Jul. 8--With a symbolic flip of a switch, Gov. Arnold Schwarzenegger yesterday dedicated a new electricity transmission line that he said should relieve congestion and save money for consumers.

The governor joined San Diego Gas & Electric to celebrate a new transmission line that the utility said would save ratepayers $50 million over the course of the first year and help ward off summer brownouts.

The $45 million line, which runs from a substation south of the Sweetwater Reservoir near Chula Vista into Mission Valley, has been in operation for a month, already saving the utility $7 million.

"That's what I call a great investment," Schwarzenegger said.

SDG&E has grappled with congestion on the Southwest Power Link, a major power transmission line from Arizona into San Diego. That link ends at the substation near the reservoir.

But because the line narrowed at that point, San Diegans often could not take advantage of lower-cost imported power, said Ed Guiles, SDG&E's chairman and chief executive.

Instead, the county's power grid had to rely on more costly electricity provided by the Encina Power Plant in Carlsbad and the South Bay Power Plant in Chula Vista. Both are outdated plants, generating electricity that costs as much as 30 percent more than power imported along the Southwest link, Guiles said.

The new link will provide an additional 400 megawatts per day for the San Diego area, or nearly 10 percent of the region's needs, he said.

"It's like adding a couple of lanes to I-15 or I-8," Guiles said. "We now have greater flexibility in deciding the most cost- effective way to meet our customers' needs."

The new transmission line will certainly save money, said Michael Shames, executive director of San Diego's Utility Consumers' Action Network.

"However, it is a sad state of affairs that SDG&E's customers had to pay millions for a line to protect them from the gouging by SDG&E's parent company," Shames said.

Last year, the state's Independent System Operator's Market Surveillance Committee said in a report that power suppliers were creating congestion on the Southwest Power Link and then resolving that congestion, profiting along the way.

Power suppliers, including SDG&E parent Sempra Energy, denied any profiteering from the congestion.

Under an unusual contract arrangement with the operator of California's power grid, suppliers were able to take advantage of congestion by offering to deliver power over transmission lines at peak hours. When the line could not handle that power, providers were allowed to bid for the right not to deliver the power. That money was used by the ISO to buy power from other sources, often at higher costs.

But the power suppliers -- who were not delivering power -- saved by bidding below-market prices to get out their delivery contracts.

The ISO committee estimated that the congested power links cost Southern California consumers more than $20 million.

Although the new San Diego transmission line was expected to take two years to complete, SDG&E convinced the state Public Utilities commission that it could accelerate the construction timetable by using new technologies to provide a temporary transmission line a year earlier than expected.

PUC Chairman Michael Peevey said the quick-fix project was approved because it didn't sacrifice safety or environmental standards and would help meet anticipated summer power needs in the San Diego region.

SDG&E said it will continue to work on the line and plans to complete permanent construction next year.

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