6. Jurisdictional Issues

SDG&E and the ISO assert that the Commission should defer to the ISO's determination regarding the need for transmission projects like the Valley-Rainbow Project. The ISO argues that:

"Transmission planning is an integral part of assuring transmission grid reliability. Public Utilities Code §345 explicitly notes that the CA ISO must ensure compliance with planning criteria as well as operating reserve criteria, making it clear that the CA ISO has responsibility to provide for transmission planning. Moreover, without adequate facilities it is not possible to `ensure efficient use and reliable operation of the transmission grid.' Thus, it would not be possible for the CA ISO to ensure compliance with planning criteria is it did not have a meaningful role in identifying the facilities that must be built to meet the standards, and it it's [sic] determinations of need are ignored in the siting process." (ISO Opening Brief at 57.)

SSRC and ORA disagree that deference to the ISO's determination of need is required under law. SSRC argues:

"The Commission's obligation to determine whether a major transmission line is needed is set forth in State law and has remained unchanged throughout the recent period of energy restructuring legislation, during which the nascent ISO was established. Section 1001 of the Public Utilities Code provides that: `No . . . electrical corporation . . . shall begin the construction of a . . . line, plant, or system, or of any extension thereof, without having first obtained from the commission a certificate that the present or future public convenience and necessity require or will require such construction.' Pub. Util. Code § 1001. This provision of law requires the Commission to determine whether proposed transmission projects are needed, and the Commission has considered CPCN applications and made need determinations pursuant to this provision since the provision's enactment and subsequent to the establishment of the ISO." (SSRC Reply Brief at 61-62.)

SSRC points out that the Commission found just last year that the "ISO has responsibility to ensure the reliability of the State's electrical system pursuant to Pub. Util. Code § 345. However ensuring reliability and deciding that a particular transmission project should be built are two separate issues." (D.01-01-029, 2001 Cal. PUC LEXIS 1000 at *229.) This decision echoes language in D.01-05-059, 2001 Cal. PUC LEXIS 413 at *27, which was also adopted in 2001.

Although we appreciate the ISO's efforts to evaluate this proposed project, we continue to disagree with the ISO's assertion that we must defer to its judgment about the need for transmission projects. Pub. Util. Code § 1001 places an ongoing responsibility on this Commission to evaluate the public convenience and necessity of proposed transmission projects, and therefore we independently assess the record developed in this proceeding to determine whether the Valley-Rainbow Project is needed on the basis of either reliability or economics.