Discussion

As an integral part of the Commission's decision-making process, it will be necessary for Sierra Pacific to demonstrate sufficient evidence to allow the Commission to comply with CEQA. The Commission cannot make a discretionary decision to approve or deny the proposed transfer until there is a certified environmental document. Sierra Pacific must file a PEA consistent with Rule 17.1 and the requisite Information and Criteria Lists. Therefore, Sierra Pacific is directed to file a new application when it has prepared a PEA with sufficient information concerning the proposed sales transaction that will inform the Commission's decision in this matter. In addition, the new application should more fully describe and explain issues that are raised in the current application, including but not limited to:

1. A thorough description of the current laws, rules or regulations that govern the operations on the Truckee River and the operations of the four hydroelectric plants proposed for transfer. As part of that description, Sierra Pacific should explain the extent of discretion any owner of the water rights for the four hydroelectric facilities may or may not exercise in operating those facilities.

2. Submit the Orr Ditch Decree referenced in this application, and explain its current authority over the Truckee River. Explain the term of that Decree and under what conditions it would cease to operate.

3. Explain the process that has been involved in developing the Truckee River Operating Agreement (TROA) to date, (also referenced in this application) as well as future steps that will be necessary for the TROA to go into effect. Explain the purpose of the TROA with respect to water rights and operations on the Truckee River.

4. Indicate the estimated time period for completion of the CEQA/NEPA⁴ document associated with the TROA and what impact changes in the TROA prior to finalization may have on the environmental review. Indicate the estimated finalization date, if any, for the TROA and when that agreement may go into effect.

5. Explain what impact the TROA is anticipated to have on the operations of the four hydroelectric facilities and what discretion the owner will have over the facility operations.

As a result of the CEQA deficiencies the Commission has not considered the adequacy of the application to comply with § 851 and whether it is in the public interest to find the facilities are no longer used and useful as defined in § 851. Sierra Pacific must ensure that a new application contains sufficient information to allow the Commission to determine the expected impact to ratepayers of the proposed transaction.