Dian M. Grueneich is the assigned Commissioner and Julie Halligan is the assigned Administrative Law Judge in this proceeding.
Findings of Fact
1. The Antelope-Pardee Transmission Project is necessary to promote the safety, health, comfort, and convenience of the public.
2. Transmission to the wind rich Tehachapi area is almost unique in its ability to qualify under the standard set forth in this Decision for a determination of need under § 399.25 because of the size of the wind resource in the area, the constraints on the existing transmission system, and the level of interest on behalf of both utilities and merchant providers aspiring to develop projects there.
3. The Tehachapi area offers the largest wind resource in California. It has the undeveloped potential of generating about 1400 gigawatt-hours per year, with about 4500 MWs of installed capacity. To capture this potential, the lines must go where the wind blows - there is no other choice.
4. Without system improvements, SCE and others could not deliver significant amounts of wind power from the region.
5. No other entity has proposed a line to reach the Tehachapi wind resources.
6. Industry commitment to develop the Tehachapi area for RPS purposes is significant; utilities have received winning bids from, and SCE has signed contracts with developers of wind projects, the output of which cannot be fully delivered without increased transmission capacity.
7. In total, the wind projects in the current ISO queue for Tehachapi exceed 4,000 MWs in capacity.
8. The Antelope-Pardee Transmission Project is the first in a series of high-voltage, bulk transfer, transmission upgrades designed to serve multiple RPS-eligible wind projects in the Tehachapi region, as contemplated under D.06-06-034.
9. The Antelope-Pardee Transmission Project would accommodate output from an anticipated 201 MW wind facility west of the Antelope substation. It would increase the take-away capacity for power from Tehachapi through the Antelope substation and toward the load center in Southern California.
10. Because the existing path from the Antelope substation to the Victor substation is fully subscribed, it is necessary to increase the capacity to the load center in order to receive the full benefits of the anticipated wind power development.
11. The initial cost of the Antelope-Pardee Transmission Project, capped at $92.5 million, is a small fraction of the total cost of the entire project needed to bring Tehachapi wind to retail customers.
12. The cost of the Antelope-Pardee Transmission Project is justified based upon the high degree of the certainty we have that the project is critically needed to ensure development of RPS resources in the Tehachapi area.
13. The Antelope-Pardee Transmission Project is needed to facilitate compliance with the RPS program.
14. The project satisfies the requirements of § 399.25, and therefore satisfies the need requirement implicit in § 1001.
15. The project alternatives considered in the Final EIR/EIS constitute a reasonable range of feasible alternatives, as required by the CEQA Guidelines.
16. The environmentally superior alternative for the Antelope-Pardee Transmission Project consists of a combination of alternative route segments identified as Alternatives 2 and 4 in the Final EIR/EIS.
17. The environmentally superior route poses less harm to the environment than do the other routes proposed by SCE and/or considered in the Final EIR/EIS.
18. The Commission has reviewed and considered the information in the Final EIR/EIS before approving the project.
19. In determining whether to grant a CPCN for the proposed project, we have given express consideration to community values, recreational and park areas, historic and aesthetic values, and influence on the environment, all of which factors are addressed in detail in the Final EIR/EIS.
20. The Final EIR/EIS identifies significant environmental effects of the route we approve that can be mitigated or avoided to the extent that they become not significant. The Final EIR/EIS describes measures that will reduce or avoid such effects.
21. Specific findings with respect to all significant or potentially significant environmental effect of the project as proposed and of the various alternative routes studied in the Final EIR/EIS are set forth in Attachment B to this Decision, CEQA Findings of Fact. We adopt the CEQA Findings of Fact included in Attachment B as if fully set forth herein.
22. The environmental mitigation measures identified in the Final EIR/EIS, and set forth in detail in Attachment A to this Decision, are feasible and will avoid significant environmental impacts.
23. In response to comments on the proposed decision, the Commission has made several minor modifications to certain of the environmental mitigation measures set forth in Attachment A to this Decision, and has deleted several other mitigation measures that are no longer necessary in view of the Commission's determination in this Decision to approve the environmentally superior route.
24. These minor modifications to, and deletions of, certain environmental mitigation measures provide an equivalent or greater degree of environmental mitigation than would have occurred had these modifications and deletions not been made; moreover, these minor modifications to, and deletions of, certain environmental mitigation measures will themselves not cause any significant environmental impacts.
25. The Mitigation Monitoring, Compliance, and Reporting Plan set forth in Appendix 9 to the Final EIR/EIS conforms to the recommendations of the Final EIR/EIS for measures required to mitigate or avoid those environmental effects of the project that can be reduced or avoided.
26. Additional information relevant to an alternative route proposed by the City of Santa Clarita is contained in Attachment D. We adopt Attachment D as an Addendum to the Final EIR/EIS.
27. None of the information contained in Attachment D results in any change to any of the impact conclusions or to any other of the findings, conclusions and recommendations presented in the Final EIR/EIS.
28. Notwithstanding the adoption in this Decision of all feasible mitigation measures identified in the Final EIR/EIS, and set forth in detail in Attachment A, there are certain adverse environmental impacts of the project being approved in this Decision that cannot mitigated to a less than significant level. The project's unavoidable adverse environmental impacts are acceptable in light of these substantial benefits, which constitute an overriding consideration warranting approval of the project, despite each and every unavoidable impact.
29. As State lead agency under CEQA, the Commission is required to monitor the implementation of mitigation measures adopted for this project to ensure full compliance with the provisions of the monitoring program.
30. The Commission will develop a detailed implementation plan for the Mitigation Monitoring, Compliance, and Reporting Plan.
31. It is reasonable to modify SCE's preliminary EMF management plan for the project, as described in Section VI.
32. The maximum reasonable and prudent cost for the approved project is $92.5 million.
Conclusions of Law
1. The Commission has jurisdiction over the proposed project pursuant to, inter alia, Pub. Util. Code §§ 399.25 and 1001 et seq.
2. In order to award a certificate under §1001, the Commission must find that the present or future public necessity require or will require construction of the line.
3. Section 399.25 directs the Commission to deem necessary those transmission facilities identified in applications if the proposed facilities are necessary to facilitate achievement of the State's renewable power goals.
4. Section 399.25 recognizes that in order to achieve RPS goals, it may be necessary for the Commission to approve new transmission projects in anticipation of future renewable energy projects, and to provide unusual assurances of recovery of reasonable construction costs.
5. Because § 399.25 exists in a broader statutory context - one that requires ambitious renewable portfolio development, reasonable rates, and environmental protection -- we must interpret this code section in a manner that strikes a reasonable balance.
6. We faced a similar challenge in establishing the circumstances under which a project would be eligible for cost recovery through retail rates under § 399.25(b)(4). In D.06-06-034 we identified two types of transmission projects that could be needed to facilitate RPS compliance and were therefore eligible for cost recovery. Those projects included "high-voltage, bulk-transfer, multi-user transmission facilities ... proposed to access known, concentrated renewable resource areas..." (D.06-06-034, mimeo. at p. 27.)
7. Decision 06-06-034 also noted that the degree of certainty required for a showing of RPS need "will depend on the magnitude of costs at stake," and that "in certain cases it will be necessary to consider the status of the RPS compliance to date..." (Id. at p. 28).
8. Section 399.25 does not offer the only means of establishing project need.
9. Historically, under § 1001, need for a transmission project could be established based upon a project's contribution to reliability or the ratepayer savings it would produce.
10. In order to rely on § 399.25 to establish the need for a project, we find that a proponent must demonstrate: (1) that a project would bring to the grid renewable generation that would otherwise remain unavailable; (2) that the area within the line's reach would play a critical role in meeting the RPS goals; and (3) that the cost of the line is appropriately balanced against the certainty of the line's contribution to economically rational RPS compliance.
11. A showing that a proposed project fits into one of the two categories identified in D.06-06-034 is the first step. A Commission finding of necessity in a CPCN proceeding must necessarily consider additional factors.
12. The Antelope-Pardee Transmission Project satisfies the requirements of Pub. Util. Code §§ 399.25 and 1001.
13. SCE's preliminary EMF management plan for the Antelope-Pardee Transmission Project should be modified as described in Section VI and the project should be constructed consistent with that modified plan.
14. The Commission retains authority to approve SCE's EMF mitigation plan to ensure that it does not create other adverse environmental impacts.
15. The Final EIR/EIS should be approved.
16. Project approval should be conditioned upon construction of Alternatives 2 and 4 as described in the FEIR/EIS.
17. Project approval should be conditioned upon the completion of the mitigation measures set forth in Attachment A. These mitigation measures are feasible and will minimize or avoid significant environmental impacts. Those mitigation measures should be adopted and made conditions of project approval.
18. The minor modifications to, and deletions of, certain environmental mitigation measures that the Commission has made in response to comments on the proposed decision should be made, because these modifications and deletions provide an equivalent or greater degree of environmental mitigation than would have occurred had these modifications and deletions not been made.
19. After considering and weighing the values of the community, the impacts to parks and recreational areas, the impacts on historical and aesthetic values, and the environmental impacts caused by the project, we conclude that the CPCN for the Antelope-Pardee Transmission Project as described in this decision should be approved.
20. Based on the completed record before us, we conclude that other alternatives identified in the Final EIR/EIS are infeasible, pose more significant environmental impacts, or are less consistent with community values than the route we select in this decision.
21. As demonstrated by the documents included in Attachment D, the City of Santa Clarita's proposed alternative route is not a feasible alternative that offers substantial environmental advantages when compared to the proposed Project or the alternatives analyzed in the EIR/EIS such as to warrant further analysis, nor does the City of Santa Clarita's proposed alternative trigger the need for recirculation of the EIR/EIS under CEQA Guidelines Section 15088.5.
22. Section 399.25 (b)(4) ensures retail rate recovery of prudently-incurred costs for projects the Commission finds to be necessary to facilitate RPS compliance to the extent that cost recovery is not otherwise available.
23. Decision 06-06-034, setting forth the principles and the process for cost recovery under § 399.25, supersedes and moots the briefs submitted by the parties on cost recovery issues.
24. The determinations made in D.06-06-034 regarding implementation of the cost recovery provisions of §399.25 apply here.
25. Section 399.25 requires the Commission to direct SCE to seek the recovery through general transmission rates of the costs associated with the transmission facilities.
26. Section 399.25 is not meant to substitute for the existing cost recovery mechanisms available to support transmission development, nor is it intended to change the ultimate cost responsibility of generators and utility ratepayers. Consequently, nothing in this decision is intended to relieve renewable generators from their responsibility for their fair share of the costs of non-network transmission facilities necessary to interconnect the generator with the network."
27. Notwithstanding a great likelihood of cost recovery through FERC wholesale rates, it is appropriate for SCE to continue to track its project costs through the memorandum account approved by the Commission in response to SCE Advice Letter 1833-E filed on December 13, 2004.
28. Both § 399.25 and D.06-06-034 anticipate that first FERC would act, and that this Commission would step in only if FERC disallows recovery of some costs. Thus, any consideration of cost recovery by this Commission would only come after FERC had finished its work.
29. The Commission has authority to specify a "maximum cost determined to be reasonable and prudent" for the Antelope-Pardee Transmission Project pursuant to Pub. Util. Code § 1005.5.
30. The Commission should approve a maximum reasonable and prudent cost of $92.5 million for this project.
31. Commission approval of SCE's application, as modified herein, is in the public interest.
32. This order should be effective today so that SCE may proceed expeditiously with construction of the authorized project.
IT IS ORDERED that:
1. A Certificate of Public Convenience and Necessity is granted to Southern Edison Company (SCE) to construct the Antelope-Pardee Transmission Project, following the environmentally superior route described in the Final Environmental Impact Report/Environmental Impact Statement (Final EIR/EIS).
2. SCE shall, as a condition of approval, comply with all applicable mitigation measures specified in Attachment A hereto, and as directed by the Commission's Executive Director or his designee(s). SCE shall work with the Commission's Energy Division to create detailed maps for use in construction and mitigation monitoring.
3. Modifications to SCE's preliminary electric and magnetic field (EMF) plan for the Antelope-Pardee Transmission Project are adopted as described in Section VI of this order.
4. SCE shall, as a condition of approval, build the project in accordance with these modifications.
5. Pursuant to Pub. Util. Code § 1005.5(a), the maximum cost (in 2005 dollars) determined to be reasonable and prudent for the Antelope-Pardee Project, including Allowance for Funds Used During Construction, pension and benefits, and administrative & general expenditures, is $92.5 million.
6. We note that the project we approve today is not identical to the project for which SCE developed its cost estimate. SCE may apply for a higher maximum cost if once SCE has developed a final detailed engineering design-based construction estimate for the final route, it can provide adequate justification, and must apply for a lower maximum if it appears that actual cost will be lower than the adopted estimated by at least 1%.
7. SCE shall, prior to commencing construction, submit a detailed EMF mitigation plan for approval of the Commission's Energy Division. The plan shall describe in detail each mitigation element, the cost of each element, and the percentage by which that mitigation will reduce EMF levels.
8. The Executive Director shall supervise and oversee construction of the project insofar as it relates to monitoring and enforcement of the mitigation measures described in the Final EIR/EIS and in Attachment A to this decision in accordance with the Mitigation Monitoring Plan set forth in Appendix 9 of the Final EIR/EIS. The Executive Director may delegate his duties to one or more Commission staff members or outside staff. The Executive Director is authorized to employ staff independent of the Commission staff to carry out such functions, including, without limitation, the on-site environmental inspection, environmental monitoring, and environmental mitigation supervision of the construction of the project. Such staff may be individually qualified professional environmental monitors or may be employed by one or more firms or organizations. In monitoring the implementation of the environmental mitigation measures described in the Final EIR/EIS and in Attachment A, the Executive Director shall attribute the acts and omissions of SCE's employees, contractors, subcontractors, or other agents to SCE. SCE shall comply with all orders and directives of the Executive Director concerning implementation of the environmental mitigation measures described in Attachment A.
9. The Energy Division shall supervise and oversee the construction of the Antelope-Pardee Transmission Project insofar as it relates to monitoring and enforcement of the mitigation measures described in the Final EIR/EIS. The Energy Division may designate outside staff to perform on-site monitoring tasks. The Commission project manager (Energy Division, Environmental Projects Unit) shall have the authority to issue a Stop Work Order on the entire project, or portions thereof, for the purpose of ensuring compliance with the mitigation measures described in the Final EIR/EIS. Construction may not resume without a Notice to Proceed issued by the Environmental Projects Unit of the Energy Division.
10. SCE's right to construct the Antelope-Pardee Transmission Project as set forth in this decision shall be subject to all other necessary state and local permitting processes and approvals.
11. SCE shall file a written notice with the Commission, served on all parties to this proceeding, of its agreement, executed by an officer of SCE duly authorized (as evidenced by a resolution of its board of directors duly authenticated by a secretary or assistant secretary of SCE) to acknowledge SCE's acceptance of the conditions set forth in the Ordering Paragraphs of this decision. Failure to file such notice within 75 days of the effective date of this decision shall result in the lapse of the authority granted by this decision.
12. Consistent with Pub. Util. Code § 399.25, the Commission shall ensure that SCE can recover, through rates, any reasonable costs related to the Antelope-Pardee project that the Federal Energy Regulatory Commission determines not to reflect in authorized transmission rates. SCE shall account for these costs, and seek any needed future recovery, in the manner described in Section IX of this decision.
13. The Final EIR/EIS for the Antelope-Pardee Transmission Project is certified pursuant to the California Environmental Quality Act (CEQA).
14. The Executive Director shall file a Notice of Determination for the project as required by the CEQA and the regulations promulgated pursuant thereto.
15. Upon satisfactory completion of the project, SCE shall file a notice of completion with the Executive Director by the Energy Division.
16. Application 04-12-007 is closed.
This order is effective today.
Dated March 1, 2007, at San Francisco, California.
MICHAEL R. PEEVEY
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
TIMOTHY ALAN SIMON