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SDG&E targets 2016 to complete Bay Boulevard Substation

Early this summer, SDG&E said it might still make its original deadline to complete the Bay Boulevard Substation replacing the aging South Bay Substation.

As of mid-August, the electric utility reported the job at the Chula Vista construction site was about 22 percent complete.

In just the past couple of months, the project site has advanced from early-site preparation, including early grading, to being about 70 percent graded. SDG&E expects the work on the transmission portion to begin in September.

Contractor Black & Veatch — SDG&E's engineer, procurement and construction contractor — has been grading since February, and is already contracted for the third phase, which will include demolishing and removing the old South Bay Substation, once the new Bay Boulevard Substation in energized.

SDG&E expects the third-phase demolition to be done by July 2017, clearing the way for future development in the Chula Vista Bayfront Master Plan.

Both the city of Chula Vista and SDG&E have said the plan’s 20-year slate of development projects will rely heavily on energy upgrades provided by the new Bay Boulevard Substation.

As of mid-August, the utility said it wasn't prepared to confirm which contractor has been selected for the middle phase of the project, involving the transmission line reconfiguration.

SDG&E representative Amber Albrecht said contractors have been selected, but that SDG&E was continuing to work out the contract. The utility is aiming for May 2016 for new facilities to be ready for reconfigured transmission lines.

“At this time, we hope the transmission trench, conduit and foundation contractor will mobilize by mid-September,” Albrecht said.

A notice to proceed for the transmission work was expected to be submitted to the California Public Utilities Commission by Aug. 14, allowing for SDG&E to begin construction of underground structures and overhead foundations.

Albrecht said construction of the masonry walls for the control shelter began Aug. 11, and that SDG&E expects to see steel structures going up by October.

“Additionally, the power transformers will be in place by mid-October,” Albrecht said.

The project budget estimate continues to land between $145 million and $175 million. That hasn’t changed since similar figures were given in early summer by SDG&E's director of major projects, Alan Colton.

He said that because of newer requirements from the California Coastal Commission for the additional underground installation of transmission lines, the project will likely cost somewhere closer to the middle of that range — perhaps $160 million — than earlier estimates toward the lower end.

Because most of the project deals with larger 200-kilovolt transmission lines and facilities, the costs are mostly subsidized across the state’s investor-owned utilities through a socialized transmission access charge.

SDG&E's ratepayers make up about 10 percent of the state's investor-owned utility customers, Colton said. That figure is used to divide costs statewide and helps put into perspective what local ratepayers may feel from the Coastal Commission’s added requirement for more underground transmission lines.

"So, an increase [from the original cost estimate] — 10 percent of that increase is what the [SDG&E] ratepayers will encounter," Colton said.

While that’s a factor in determining the impacts to local ratepayers, it’s not the only factor, he said.

The Federal Energy Regulatory Commission must approve the costs, and Colton said it could factor in the depreciation of other assets and come up with a number that doesn’t exactly correlate with the increased costs for underground transmission lines.

The addition of more underground transmission lines than originally planned for was only one of the conditions set by the Coastal Commission’s development permit.

Another condition — which, together with the additional underground lines made up the Bayfront Enhancement Fund Alternative — was that SDG&E would create a pair of endowments totaling $2.5 million, benefiting the Living Coast Discovery Center in Chula Vista and the U.S. Fish and Wildlife Service’s marshland management in southern San Diego Bay.

SDG&E established the $2 million endowment for the continued operation of the Living Coast Discovery Center in February.

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