3. Environmental Review Process

CEQA requires the lead agency (the Commission in this case) to identify environmental impacts of the project, and ways to avoid or reduce environmental damage, for consideration in the determination of whether to approve the project or a project alternative. If the initial study shows that there is no substantial evidence that the proposed project may have a significant effect on the environment, or if the initial study identifies potentially significant effects and the project proponent makes or agrees to revisions to the project plan that will reduce all project-related environmental impacts to less than significant levels, then the lead agency shall prepare a proposed negative declaration or mitigated negative declaration subject to public notice and the opportunity for the public review and comment. (CEQA Guidelines §§ 15070-15073.) CEQA requires that, prior to approving the project, the lead agency consider the proposed or mitigated negative declaration along with any comments received during the public review process, and adopt the proposed or mitigated negative declaration or mitigated negative declaration only if it finds on the basis of the whole record that there is no substantial evidence that the project will have a significant effect on the environment and that the proposed or mitigated negative declaration reflects the lead agency's independent judgment and analysis. (CEQA Guidelines § 15074(a)-(b).) If the lead agency adopts a mitigated negative declaration, CEQA requires that it also adopt a program for monitoring or reporting on the changes or conditions required to mitigate or avoid significant environmental effects. (CEQA Guidelines § 15074(d).)

The Commission's Energy Division conducted an environmental review of the proposed sale, ratemaking treatment, and 2012 capital expenditures pursuant to CEQA. Energy Division issued, for public comment, a draft IS/ND on September 27, 2011, which preliminarily found that the Four Corners sale would have no significant adverse environmental impacts. Energy Division issued the final IS/ND on January 26, 2012, addressing all comments and affirming its draft finding of no significant adverse environmental impacts.