9. Discussion of Project Need
We have provided an extensive discussion of the capacity of the existing system and PG&E's load forecasts. No party besides PG&E prepared an independent need forecast for the Tri Valley area. Parties generally took on face value the statement that additional transmission capacity is needed in the Tri Valley area. However, the FEIR recommends no project for North Livermore or Phase 2. Because no party challenged PG&E's load forecasts, we lay out the record as we understand it, and independently analyze whether all elements of PG&E's proposed project are needed.
It is clear that additional capacity is needed in the Tri Valley area to serve its growing load. Although the record is not entirely consistent regarding the capacity of the system in 2002, it is clear that PG&E's forecasted peak load for 2002 exceeds installed capacity.29 Even assuming that short term growth declines by 10% due to the economic downturn or conservation efforts, existing facilities are at capacity. The record is clear that capacity at the Vineyard Substation must be expanded. As articulated by PG&E's witness Pearson,
" . . . there is approximately 100 megawatts of load that's currently fed from San Ramon that should be fed from Vineyard Substation, . . ." (PG&E: Pearson, RT 248.)
Freeing up capacity at the San Ramon Substation will allow it to serve new load nearby, specifically from the Bishop Ranch Business Park and the Gale Ranch and Windemere residential developments that are located in the San Ramon area. Right now load in Dublin is served by distribution feeders from San Ramon Substation, but is generally located more than four miles southeast of the San Ramon Substation. Growth is generally occurring on the southern and eastern end of Dublin, so serving Dublin's load from San Ramon Substation would require longer distribution feeders than PG&E's distribution planning guidelines allow for. Load in Dublin could be served by the Vineyard Substation which is located about 4 miles south of the center of Dublin's growth area but again, some longer distribution feeders would be required. In addition, demand in Dublin is growing rapidly. The record supports construction of a new substation in Dublin.
The record is less clear on the need for a new substation in North Livermore. Witness Pearson indicated that, like San Ramon Substation, the Las Positas Substation is also serving some load that could be served by Vineyard Substation. (PG&E:Pearson, RT 259.) Increased capacity of Vineyard Substation should free some of this capacity to serve growth in the Livermore/Las Positas DPA. Existing demand in this DPA is also generally located south of I-580, with the city center being located about 2 miles south of I-580. Growth in the Livermore/Las Positas DPA also is primarily in southern Livermore.30 Measure D has called into question whether growth in North Livermore will occur within a reasonable planning horizon.
On June 6, 2001, PG&E filed a motion seeking official notice of certain planning documents regarding additional development in the northern and eastern Livermore areas. The Exhibit A documents, regarding the Vasco/Laughlin Specific Plan, do not include any information about when, or by whom the document was produced, its status (approved, pending, or still being developed), or the potential timeframe for any construction. We note that at least a portion of the document has been available since 1988. Regarding the Exhibit B documents, pertaining to industrial, commercial, and business park development, no timeline for the projects is identified. The included map does not identify streets which would allow for an easy understanding of where various parcels are located compared to various substation locations. After comparing the map with other exhibits in this proceeding what becomes clear, is that the bulk of the development identified is expected to take place more than four miles from the location of PG&E's proposed North Livermore substation and much closer to the existing substations of Vasco, Livermore, and Las Positas.
Thus construction of the North Livermore substation will do little to assist with serving these possible developments.
Because of the deficiencies in the documents supplied, it is difficult to determine what we would be taking official notice of. We note that the DEIR identified the North Livermore General Plan Amendment, adopted October 11, 1993 as one of the documents reviewed in preparation of the DEIR. (Exhibit 1000, p.c. 7-71.) This document appears to post date at least a portion of what PG&E has presented as Exhibit A in its June 6, 2001 filing. We decline to take official notice of these documents because of our inability to identify the source, status, and relevant time frame. However, we note that the information contained therein serves to support the analysis in the FEIR and Exhibit 10 (prepared by PG&E) that demonstrates that absent the North Livermore Specific Plan, growth in the Livermore area is located to the south of I-580, outside of the distribution planning guideline areas that would be served by PG&E's proposed North Livermore substation.
In order for development to occur in the North Livermore area, the area would need to be annexed by Livermore. Cal. Gov. Code § 56017 (Deering's 1987) provides "'[a]nnexation' means the annexation, inclusion, attachment, or addition of territory to a city or district." Annexation is the means by which an existing city extends its corporate boundaries.
The Cortese-Knox Act (Cal. Gov. Code §56000 et seq.), passed in 1985, sets the framework within which proposed city annexations, incorporations, consolidations and special district formations are considered. The Cortese-Knox Act establishes a Local Agency Formation Commission (LAFCO) for each county, empowering it to review, approve or deny proposals for boundary changes and incorporations for cities, counties and special districts. The Legislature sets guidelines for the actions LAFCOs can take, providing statewide policies and priorities for the consideration of annexation (Cal. Gov. Code §56844). The Cortese-Knox Act mandates specific factors that a LAFCO must address when considering annexation proposals. LAFCOs establish the ground rules by which the annexation will be processed. There are several steps to annexation.
First, an application may be filed with the LAFCO by petition of affected landowners, registered voters or by resolution from the involved city. Prior to filing, the annexation proponent should meet with the LAFCO's executive officer to establish the minimum requirements for processing, then meet with any affected special districts and agencies to agree upon a taxation scheme and needed property tax transfers. LAFCO action is subject to CEQA and an initial study is required.
The LAFCO then has 30 days to review an annexation application and determine its completeness. The executive officer is prohibited from issuing a certificate of filing if an agreement establishing the allocation of property tax revenues has not been reached during the 30-day review period. A certificate of filing is a precondition to a LAFCO hearing on an application for annexation. If the application is determined to be complete the LAFCO will issue a Certificate of Filing setting the LAFCO hearing within 90 days. The hearings may be continued for up to 70 days. The LAFCO will analyze the proposed annexation in light of its state mandated evaluation criteria and responsibilities and its own adopted policies. Following the hearings, LAFCO will issue a resolution. The consequent conditions set by the LAFCO's resolution will be the ground rules for the Conducting Authority's subsequent action (Cal. Gov. Code §56851).
The involved city, acting as the "Conducting Authority" will hold a public protest hearing, unless the proceedings are waived, to determine whether the proposed annexation may be approved without an election, terminated, or whether an election must be called to determine the proposal's outcome. The number of protests received before and during the hearing will determine which of these options the city must follow. If the annexation is approved, the city will forward a resolution containing the results of its activities to the LAFCO for final review and ratification. If the proposal is terminated, a resolution to this effect will be forwarded to the LAFCO and no new annexation may be proposed on the site for at least one year, unless the LAFCO waives the limitation upon finding that the limitation is detrimental to the public interest (§ 56855 and §56851). When an election is held, only residents of the proposed city or territory have a right to vote on the issue of annexation (§ 57103 and Board of Supervisors v. LAFCO, 3 Cal. 4th 903, 924 (1992)).
LAFCO may approve, conditionally approve or deny the proposed annexation. Within 30 days of the LAFCO's resolution, any person or affected agency may file a written request with the executive officer for reconsideration of the annexation proposal (Cal. Gov. Code §56857).
Under the relevant timelines, once an annexation application is submitted, processing of the application would be expected to take somewhere between 6 and 12 months, assuming no election is required.
Based on the development currently expected (See Exhibit 10 and PG&E's June 6, 2001 Motion), it would make more sense for PG&E to construct a new substation south of I-580 in the southern or western portion of the city or to expand existing substations to meet this need. Construction of the proposed North Livermore substation does not appear to accomplish the objective of serving this new demand, or relieving Las Positas to serve the new demand.
If the Commission were to select PG&E's proposed Dublin substation, it would have no ability to assist in serving load in Livermore because of its remoteness and distance from Livermore's load. If the Commission were to select the environmentally superior Dublin substation, D1, located just north of I-580, this substation might be able to provide some limited assistance to serve northwestern Livermore loads, albeit through long distribution feeders.
The proposed North Livermore substation would be located in a relatively undeveloped area. Given the expected development in the Livermore area, the location of developments, and the difficulty of development in the North Livermore area given the passage of Measure D, it is our assessment that limited load growth will occur in North Livermore within the ISO's five-year planning horizon. Even the ISO acknowledged that the need for a North Livermore substation would be delayed if load does not materialize in North Livermore. (ISO:Green, RT 1144.) The ISO did not undertake a detailed review of PG&E's distribution load forecast. (Ex 802, p. 17.) This assessment coupled with the significant environmental impacts associated with a new North Livermore substation as described in the FEIR, leads us to conclude that PG&E has not demonstrated the public convenience and necessity of the North Livermore portion of the project.
PG&E remains the only party advocating approval of Phase 2 of the project. As described in Exhibit 1001, power flow studies performed by the ISO, in conjunction with PG&E, show that additional service from the Tesla Substation is not likely to be necessary due to transmission system improvements that are underway or expected. The ISO takes no position on whether we should grant a CPCN for Phase 2 because it is not needed until 2009. As the ISO says, "[i]t is possible that closer to the date when Phase 2 is needed, other alternatives will be available and preferable." (ISO Opening Brief, p.5.) PG&E has not demonstrated the public convenience and necessity of Phase 2 of its proposed project.
There is adequate record support that the remainder of Phase 1 of the project is needed pursuant to Pub. Util. Code § 1001. Therefore we should grant a CPCN to PG&E to construct a new substation to serve Dublin and new 230 kV transmission facilities to connect the new Dublin substation and Vineyard substation to the existing Contra Costa-Newark transmission line. The location and routing of the approved project will be addressed in the next section.
Because we have not approved construction of the proposed North Livermore substation and attendant transmission lines, we clearly did not defer entirely to the decision of the ISO that the project is needed. ISO concedes it did not independently analyze PG&E's load forecasts or cost projections. Given the record developed in this case, we simply reach a different conclusion on the need for the proposed North Livermore substation.
Further, we have an independent statutory duty (Pub. Util. Code § 1001) to ensure that projects of this magnitude are necessary. While we appreciate the time and effort the ISO expended in evaluating this project, we view that body's approval as non-binding on us. Here we reached a different conclusion from that reached by the ISO, because of the evidence before us. While we agree with ISO that it has the responsibility to ensure the reliability of the state's electrical system (Pub. Util. Code § 345), we believe that ensuring reliability and deciding that a particular transmission project should be built are two separate issues. In this case, we concur with the ISO that a portion of the proposed project is needed to meet expected future increases in the Tri-Valley's electricity demands.
