Pacic Intertie:

The California Connection on the Electron Superhighway

May 2001 Council Document 2001-11
2 The Pacic Intertie: Electron Superhighway

Executive Summary

F

or 33 years, electricity consumers on the West 

Coast have benefited from a unique arrangement that allows large amounts of power to 

be transmitted between the Pacific Northwest and the 

Desert Southwest. The high-voltage transmission lines 

that make this power-sharing possible collectively are 

called the Pacific Intertie.

The Intertie includes three alternating current (AC) 

lines and one direct current (DC) line. Together, they 

comprise the largest single electricity transmission program in the United States.

California enjoys the greatest benefit from the Intertie. In the last 15 years, for example, the Northwest 

has sent more electricity to the Southwest -- mostly to 

California -- every year than it has received. Power 

generated in the Northwest has saved Southwest utilities 

more than 2.8 trillion cubic feet of natural gas that would 

have been burned in power plants.

Because large amounts of Northwest power can be 

transmitted reliably to the Southwest, less power has 

been generated at fossil-fuel power plants -- an important benefit in a part of the country with chronic air pollution problems. Conversely, because the Northwest has 

been able to import power from California, particularly 

overnight when demand is low, water can be reserved in 

reservoirs that otherwise would be used to make electricity -- an important benefit in a part of the country where 

hydropower operations affect threatened and endangered 

species of fish. As well, money that southwestern utilities pay for power from the Bonneville Power Administration helps finance fish and wildlife restoration projects 

in the Columbia River Basin.

Recently, Bonneville announced it will spend $35 

million to modernize its portion of the DC line and 

related facilities. In combination with modernization 

efforts undertaken by the California partners, the DC line 

will maintain its 3,100-megawatt capacity far into the 

future. The equipment replacements are expected to be 

complete in November 2003.
The Pacic Intertie: Electron Superhighway 3

When the weather is hot in California and the 

Desert Southwest, it is comparatively cool in the 

Pacific Northwest. And when the weather is 

cold in the Pacific Northwest it is comparatively warm 

in California and the Desert 

Southwest.

For 33 years, electricity 

consumers on the West 

Coast have enjoyed a 

unique electricity transmission arrangement that takes 

advantages of those seasonal weather differences 

to share large amounts of 

power between the Desert 

Southwest and the Pacific 

Northwest. In the spring 

and summer, when generators generally have surplus 

power in the Northwest and 

temperatures climb in the 

Southwest, power -- in the 

spring, mostly power that 

is completely surplus to 

Northwest needs, and in the 

summer, on-peak deliveries 

subject to off-peak energy 

returns, -- is shipped south 

to help meet increasing 

demand, particularly for air 

conditioning. Conversely 

in the winter, when generators in the Southwest generally have surplus power 

and temperatures drop in 

the Northwest, power is 

shipped north to meet 

increasing demand, particularly for heating.

In the last year, as the West Coast copes with historic 

electricity shortages and high prices, the ability to transmit power between the two regions helped keep the 

lights on -- even though it wasn’t enough to avoid periodic blackouts in California. At times, the Northwest/

Southwest relationship has been tense, as neither region 

has much surplus to swap or sell and power purchase 

costs pushed some California utilities close to bankruptcy.

The transmission lines that make this power-sharing 

possible collectively are called the Pacific Intertie. The 

Intertie comprises three alternating current (AC) lines 

and one direct current (DC) line. Together, these lines 

comprise the largest single 

electricity transmission program in the United States.

The northern end of the 

DC line is at the Bonneville Power Administration’s 

Celilo Converter Station, 

which is just south of The 

Dalles Dam about 90 miles 

east of Portland. The 

southern end is 846 miles 

away at the Sylmar Converter Station on the 

northern outskirts of Los 

Angeles. That station is 

operated by utilities including the Los Angeles 

Department of Water and 

Power (LADWP) and 

Southern California 

Edison. The AC lines 

follow generally the same 

path but terminate in 

Northern California.

Only a few parties 

actually own the Intertie, 

but numerous entities have 

contracts to share its transmission capacity. The 

Oregon/California border 

is a dividing line for Intertie ownership and capacity 

sharing. In Oregon, the 

DC line is owned by Bonneville and Portland General Electric Company, and 

Bonneville controls most of the transmission capacity. 

PacifiCorp has a contract with Bonneville for a portion of 

the south-to-north capacity. In Nevada and California, the 

DC line is owned equally by Southern California Edison 

and the Los Angeles Department of Water and Power. 

Entities with transmission contracts include Pacific Gas & 

Electric, San Diego Gas and Electric and the California 

cities of Vernon, Pasadena, Burbank, Anaheim, Azusa, 

Banning, Colton, Riverside and Glendale.

Pacic Northwest —

Pacic Southwest

Intertie

Pacic Intertie:

The California Connection on the Electron Superhighway
4 The Pacic Intertie: Electron Superhighway

The AC lines in Oregon are owned primarily by Bonneville. Other utilities with capacity rights and/or ownership include Portland General Electric, PacifiCorp, Puget 

Sound Energy, Seattle City Light, the Pacific Northwest 

Generating Cooperative, Snohomish Public Utility District and Tacoma Public Utilities. In California, the AC 

lines are owned and/or shared by Pacific Gas and Electric, 

Southern California Edison, San Diego Gas and Electric, 

the Western Area Power Authority, the California Department of Water Resources, the Sacramento Municipal Utility District, Los Angeles Department of Water and Power 

and a consortium of other utilities known collectively as 

the California-Oregon Transmission Project. 

Depending on seasonal conditions, the Intertie is capable of transmitting up to 7,900 megawatts -- 4,800 AC 

(1,600 of this is in the California/Oregon Transmission 

Project, also known as the Third AC Line) and 3,100 DC. 

Over the past five years the limit has ranged between 

about 6,300 and 7,900 megawatts. At maximum, that’s 

enough electricity for seven cities the size of Seattle. 

Most of the power transmitted on the Intertie is surplus to 

regional needs, but some firm power also is transmitted. 

For example, Bonneville sells about 1,900 megawatts of 

firm energy to customers in California via the Intertie.

Recently, Bonneville announced it will spend $35 million to modernize the DC line. In combination with modernization efforts at Sylmar undertaken by the California 

partners, the DC line will maintain its 3,100-megawatt 

capacity far into the future. The equipment replacements 

are expected to be complete in November 2003.

In addition to seasonal power exchanges and help 

during power emergencies, the Intertie has other important 

benefits to West Coast electricity consumers. Because 

large amounts of Northwest power can be sold and transmitted reliably to the Southwest, less power has been generated at fossil-fuel power plants -- an important benefit in 

a part of the country with chronic air pollution problems. 

fewer fossil-fuel power plants need to built -- an important 

benefit in a part of the country with chronic air pollution 

problems. In the last 15 years, for example, electricity 

shipped south on the Intertie has saved Southwest utilities 

more than 2.8 trillion cubic feet of natural gas that would 

have been burned in power plants. As well, the money that 

California and southwestern utilities pay for Bonneville’s 

power helps finance fish and wildlife restoration projects 

in the Columbia River Basin.

Because of the Intertie, the Northwest and Southwest 

enjoy a unique power-sharing relationship that has benefited both regions of the country since power first was 

transmitted on the lines in 1968.

The Intertie and the current West Coast 

Power Crisis

In the last year and a half, as the West Coast electricity 

shortage worsened and spot market prices for power 

abruptly shot to extremes never seen before, the Intertie 

played a critical role. Utilities in the Northwest were 

fighting their own battles of supply, demand and high 

prices, but when they had surplus power to sell, it was 

transmitted to power-starved California on the Intertie. 

Conversely, when California utilities had power to spare, 

particularly overnight when demand is lowest, it was 

shipped north on the Intertie.

As the crisis worsened in California, many Northwest 

utilities publicly worried about whether they would be 

paid for power they shipped south, even after the Clinton 

Administration and then the new Bush Administration 

ordered utilities outside California to sell their surplus 

power to utilities in the state. However, the Intertie provided the opportunity for a unique power-sharing arrangement between Bonneville and the major investor-owned 

utilities in California. No cash was exchanged. Bonneville sent power south during high-demand periods of 

daylight hours, and California sent power north overnight 

-- two megawatts for every one that Bonneville sent south. 

This allowed Bonneville to reduce hydropower generation 

at federal dams on the Columbia River and its tributaries 

so that reservoirs could refill. Both regions benefited 

and, as a result, the reservoir behind Grand Coulee Dam, 

Lake Roosevelt, remained one foot higher than it would 

have if the power-sharing arrangement had not been in 

place, Bonneville reported. That is a critically important 

accomplishment in a year shaping up as the second-driest 

of the last 60 and as snowpack runoff -- the “fuel” for 

about 75 percent of the electricity in the Northwest -- is 

expected to be only about 55 percent of normal.

The Intertie is not immune to impacts from the power 

crisis, as the power crisis might cause its ownership to 

change in California. In March, the state of California 

reached an agreement with Southern California Edison 

to buy the debt-ridden utility’s transmission system -- 

including its ownership of a portion of the Intertie -- for 

$2.76 billion and is negotiating with the state’s two other 

investor-owned utilities, Pacific Gas and Electric and San 

Diego Gas and Electric, to take over their transmission, 

as well. The utilities are nearly bankrupt as the result 

of their accumulated debt from buying high-priced power 

on the wholesale market through short-term contracts, as 

required by power-purchase policies in the state’s electricity deregulation law. If the transmission sales take place 

according to Governor Gray Davis’ plan, the state would 

own most of the high-voltage transmission in the state, 
The Pacic Intertie: Electron Superhighway 5

including a portion of the Intertie. It is not clear what that 

might mean for future transmission prices.

Impacts of national electricity industry 

deregulation

The National Energy Policy Act of 1992, and the 

subsequent Orders 888 and 889 of the Federal Energy 

Regulatory Commission, began the steady deregulation of 

the nation’s electricity industry. While wholesale price 

competition was encouraged by FERC in response to the 

Energy Policy Act, power plant developers were reluctant 

to commit large amounts of capital to new generating 

projects in the face of relatively low wholesale prices 

up until last year, and faced difficulties siting projects, 

particularly in California. Both are factors in the current 

high prices of wholesale power on the West Coast as 

demand steadily eclipsed supply.

Deregulation also had impacts on transmission of electricity, and therefore on the Intertie. In response to the 

Energy Policy Act, transmission owners began working 

to control their costs in preparation for competition and 

open access to high-voltage transmission, required by 

the FERC orders. Open access led to increased use of 

the Intertie, as power marketers made transactions and 

then sought transmission capacity to move the power. 

Bonneville responded by splitting its transmission off as 

a separate business unit. In the competitive wholesale 

market, other power marketers sometimes beat Bonneville to the use of its own lines for surplus power sales to 

and from the Southwest. Increased use of the Intertie also 

has required increasingly sophisticated computer controls 

and broader management oversight, especially following 

the August 1996 West Coast power outage.

Consequently, Bonneville now is investigating the 

costs and requirements for upgrading its transmission 

system, including its share of the Intertie. The largest 

West Coast problem is in California, however, where 

a transmission constraint near the city of Gilroy is a 

severe limit on the ability to move large blocks of power 

from the Southwest into Northern California and the 

Northwest.

In the Northwest, little transmission has been added 

to the grid since 1987, and little more is planned at the 

moment, yet Bonneville expects winter loads to grow by 

12 percent through 2008 while new transmission is only 

expected to grow by 2 percent. Bonneville estimates it 

will need to invest an additional $775 million -- beyond 

investments already planned -- between 2002 and 2006 

to remove transmission constraints, meet new demand for 

transmission and integrate the generation from new power 

plants under construction in the Northwest. These investments don’t include needed upgrades in California.

Improved coordination of transmission was a central purpose of a December 1999 order (Order 2000) by the 

Federal Energy Regulatory Commission (FERC), which 

required utilities throughout the nation to examine the 

formation of regional transmission organizations (RTOs) 

in order to improve the efficiency of high-voltage transmission systems and lower electricity rates, which reflect 

transmission prices. Transmission systems, while interconnected, charge separate rates for each segment of 

ownership. This “pancaking” of rates, as it is called, 

can add to the cost of transmission from one part of 

the country to another. RTOs, in theory at least, could 

reduce or eliminate pancaking through uniform rates and, 

as a result, lower the cost and improve the efficiency of 

transmission.

In October 2000, eight western utilities and Bonneville filed a proposal with FERC to create a regional transmission organization, which would be called RTO West. 

While it would not control all high-voltage transmission 

in the West, RTO West would serve eight western states 

and control nearly 52,000 miles of transmission, including the Oregon portions of the Intertie. California investor-owned utilities’ transmission systems are controlled 

by the California Independent System Operator (ISO). 

Southwestern utilities have created a third western RTO 

called Desert STAR. There has been some encouragement 

from FERC for a single westwide RTO. 

The initial filing for RTO West includes a role for 

the consortium to plan and add transmission, but the 

organization is not planned to begin operating until 2004. 

Because new transmission lines require at least five years 

to be designed, approved and built, Bonneville hopes to 

move more quickly in addressing transmission needs in 

the Northwest. 

History of the Pacic Intertie

While the Intertie is proving its value during the 

current crisis, power shortages have occurred before on 

the West Coast. In fact, concerns for power shortages 

were part of the rationale for constructing the Intertie in 

the first place.

Consider this familiar-sounding scenario:

Pacific Gas and Electric Company, a major California utility, finds itself facing blackouts because it 

seriously underestimated demand for power and didn’t 

build enough generating capacity. Facing a looming 

power shortage -- perhaps the largest to hit a single 
6 The Pacic Intertie: Electron Superhighway

area in U.S. history -- the governor orders electricity 

use cut by 20 percent in PG&E’s service territory. 

Meanwhile in the Pacific Northwest, utilities are bracing for a severe shortage of peaking power -- the 

electricity that utilities rely on during emergencies of 

cold or hot weather, when demand peaks.

That could be a description of current events, but actually the year was 1948, and the events were described in a 

report by the power manager for the Sacramento regional 

office of the Bureau of Reclamation. In that year, central 

California experienced a drought. Power production was 

severely curtailed as a result, and the power manager 

made the point that an intertie to the Northwest could 

have prevented the energy shortage in California and also 

helped the Northwest avoid its peaking power shortage.

1948 also was the year a California congressman proposed diverting a portion of the Columbia River to California for water supply and power production. Other 

politicians, including many in the Northwest, saw the 

proposal as a thinly veiled water-grab.

The Northwest Public Power Association also opposed 

the idea, and recommended instead that high-voltage 

power lines be built that could carry surplus power from 

the Northwest to California. Even in 1948, however, the 

idea of linking the Northwest and Southwest with highvoltage power lines was not new. It dates to a proposal 

by University of Washington engineering professor Carl 

Magnusson in 1919. In the 1930s, President Franklin 

Roosevelt included the idea of linking the major population centers of the Northwest, Great Basin and Southwest 

with high-voltage power lines in his rationale for creating 

the Bonneville Power Administration.

The California drought of 1948, however, spurred new 

interest in building the Pacific Intertie. During the next 

five years, the idea gained momentum and the Intertie 

was seen as a means of helping alleviate power shortages 

in both regions, providing power for emergencies, reducing California’s dependence on oil-burning power plants 

and helping serve the power demand of national defenserelated industries during the Korean War.

Meanwhile in Congress, the Intertie proposal bogged 

down in requirements for feasibility studies, opposition to 

federal involvement in the project (it was being pushed 

primarily by the Bureau of Reclamation, Federal Power 

Commission and the Defense Electric Power Administration), and by others who questioned whether it really was 

necessary. These critics included Northwest Governors, 

who feared the Intertie might carry power away that otherwise could be sold in their states.

During the administration of President Dwight Eisenhower, the role of federal agencies in public works 

projects was reduced in favor of private industries and 

non-federal government agencies. There even was a 

shadow of anti-Communist, McCarthy-era fervor over the 

Intertie proposal. In 1951, the Idaho Public Utilities 

Commission denounced the proposal as “a major element 

in the plan of those people who are attempting to build a 

socialist power empire and who have contemplated for 15 

or 20 years such an empire embracing the entire western 

part of the United States.”

The proposal languished through the early and mid1950s, but sprang back to life late in that decade in 

response to the rising cost of fuel oil for power plants in 

California (from $1 to $2.50 per barrel), a decline in the 

aluminum market and Bonneville’s first budget deficits, 

which were caused by reduced sales of surplus power 

as the result of competition from newly constructed, nonfederal power plants in the Northwest. In 1958, Pacific 

Gas & Electric Company proposed constructing a highvoltage transmission line between California and Oregon 

in conjunction with the California-Oregon Power Company (this company later merged with Pacific Power and 

Light Company of Portland). Specifically, the two utilities proposed to extend a line into California that already 

ran through central Oregon to Klamath Falls. Bonneville 

was interested because of the potential to sell surplus 

power to the Southwest.

Congressional committees continued to hold hearings, 

and more studies were conducted into the early 1960s. 

In addition to political concerns, there were engineering 

concerns about the practicality of long-distance transmission of electricity.

Several related efforts came together in 1964 that led 

to construction of the Intertie. These were 1) ratification 

of the Columbia River Treaty between the United States 

and Canada, 2) completion of the Pacific Northwest Coordination Agreement, which specified how the dams would 

be operated under the treaty; 3) congressional approval 

of the Pacific Northwest Consumer Power Preference Act, 

and 4) congressional approval of budget appropriations to 

build the federal portion of the Intertie lines in Oregon.

The Columbia River Treaty resulted in the construction of three dams in British Columbia, Mica, Keenleyside and Duncan, and these were completed by the 

late 1960s. Eventually, a fourth Treaty dam, Libby, was 

completed on the Kootenai River in Montana. The effect 

of the Treaty dams is to maximize power generation 

downstream in the Columbia River system. The Treaty 
The Pacic Intertie: Electron Superhighway 7

authorized British Columbia to share equally in the additional power generation.

While Canadian Prime Minister John Diefenbaker and 

President Dwight Eisenhower signed the Treaty in January 1961, British Columbia refused to agree to its ratification, as required under Canadian law, before it could go 

into effect. As a result, Canada would not ratify the 

Treaty until 1964.

The province wanted some assurance that half of the 

additional power, which under the treaty belongs to British Columbia, actually would be sold in the United States 

as planned. The province did not want to try to sell the 

power in British Columbia, where it was not needed.

Recalling that time of tension between the province 

and the Canadian federal government -- one of many in 

the province’s history -- Hugh Keenleyside, then chairman of B.C. Hydro, said in a speech to the Vancouver 

Board of Trade in February 1964, “B.C. argued that if the 

treaty were ratified, the province would be committed to 

proceed with the building of the dams but would have no 

assurance of a purchaser for our downstream power. ... 

[The province] took the position that the ratification could 

only be accepted if accompanied at the same time by a 

specific undertaking on the part of the United States to 

purchase the Canadian entitlement at an agreed price and 

for an agreed term.”

Thus, British Columbia wanted to shop its share of 

the additional firm power in the United States, where 

there were willing buyers. In fact, the official name of 

the Intertie was changed to the Pacific Northwest-Pacific 

Southwest Intertie because the City of Phoenix, Arizona, 

asked for some of the power Canada would be selling.

This was acceptable to the two countries, and a 

non-profit corporation, the Columbia Storage Power 

Exchange, was created to buy the Canadian share of 

the additional generation. This was necessary because 

Bonneville officials and others believed Congress would 

not provide money to buy power from British Columbia 

for resale in the United States. Without access to the 

Canadian power, however, California would not support 

construction of the Intertie.

“It was the Canadian entitlement power that made the 

Intertie possible,” Charles Luce told author Gene Tollefson in an interview for his book, “BPA and The Struggle 

for Power at Cost.” Luce was administrator of the Bonneville Power Administration when the treaty was signed. 

“The Northwest wanted to sell only secondary [surplus] 

power [on the Intertie]. California would consent to the 

Intertie only if they could get firm power. We didn’t 

need the Canadian power in the Northwest. There was 

no political opposition to selling Canadian firm power in 

California. So all of a sudden, what seemed to us to 

be a problem and a liability, namely how to market this 

Canadian power, became an asset and an opportunity.”

Meanwhile, the Pacific Northwest governors also 

wanted assurances -- assurances that the Intertie would 

not siphon firm power generated on the Columbia River 

in their states to the power-hungry Southwest. Surplus 

power, of course, was another matter. These concerns 

were addressed in the Pacific Northwest Consumer Power 

Preference Act of 1964, signed by President Johnson 

on August 31. The Preference Act required that Bonneville sell firm energy first to electric utilities in the 

Northwest and that any surplus would be available for 

sale outside the region. The law also required that the 

cost of transmitting power over the privately built portion 

of the Intertie be no higher than if the lines had been built 

by the federal government.

Earlier that August, on the 14th, Congress approved 

the Public Works Appropriations Bill of 1965 -- the 

coming fiscal year -- with $42.2 million for Bonneville 

and $3.3 million for the Bureau of Reclamation to construct the federal portion of the Intertie, which is in 

Oregon. The California portion would be built by California utilities, primarily the Los Angeles Department of 

Water and Power. In all, the construction cost would top 

$700 million.

Finally, on September 15, the Bonneville Power 

Administration, Corps of Engineers and U.S. Northwest 

utilities that own hydropower dams signed an agreement 

officially entitled, “Coordination of Operations Among 

Power Systems of the Pacific Northwest,” known today as 

the Pacific Northwest Coordination Agreement (PNCA). 

The PNCA responds to language in the Treaty that 

commits BC Hydro and Bonneville to coordinate operations of their Columbia Basin power systems to produce 

the optimum amount of firm power, as needed to meet 

demand, and surplus power. The PNCA expires on June 

30, 2003, but has been renegotiated to establish a later 

expiration date.

The initial Intertie consisted of two 500,000-volt AC 

lines and two 800,000-volt DC lines (there are two wires, 

but they operate together and are considered a single line) 

linking Oregon with Los Angeles. In Oregon, Bonneville 

built 267 miles of one AC line and 88 miles of the other, 

and 265 miles of the DC line. The northern end of the AC 

Intertie is at the John Day Substation, 30 miles east of 

the DC terminus at the Celilo Substation. Two AC lines 

run south from John Day to Lugo, east of Los Angeles. 
8 The Pacic Intertie: Electron Superhighway

These lines went into service in 1968 and 1969, at a 

combined total capacity of 2,500 megawatts. A third line 

from The Dalles Dam to Tesla, east of San Francisco, was 

completed in 1993 and brought the total AC capacity to 

4,800 megawatts. The DC line was energized in 1970 at 

1,440 megawatts. It was upgraded to 2,000 megawatts in 

1985, and to 3,100 in 1989.

A month after signing the Northwest Consumer Power 

Preference Act, which cleared the way for construction of 

the Intertie, President Johnson addressed the Intertie Victory Breakfast in Portland on Sept, 17, 1964. He arrived 

in Portland from Blaine, Washington, on the border with 

British Columbia, where he proclaimed the Columbia 

River Treaty a day earlier in a ceremony with Canadian 

Prime Minister Lester Pearson in front of an estimated 

10,000 people. Canada had ratified the Treaty recently 

after working out its differences with British Columbia; 

the United States had ratified the Treaty three years earlier.

At the Blaine ceremony, Johnson presented Pearson 

with a check for $254 million, the calculated value of the 

Canadian entitlement to the additional generation for 30 

years, as required by the Treaty and negotiated by the 

province and the two federal governments. BC Hydro 

used the money to build its three Treaty dams.

Johnson’s remarks at the Intertie Victory Breakfast are 

as relevant today as they were in 1964:

“This system is proof of the power of cooperation 

and unity. You have proved that if we turn away from 

division, if we just ignore dissention and distrust, there 

is no limit to our achievements.”

Table 1: An electron superhighway

1986 3,155 281.9

1987 2,339 208.9

1988 1,379 124.8

1989 1,483 132.5

1990 2,826 252.5

1991 2,672 238.7

1992 889 79.4

1993 106 9.4

1994 306 27.3

1995 1,174 104.8

1996 3,788 338.4

1997 3,947 352.6

1998 2,204 196.9

1999 3,345 298.8

2000 2,019 180.4

Total 31,632 2,827.3

Year

Net Transfer to the

Southewst in 

Average

Megawatts

Energy Equivalent

in Billion Cubic

Feet of

Natural Gas

 Table 1. An electron superhighway

Thousands of megawatts are transmitted on the 

Pacific Intertie every year between the Northwest 

and Southwest. The imports help reduce the 

amount of power generation in each part of the 

country. Every year since 1986, more power 

has been transmitted from the Northwest to the 

Southwest than in the other direction. The following table expresses net annual transmission 

(combined north-to-south and south-to-north) on 

the Intertie, AC and DC combined, in terms of 

cubic feet of natural gas. 
The Pacic Intertie: Electron Superhighway 9