II. Overview and Procedural Background

SDGE filed this application on July 12, 2002, seeking a CPCN to construct additional transmission and distribution capacity to meet electricity demand in its territory. The project would run through the cities of San Diego and Santee and in unincorporated areas of San Diego County. The project would include (1) the installation of a new 230 kV circuit on modified steel lattice structures within the existing 35-mile SDG&E ROW located between the Miguel and Mission substations; (2) relocation of the existing 138 kV and 69 kV circuit onto a new alignment of poles within the existing ROW; and (3) modification of the Miguel Substation and the Mission Substation to accommodate the new 230 kV circuit. These facilities, for which a CPCN is required, are part of a number of activities whose purpose is to enable the transmission of power from new generation resources and the importation of 560 megawatts (MW) to areas north of the Miguel substation. The larger project, for which the economic benefit and costs are given hereinafter, includes apart from the facilities listed above, a second 500/230 kV transformer bank and 500 kV series capacitors at Imperial Valley Substation, a 500/230 kV transformer bank and gas insulated 500 kV switchgear at Miguel Substation and the reconductoring of a 138 kV transmission line connected to Miguel Substation.1 SDG&E states the facilities are needed to improve regional and statewide reliability and operational flexibility. This project is referred to as the Miguel Mission Project.

The California Environmental Quality Act (CEQA)2 requires the Commission to consider the environmental consequences of its discretionary decisions. Accordingly, the Commission has employed environmental consultants to prepare an EIR evaluating the proposed project and project alternatives. The purpose of the report is to identify potentially significant environmental effects associated with the proposed project, and propose mitigation measures and project alternatives that would minimize environmental consequences.

The Commission held a pre-hearing conference in this proceeding on February 4, 2004, at which parties discussed the scope of issues and whether hearings would be required. Subsequently, the Assigned Commissioner and administrative law judge (ALJ) issued a scoping memo and ruling summarizing the issues and requiring certain cost information from SDG&E and the California Independent System Operator (CAISO). Commission staff issued a draft EIR (DEIR) on April 1, 2004, and received 30 sets of comments on May 17, 2004.3 Commission staff incorporated those comments into the FEIR and considered them in preparing final recommendations.

After SDG&E filed this application, the Commission considered the project as part of a review of regional transmission constraints in Investigation (I.) 00-11-001, the Commission's transmission planning proceeding. In that docket, we issued D.03-02-069, which found a need for the Miguel Mission Project, set a cost cap for the project and addressed project construction "milestones." The primary task in this proceeding is to resolve matters concerning environmental quality in compliance with CEQA. This order also addresses the cost cap and milestones adopted in D.03-02-069.

1 The project activities covered by SDG&E's CPCN application require CEQA review pursuant to General Order (GO) 131-D and are studied in the EIR. The substation and reconductoring activities do not require CEQA review under GO 131-D. 2 The CEQA statute appears at Cal. Pub. Res. Code § 21000 et seq. 3 The comments were filed by SDG&E, Border Generation, California Department of Transportation, Padre Dam Municipal Water District, Institute de Informatica, Dalour Younan, San Diego County Water Authority, John Moods Helix Water District, Federal Aviation Administration, City of Santee, San Diego Board of Supervisors, U.S. Fish & Wildlife Service, California Department of Fish & Game, Barona Band of Mission Indians, San Diego Regional Chamber of Commerce, Barratt American, Inc., Bob Meijer, Michael Bortoli, Lonna & Mike Perry, Mary England, John Bruhn, Santee Citizens for Safe Power, Arten and Elaine Watt, J. Michael Cowell, Linda Kirk, Ruth Jones, Katherine Marsh, Kevin Marsh, and Bob and Gail Crawford.

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