II. Procedural Matters

A. Procedural Background

SCE filed this application for a permit to construct the Viejo System Project on March 21, 2003. After reviewing the application and the Proponent's Environmental Assessment (PEA), Commission staff determined that the project should be reviewed under the California Environmental Quality Act (CEQA). The Commission contracted with a CEQA consultant, which proceeded to develop an Initial Study. On March 10, 2004, Commission staff issued an Initial Study and Draft Mitigated Negative Declaration (MND) for public comment in compliance with the CEQA and Rule 17.1 of the Commission's Rules of Practice and Procedure. The Commission filed the draft MND with the State Clearinghouse on March 10, 2004. The 30-day review and comment period (CEQA Guidelines § 15105) closed on April 9, 2004. SCE, the City of Mission Viejo and a local citizens group called NOPE submitted comments on the draft MND. Commission staff reviewed the parties' comments and modified the draft MND and Initial Study to reflect these comments.

The Commission held a prehearing conference on March 25, 2004 in Mission Viejo at which NOPE presented a petition signed by an estimated 3,000 local residents. The applicant, attorneys representing Mission Viejo, representatives of NOPE and about 200 local residents attended the prehearing conference. All five members of Mission Viejo's city council, including the mayor, spoke in opposition to the project as proposed. About 20 citizens spoke, most in opposition to the project unless the lines could be undergrounded. Two former members of the city council of Mission Viejo spoke in support of the project. The South Orange County Regional Chambers of Commerce and the City of Lake Forest sent letters in support of the project.

On March 26, 2004, the assigned ALJ joined a tour of the project rights of way, which was attended by representatives of SCE, NOPE and Mission Viejo. Several local residents also joined the tour.

Following the prehearing conference, the Scoping Memo and Ruling issued in this proceeding denied NOPE and Mission Viejo's request for a public participation hearings at which local residents and businesses could present their views on the proposed project. The ruling found that such a hearing was not necessary because the prehearing conference provided an opportunity for more than 200 residents to speak.

Subsequently, NOPE made an informal motion seeking a public participation hearing, arguing that because the prehearing conference was not noticed as a forum for public comment, many members of the local community may have chosen not to attend. In response to this request, the Commission held a public participation hearing on May 25 at 2pm and 6pm in the City of Mission Viejo's City Hall. About 250 local residents attended the hearing and 71 spoke, most either opposing the project or proposing transmission line undergrounding through Mission Viejo. All five members of the city council spoke, proposing the lines be placed underground. Two former members of the city council spoke in support of the project.

Public comments in opposition to the project emphasized the following:

Following review of comments on the draft MND, Commission staff modified the draft MND to respond to those comments and, in some cases, modified the MND to include additional or different mitigation measures. The Commission staff confirmed that SCE followed Commission rules in its notification to residents. It published the final MND on June 2, 2004.

B. Standard of Review

In its prehearing statement, Mission Viejo argues that SCE should not have filed for a "permit to construct" (PTC) for the Viejo System Project and that the application should instead have sought a certificate of public convenience and necessity (CPCN), which requires a more elaborate review process. Mission Viejo reasons that General Order (GO) 131-D requires a CPCN for this type of project because the project does not anticipate "replacing existing structures with similar structures." Mission Viejo also stated concerns that SCE plans to add a fourth 66 kV line at an unspecified later date, pushing the project over the 200 kV threshold for a more formal review of project need. At the prehearing conference, SCE stated it has no plans to add a fourth line but that adding the fourth 66 kV line at a later date would not require any Commission review or approval.

GO 131-D requires utilities to seek a PTC if the project is designed to operate between 50 kV and 200 kV. A PTC does not require the application to include analysis of need, costs or benefits. A PTC generally anticipates an environmental review and a process for public input. GO 131-D requires utilities to seek a CPCN before construction of transmission line facilities that are designed for "immediate or eventual operation at 200 kV or more." A CPCN application requires a showing of project need and an analysis of costs and benefits.

When considering whether a project would operate at 200 kV or more for purposes of determining whether to require a PTC or CPCN, the Commission does not cumulatively add the voltage of separate circuits proposed to be installed. That is, the project is considered to operate at a level of 66 kV notwithstanding the number of installed circuits as long as all circuits are 66 kV. Because all circuits SCE proposes to install are 66 kV, the project was appropriately filed as a PTC.

GO 131-D Section III(A) excuses projects larger than 200 kV from CPCN review if those projects anticipate "the replacement of existing power line facilities or supporting structures with equivalent facilities or structures, the minor relocation of existing power line facilities, the conversion of existing overhead lines to underground, or the placing of new or additional conductors, insulators, or their accessories on or replacement of supporting structures already built..." While SCE would replace certain structures as part of the proposed project, albeit this exception is not relevant in this case because the proposed project is below 200 kV.

For these reasons, the Scoping Memo and Ruling issued in this proceeding on April 8, 2004 found that SCE's application appropriately seeks a PTC. We affirm that ruling.

C. Level of CEQA Review

Mission Viejo and NOPE contend that the Commission should have conducted an environmental impact report (EIR) rather than an MND in this case in order to provide a complete assessment of the project and assess alternatives. NOPE and Mission Viejo allege that the MND does not consider significant environmental impacts and improperly fails to consider reasonable alternatives to the facilities envisioned in the application.

In determining whether to prepare an EIR or an MND for the Viejo Project, Commission staff and its environmental consultants prepared an Initial Study consistent with the CEQA Public Resources Code § 21000 et seq., Title 14 of the California Code of Regulations, hereafter CEQA Guidelines, § 15002), specifically CEQA Guideline § 15063. Under CEQA, an agency shall prepare an MND when the Initial Study shows that there is no substantial evidence that the project may have a significant effect on the environment, or the Initial Study identifies potentially significant effects but the project as agreed to by the applicant prior to public review has been revised to avoid significant effects or the effects have been mitigated to a less than significant level. (CEQA Guideline § 15070) An EIR is required when the project as proposed or revised may have a significant effect.

For the Viejo Project, the Initial Study reviewed potential environmental effects pursuant to the CEQA Checklist significance criteria contained in Appendix G of the CEQA Guidelines. The detailed environmental analysis of potential impacts and recommended mitigations is contained in Section B.3 of the DMND and Supporting Initial Study. That analysis reflects that with mitigation, any potentially significant effects could either be avoided or reduced to less than significant levels. Additionally, SCE agrees to implement all recommended mitigation measures as a condition of project approval.

In determining whether to conduct an EIR or an MND, Commission staff must apply its judgment in light of the project, its potential impacts and the likelihood of reasonable mitigations. In this case, some parties suggest that the Commission should have conducted an EIR and reviewed alternatives. We affirm the staff's decision to conduct an MND instead in this case because we are convinced that the MND meets the legal requirements of CEQA. However, in recognition that the visual impacts of the project might be considered to be substantial from the standpoint of local residents and businesses, Commission staff reviewed alternative proposals, which are addressed subsequently. We find that some of those alternatives may be feasible. We do not adopt them at this time because Commission staff has not conducted a complete review of their environmental impacts, as CEQA requires. As we are not convinced that the benefits of any of these alternatives will be offset by the potential costs as described below, we decline to reopen the CEQA process to review them in more depth. We therefore certify the final MND as presented to us by the Commission staff.

D. Need for Hearings

The prehearing statements of the City of Mission Viejo and NOPE proposed that the Commission conduct evidentiary hearings in this case. Although NOPE and Mission Viejo presented many objections to the project, these prehearing statements did not identify specific material factual disputes that would be the subject of evidentiary hearings. Their concerns were either of a general nature or appropriately considered in comments to the draft MND.

Subsequently, NOPE and Mission Viejo submitted comments on the draft MND that proposed specific mitigation measures, which are discussed in more detail in subsequent sections of this order. The Commission modified the draft MND to incorporate some of the mitigation measures advocated by NOPE and Mission Viejo.

After the Commission staff issued the FMND, on June 10, 2004, NOPE filed a motion seeking hearings in this proceeding. NOPE argues that there are outstanding factual disputes relating to the need for the project and the prospects for undergrounding. On the issue of need, NOPE suggests the only documentation SCE has provided to support the project is a load forecast that is outdated and appears to assume exponential growth in Mission Viejo, where growth has tapered off in recent years. NOPE's motion also argues that the FMND does not adequately address undergrounding options from an economic or technical standpoint. It proposes to address these issues in hearings.

SCE responded to NOPE's motion on June 14, 2004 objecting to NOPE's request for hearings.

This order addresses the issues of need and project alternatives NOPE proposes to address in evidentiary hearings. In general, we are convinced by applicant's showing of project need, and find that the potential benefits of further review in this proceeding and possible changes to the project are unlikely to outweigh the costs of delay and project modifications. Accordingly, we do not conduct hearings in this application and issue this order ex parte.

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