Discussion
The question before us is whether to allow SDG&E to relocate six transmission support structures to accommodate two proposed merchant transmission projects. Because DOE, BLM, and DOI have conducted an environmental review of the relocation of SDG&E's transmission facilities that meets the requirements of CEQA, there is no need for the Commission to conduct a separate review. Additionally, no one in this proceeding raises any environmental concerns and we have not discovered any.6
SDG&E states that relocation of its existing transmission facilities will facilitate the installation of additional transmission capacity to serve the state. Coral supports relocation of the SDG&E facilities to accommodate construction and interconnection of the two merchant transmission lines. Coral believes that direct connection of the generators in northern Mexico to California's grid is necessary to allow additional power to flow to California. Coral points out that, even with the addition of the second circuit to the existing SDG&E transmission line authorized in D.01-12-016, not all of the planned generation in northern Mexico can be served by SDG&E's system. Coral argues that the Commission should not prejudge the allocation of relocation costs at this time.
Baja and Resources plan to construct merchant transmission lines in order to transmit electricity generated in Mexico to United States markets. Selling and transmitting power to retail customers would normally make Baja and Resources electrical corporations pursuant to Pub. Util. Code § 218 and public utilities pursuant to Pub. Util. Code § 216. Neither Baja nor Resources will engage in retail sales. In addition, InterGen was deemed an EWG by FERC pursuant to 15 U.S.C. § 79z-5a(a)(2)(B) and Resources expects to receive the same designation. This statute specifically defines eligible facilities to include "interconnecting transmission facilities necessary to effect a sale of electric energy at wholesale." And thus Baja is also an EWG. Although Resources has not applied for EWG status as of yet, its project is extremely similar to that of Baja and thus we agree that it is likely also to be granted EWG status. 15 U.S.C. § 79z-5a(e) states that an EWG is not to be considered an electric utility company under the chapter.7 Thus Baja and Resources are not public utilities as a result of their ownership of these transmission lines and are not required to obtain a CPCN from the Commission under Pub. Util. Code § 1001 prior to beginning construction of their projects. This finding is specific to the set of facts surrounding these two wholesale transmission projects.
Because SDG&E and Resources are part of the same parent company, we must also assess whether relocation of the existing transmission support structures causes any affiliate transaction issues. We look first to our affiliate transaction rules as set forth in D.97-12-088, as modified by D.98-08-035 and other decisions under Rulemaking 97-04-011/Investigation 97-04-012 for applicability. For purposes of the affiliate transaction rules, Resources, Termoeléctrica, and Sempra are all defined as affiliates of SDG&E (Rule 1.A.).
Rule III of the affiliate transaction rules requires that utilities shall not provide preferential treatment for affiliates. In this case, SDG&E has proposed to relocate six existing transmission support structures to facilitate the interconnection of two entities, one affiliated and one unaffiliated. The relocation costs will be borne entirely by those requesting the relocation as is common procedure when utility facilities are relocated at the request of a non-utility entity. Actual interconnection agreements between SDG&E and Resources and Baja will be developed consistent with federal requirements for interconnection. Any congestion that occurs, which may limit power flows into SDG&E's Imperial Valley Substation, would be managed by the California Independent System Operator. Thus, any preferential treatment that might occur would be pursuant to FERC requirement and allowed under Rule III.A. Therefore, we find that the proposed transmission facility relocation does not present any apparent conflicts with the affiliate transaction rules. However, we will explicitly require as a condition of relocation, that SDG&E provide no preferential treatment of Resources, Termoeléctrica, or Sempra power flows facilitated by the relocation of existing facilities unless required by FERC as part of an approved congestion management plan.
DOE, BLM, and DOI have studied the environmental impacts of relocation and conclude that no unavoidable adverse impacts on the environment will occur. SDG&E's ratepayers will not bear the cost of the relocation project as described by SDG&E. SDG&E should be authorized to relocate six support structures along the existing Imperial Valley-La Rosita transmission line because it facilitates interconnection of additional transmission facilities, will have no cost to ratepayers, and has limited impact to the environment.
6 We note that it is likely that construction will occur during the active period of the flat-tailed horned lizard, a BLM sensitive species and a California Department of Fish and Game species of special concern. This species may also be considered for listing as a threatened or endangered species by the United States Fish and Wildlife Service. When construction occurs, SDG&E must adhere to the mitigation measures adopted by DOE in the Appendices to the Environmental Assessment, December 2001, Appendix C, pp. 36-40. Additional measures apply if construction occurs during the lizard's active period as spelled out on pp. 39-40 of Appendix C. 7 In addition, Pub. Util. Code § 216(g) makes clear that ownership or operation of a certified EWG does not inherently make such corporation a public utility under state law.
