6. Assignment of Proceeding

Michel Peter Florio is the assigned Commissioner and Angela K. Minkin is the assigned ALJ in this proceeding.

Findings of Fact

1. Nevada Hydro previously filed A.07-10-005 and A.09-02-012 seeking a CPCN for the TE/VS 500 kV Interconnect Project.

2. By D.09-04-006, we dismissed A.07-10-005 and A.09-02-012 without prejudice, because Nevada Hydro failed to prepare a complete PEA, as required by CEQA.

3. Without assessing the contentions and representations regarding Nevada Hydro's failure to pay certain obligations, we conclude that A.10-07-001 is procedurally deficient and should be dismissed.

4. The Commission cannot afford to squander its resources on applications that, despite more than 18 months of work, remain vague and speculative as to financing and indeed the project itself.

5. It makes little sense to stay this proceeding while Nevada Hydro seeks expert witnesses to prepare testimony that is critical to the consideration of whether this project is viable, feasible, economic, and whether there is a need for the project.

6. Nevada Hydro has had ample opportunity in A.10-07-001 and in previous applications to develop its project description and financing plan appropriately and to confirm that it can present its case-in-chief, which includes with specificity how it will interconnect with both SDG&E's and SCE's systems, and that the CAISO will accept control as the grid operator; however, none of these actions have occurred.

7. We support the concept of independent transmission owners and operators, which may provide savings for ratepayers if competent independent transmission owners receive a CPCN.

8. It is reasonable to impose a series of conditions that Nevada Hydro, its principals, or subsequent project proponents must meet before an application for this or any similar project will be accepted for formal filing by the Commission.

9. The Letter of Credit and Cash Deposit approach proposed by Nevada Hydro in its Petition for Modification filed on November 9, 2011 does not provide the requisite guarantee of intervenor compensation funding ordered in D.11-07-036.

Conclusions of Law

1. Application 10-07-001 should be dismissed without prejudice.

2. Nevada Hydro, its principals, or subsequent project proponents should be required to comply with a series of conditions in order to have any subsequent application accepted for filing by this Commission:

a. To be considered complete, any application must comply fully with the requirements of the Pub. Util. Code §§ 1001 et seq., General Order 131, the Rules of Practice and Procedure, must fully demonstrate the proposed project's need, and must comply with the detailed requirements to provide a cost control plan, implementation plan, and project management plan;

b. Any subsequent application must ensure that the financial viability of the project is clear and that any financial partner's participation is transparent, as well as the financial viability of the project and proponent's ability to support the project;

c. Any subsequent application must include complete testimony from expert witnesses. Because the application must be complete, parties must be able to rely on the proffered experts and their testimony;

d. Any subsequent application must provide an accurate and stable project description and location and the Energy Division must not accept the PEA as complete without such a description;

e. Any subsequent application must explain how the CAISO is currently considering the project and include a full discussion of how revenue requirements will be calculated and recovered through the Transmission Access Charge, as well as the impact on California ratepayers;

f. To the extent that the project proponents (or subsequent proponents) consider filing a future application for a similar project, the project proponents shall convene a technical workshop before any application is filed at this Commission. The technical workshop must be held in the location of the proposed project;

g. To the extent that a future project of this type is considered, Nevada Hydro (or any subsequent project proponent) is responsible for convening and properly noticing such a workshop, which will be held at Nevada Hydro's expense. The technical workshop must focus, at a minimum, on the proposed project description, route, costs, benefits, and modeling assumptions. The workshops must be widely-noticed and held well before any application is submitted to the Commission. Nevada Hydro must maintain a list of workshop attendees;

h. Nevada Hydro (or subsequent project proponent) must supply a thorough description of the workshop and must explicitly demonstrate in any subsequent application how it has considered and incorporated the input from such a workshop. Nevada Hydro must serve any subsequent application on workshop attendees, among others, as well as on the service list to this proceeding;

i. Prior to any subsequent application being formally filed, Energy Division Staff must review any preliminary application and agree that the application is complete, pursuant to the requirements of this decision; and

j. No subsequent application may be filed until Nevada Hydro demonstrates that it has paid in full all approved reimbursable contract invoices.

3. The Petition to Modify D.11-07-036, filed by Nevada Hydro on November 9, 2011, should be denied.

4. Nevada Hydro should be required to comply with Ordering Paragraph 2 of D.11-07-036 and should be required to post the required performance or surety bond within 15 days of the effective date of this decision.

5. As we determined in D.11-07-036, it is reasonable to require Nevada Hydro to provide a performance or surety bond in the amount of $550,000 and to require the bond to remain in effect until Nevada Hydro has fully compensated all intervenors that the Commission determines have made a substantial contribution to this matter.

6. It is reasonable to require prompt payment to eligible intervenors that the Commission has determined have made a substantial contribution to this proceeding.

7. It is reasonable to require Nevada Hydro or its principals to demonstrate that all approved intervenor compensation claims have been paid in full within 30 days of our orders so authorizing, including any authorized interest payments. It is reasonable to require Nevada Hydro to file a status report on pending claims in the new docket.

8. Because the application is dismissed, all pending motion should be dismissed as moot.

9. This proceeding should be closed, although Nevada Hydro should be ordered to post the requisite bond, to honor all intervenor compensation claims awarded by the Commission, and to ensure that the reimbursable contracts with the Commission's Energy Division consultants for environmental review of the project and with DRA for expert consultants are paid in full.

10. Hearings are not necessary.

11. This decision should be effective today.

ORDER

IT IS ORDERED that:

1. Application 10-07-001 is dismissed without prejudice. To the extent that The Nevada Hydro Company (Nevada Hydro), its principals, or subsequent project proponent chooses to pursue the proposed Talega-Escondido/Valley-Serrano Transmission Line Interconnect or other similar project, the project proponent must comply with the following explicit requirements:

a. To be considered complete, any subsequent application must comply fully with the requirements of the Pub. Util. Code §§ 1001 et seq., General Order 131, and the Rules of Practice and Procedure, must fully demonstrate the proposed project's need, and must comply with the detailed requirements to provide a cost control plan, implementation plan, and project management plan;

b. Any subsequent application must ensure that the financial viability of the project is clear and that any financial partner's participation is transparent, as well as the financial viability of the project and proponent's ability to support the project;

c. Any subsequent application must include complete testimony from expert witnesses. Because the application must be complete, parties must be able to rely on the proffered experts and their testimony;

d. Any subsequent application must provide an accurate and stable project description and location and the Energy Division must not accept the Proponent's Environmental Assessment as complete without such a description;

e. Any subsequent application must include a discussion of the California Independent System Operator's current consideration of the project and include a full discussion of how revenue requirements will be calculated and recovered through the Transmission Access Charge, as well as the impact on California ratepayers;

f. To the extent that the project proponents (or subsequent proponents) consider filing a future application for a similar project, the project proponents shall convene a technical workshop, before any application is filed at this Commission. The technical workshop must be held in the location of the proposed project;

g. To the extent that a future project of this type is considered, Nevada Hydro (or any subsequent project proponent) is responsible for convening and properly noticing such a workshop, which will be held at Nevada Hydro's expense. The technical workshop must focus, at a minimum, on the proposed project description as a stand-alone project, the proposed route, costs, benefits, and modeling assumptions,. The workshop must be widely-noticed and held well before any subsequent application is filed at the Commission. Project proponents must maintain a list of workshop attendees;

h. Nevada Hydro (or subsequent project proponent) must supply a thorough description of the workshop and must explicitly demonstrate in any subsequent application how it has considered and incorporated the input from such a workshop. Project proponents must serve any subsequent application on workshop attendees, among others, as well as on the service list to this proceeding;

i. Energy Division Staff must review any preliminary application and must agree that the application is complete, pursuant to the requirements of this decision. Nevada Hydro (or subsequent project proponents) must include a letter from the Director of the Energy Division that states the application is complete as an attachment to any subsequent application tendered for formal filing;

j. Prior to a subsequent application being accepted for filing, Nevada Hydro must demonstrate that it has paid in full all reimbursable contract invoices approved by the Energy Division and the Division of Ratepayer Advocates. Nevada Hydro shall include a declaration that all such approved invoices have been paid; and

k. When a new application is filed, Nevada Hydro (or subsequent project proponents) must demonstrate that all authorized intervenor compensation claims have been paid within 30 days of our authorizing decisions, and that such payments include such interest payments as are authorized in those decisions, or Nevada Hydro must file a status report on any pending claims in the new docket.

2. The Nevada Hydro Company's Petition to Modify Decision (D.) 11-07-036 is denied. Consistent with D.11-07-036 and Ordering Paragraph 2, The Nevada Hydro Company shall provide a surety or performance bond in the amount of $550,000 that shall remain in effect until it has fully compensated all eligible intervenors determined to have made a substantial contribution to this proceeding.

3. No later than 15 days after the effective date of this proceeding, The Nevada Hydro Company shall file and serve proof of the bond in this proceeding.

4. This proceeding is closed. Consistent with the requirements of Decision 11-07-036, the Nevada Hydro Company must post the bond as directed in Ordering Paragraphs 2 and 3, must honor authorized intervenor compensation requests and must ensure that the reimbursable contracts with the Commission's Energy Division consultants for environmental review of the project and with the Division of Ratepayer Advocates for expert consultants are paid in full.

5. The hearing determination is changed to no hearings necessary.

6. Application 10-07-001 is closed.

This order is effective today.

Dated May 24, 2012, at San Francisco, California.

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