Community Engagement

SMUD sees cost savings tied to line project cancellation

Sacramento Municipal Utility District (SMUD) announced on March 1 that it is canceling the proposed Colusa-Sutter Transmission Line Project effective immediately.

The public power utility’s decision to exit the project at this time comes early enough that SMUD will save approximately $4 million in this planning phase, it said. In addition, cancellation of the project will also reduce pressure on SMUD rates during the early phase of the implementation of the utility’s long-term integrated resource plan (IRP), the utility said.

During the initial phase of the transmission project, which was to evaluate potentially significant environmental impacts and conduct permitting and preliminary engineering to decide whether to proceed with final design and construction, it was determined that the project would be too costly.

The initial estimated $245 million cost of the proposed Colusa-Sutter Transmission Line Project has increased by more than $100 million and could have ended up being significantly higher, the public power utility noted.

Additional cost increases were also expected to address flood risk at the O’Banion Substation study area, an issue uncovered during the environmental review process.

The proposed line would have terminated in the vicinity of Western Area Power Administration’s existing O’Banion Substation located near Yuba City, California in southern Sutter County, just north of SMUD’s service territory in Sacramento County. This area was defined as the O’Banion Substation study area in the environmental review process.

SMUD and WAPA have been working on the Colusa-Sutter Transmission Line Project since the SMUD Board of Directors approved a project development agreement in December 2014.

The proposed 500-kilovolt transmission line would have connected the California–Oregon Transmission Project to SMUD’s or WAPA’s transmission facilities on the west side of the Sacramento Valley.


Since SMUD started planning the project, the development of SMUD’s long-term IRP has greatly reduced the value and need of the proposed line, the utility said.

The IRP analysis indicates SMUD would better focus its resources on the suite of local, regional and in-state renewable and reliability projects, as well as incremental transmission infrastructure. 

Canceling the Colusa-Sutter Transmission Line Project also reduces pressure on SMUD rates during the early critical phase of IRP implementation, the utility pointed out.

In addition, SMUD said that joining the California Independent System Operator Energy Imbalance Market will provide lower cost access to a broader regional market. SMUD will start participating in the EIM in April.

Since the SMUD Board made the initial approval, SMUD and WAPA staffs focused on developing a robust environmental review process, with numerous public meetings throughout four counties and studies to help ensure an appropriate mitigation strategy to minimize or avoid impacts on various resources, the public power utility said.