Relocation of Facilities

Although SDG&E's application does not focus on the relocation of its facilities in great detail, it is clear from the petition and associated environmental documents, that the relocation is not required in order to add a second circuit to the Imperial Valley-La Rosita transmission line, but rather to accommodate the interconnection of two new merchant transmission projects. Baja California Power, Inc. (Baja)² and Resources³ are each proposing to construct double circuit 230 kV transmission lines to the United States-Mexico border in order to connect transmission and generating facilities in Mexico with the electricity grid in California. Part of the proposed projects includes relocating approximately six poles of SDG&E's existing Imperial Valley-La Rosita transmission line in order to facilitate an easier interconnection of the Baja and Resources transmission lines to the Imperial Valley Substation.

All of the generating units that will utilize the Baja or Resources transmission lines are located in Mexico and are being permitted under Mexican authorization. On October 18, 2001, the Federal Energy Regulatory Commission (FERC) found InterGen to be an Exempt Wholesale Generator (EWG) as defined in Section 32 of the Public Utility Holding Company Act of 1935 (PUHCA). (InterGen Filing, Appendix A.) InterGen states that none of the facilities owned and operated by it or its affiliates will provide retail service to California. (InterGen Filing, p. 2.) InterGen asserts that because the Baja transmission line will be used solely to deliver electricity from its affiliated wholesale plants in Mexico, the Baja line is an eligible facility under PUHCA. Like InterGen, Resources states that its facilities and those of Termoeléctrica will not provide retail service. (Resources Filing, p. 3.) Resources has not yet sought EWG status but states that given the similarity of facts between its project and Baja, it believes that FERC will similarly grant it EWG status. Like InterGen, Resources asserts that its transmission line is an eligible facility under PUHCA. Both InterGen and Resources assert that Pub. Util. Code § 1001 is not applicable to their California projects because Pub. Util. Code § 216(g) exempts owners of EWG facilities from the obligation to obtain a CPCN.

Authority to construct the two proposed transmission lines is subject to approval of a Presidential Permit by DOE.⁴ The planned project route for both the Baja and Resources transmission lines lie entirely within land managed by BLM. DOE is conducting environmental review of the two projects as the lead agency under the National Environmental Policy Act of 1969 (NEPA), with BLM and DOI operating as cooperating agencies. As part of the review, DOE, BLM, and DOI have studied the environmental impacts of relocation of SDG&E's transmission facilities.

Construction of the merchant transmission projects and the related relocation of SDG&E's facilities were reviewed under the DOE's authority established in Executive Order No. 10485, and amended by Executive Order No. 12038, and 10 CFR § 205.320 et seq. (2000). Environmental review of the project is conducted in accordance with NEPA as codified at 10 CFR § 1021. In order to grant a Presidential Permit, DOE must determine if a proposed project is consistent with the public interest by assessing the environmental impacts and the impacts of the project on the operating reliability of the United States electric supply system.

State and local agencies are encouraged to use NEPA documents if the NEPA process is proceeding more quickly than CEQA review and the process complies with CEQA. (CEQA Guidelines § 15221.) In this case, DOE adopted a Finding of No Significant Impact (FONSI) for the project on December 5, 2001.⁵ The Environmental Assessment upon which the FONSI is based describes the mitigation measures that are conditions of the project in Section 2.2.6. No additional circulation of the FONSI is required because on September 10, 2001, the Commission notified the Office of Planning and Research that it intended to use the federal document in place of preparing a separate state document consistent with CEQA Guidelines § 15225.

DOE has concluded that construction of one or both merchant transmission lines "would not constitute a major Federal action significantly affecting the quality of the human environment . . . ." (FONSI, p. 3.)

DOE specifically found that:

"Mitigation measures committed to by the applicants are designed to protect biological, cultural, and paleontological resources. Impacts requiring mitigation on land use; air quality; geology, soils, and seismicity; visual resources; paleontological resources; and socioeconomics are not anticipated. The proposed project would not result in: irreversible or irretrievable commitments of resources, short-term benefits at the expense of long-term environmental degradation, or conflict with the intent of any Executive Orders relative to NEPA compliance." (Environmental Assessment, December 2001, p. 124.)

SDG&E's application addressed assignment of costs associated with relocation of its facilities in order to facilitate interconnection of two merchant transmission and generation projects. In addition, there may be additional environmental mitigation costs required as a result of the relocation of facilities. SDG&E has clarified that any costs associated with relocation of SDG&E facilities, be they planning, engineering, design, construction, or mitigation related, shall not be borne by SDG&E ratepayers.