Capacity Between the Pacific Northwest and California

GAO undertook a study of the benefits from expanding the Pacific Northwest-Southwest electricity interconnections as part of its continuing effort to assess the Federal power marketing agencies' operations and because the existing interties between the Pacific Northwest-Southwest cannot carry the potential for all power exchanges. The study involved the Bonneville Power Administration, Western Area Power Administration, the Federal Energy Regulatory Commission, the Economic Regulatory Administration (ERA), and States in the Northwest and Southwest. At present, three high-voltage transmission lines (interties) connect California and the Pacific Northwest. These lines were jointly developed by public and private power interests, and have permitted Bonneville and Northwest utilities to sell California utilities surplus power. Surplus energy sales allow the Northwest to sell a resource which may otherwise be wasted, and allow California utilities to turn off oil-powerplants. GAO studied three proposals for increasing transmission capacity.

GAO found that, in addition to lowering electric rates in the Pacific Northwest and California, an annual average of 4 million barrels of oil could be saved by expanding the intertie system between these areas. A little over half the oil savings would result from the sale of surplus energy from the Northwest, while slightly less than half would come from the sale of additional surplus energy from Canada. However several issues must be addressed before expansion can occur. Uncertainty exists among some California utilities, which are parties to the proposed expansion, over whether benefits from expansion will in fact materialize. In addition, there are some institutional and legal issues which must be addressed. GAO believes that to achieve this oil savings a closely coordinated effort between industry and the Federal Government will be required.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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