9. Assignment of Proceeding

Dian M. Grueneich is the assigned Commissioner and Victoria S. Kolakowski and Timothy J. Sullivan are the assigned ALJs in this proceeding.

1. The Commission approved SCE's Application (A.) 05-04-015 for a CPCN for the Devers-Palo Verde No. 2 Transmission Line Project in D.07-01-040 on January 25, 2007.

2. The approved Project required construction in both Arizona and California.

3. The California-only Project would be constructed almost entirely within the existing high voltage transmission rights-of-way occupied by the 500 kV Devers-Palo Verde No. 1 and the 500 kV Devers-Valley No. 1 transmission lines.

4. D.07-01-040 certified a Final EIR for the Project.

5. SCE filed a Petition for Modification of D.07-01-040 on May 14, 2008. SCE filed an Amendment to the Petition on September 2, 2008, and a supplement to the Amendment on September 12, 2008, in accordance with a joint Commissioner-ALJ Ruling issued on July 17, 2008. Due to a number of changed circumstances, SCE made a Supplemental Filing on June 26, 2009.

6. The Petition was filed as a consequence of the ACC's June 6, 2007 decision to deny SCE a permit to construct the Arizona portion of the Project and various SCE efforts after that time to resolve this issue, and therefore the delay in filing the Petition was reasonable.

7. SCE did not present cost-effectiveness information sufficient to demonstrate need for a California-only Project on economic grounds.

8. There is no guarantee that the Arizona portion of the Project will ever be completed, and SCE's letter to the ACC dated May 15, 2009 states that SCE does not intend to file a new application for approval of the Arizona portion of the Project at this time, but may do so in the future based on further interconnection studies.

9. SCE asserts that it has received a large number of interconnection requests for new generation in the Blythe, California area, which would be served by a California-only Project.

10. SCE asserts that the California-only Project is necessary for the power from this new generation in the Blythe area to reach markets in Southern California.

11. SCE's Supplemental Filing identified interconnection requests totaling 6,110 MW that would access the California-only Project, including 2,950 MW of renewable generation at the Midpoint Substation, 1,950 MW of renewable generation in the Julian Hinds-Eagle Mountain area, and 1,210 MW of conventional generation at the Midpoint Substation.

12. SCE cites BLM data stating that as of August 7, 2008, BLM had identified 10,850 MW of solar projects requesting rights-of-way along the Project corridor. These projects are proposed to be physically located along the corridor of the California-only Project.

13. SCE relies upon this data to conclude that the total resources being planned and developed in the Blythe area may actually be greater than evidenced by the CAISO interconnection queue or the BLM data because the lists do not overlap. Thus, the total amount of solar energy being planned in the Blythe area may exceed 10,800 MW.

14. The RETI 1B Report identified a potential of 7,800 MW of large-scale solar generation capacity for the Riverside East-A and Riverside East-B CREZs, which would be served by a California-only Project.

15. The RETI 2A Draft Report presents a Conceptual Transmission Plan which identifies the segments of the California-only Project as capable of delivering the resources in the Riverside East CREZ to load.

16. The RETI analysis confirms that the East Riverside CREZ, which includes the Blythe area, contains some of the most promising renewable resources in California, taking both economic and environmental considerations into account.

17. The CAISO represents that it has studied the impacts on the transmission system of interconnecting new renewable resources in the Blythe area of the Riverside East CREZ and has determined that interconnection of 1,030 MW or more of new generation will trigger the need for construction of a Midpoint to Valley transmission line.

18. No party has challenged any of these facts.

19. Given the potential for renewable resources in the Riverside East CREZ, the substantial work and study already completed on the Project including certification of the Final EIR, the limited environmental impacts of building in an existing high voltage transmission corridor next to an existing 500 kV line, the lack of environmental opposition, and the uncertainty in terms of delay and cost in considering an alternative project to access this CREZ, it is necessary, reasonable and prudent to construct the California-only Project, subject to CAISO approval.

20. Construction of the Arizona portion of the Project would potentially reduce the Project's ability to access the Riverside East CREZ.

21. The California-only Project provides substantial benefits, including access to renewable resources in Riverside County, which outweigh the unavoidable adverse environmental effects of the Project as set forth in D.07-01-040. Hence, these benefits of the California-only Project constitute an overriding consideration warranting approval of the California-only Project.

22. Energy Division staff developed an Addendum to the Final EIR, and that Addendum is appended to this decision as Attachment 2.

23. The California-only Project remains the same as what was studied in the Final EIR/EIS.

24. The renewable resources in the Blythe area are in the preliminary planning stages and thus none of the projects are sufficiently detailed to allow meaningful, non-speculative review. Consequently, a Supplemental EIR is unnecessary for approval of the proposed modifications.

25. The CAISO has not approved a California-only Project, and such approval is necessary to recover construction costs in FERC-administered transmission rates.

26. The modifications necessary for D.07-01-040 are in Attachment 1.

27. A.05-04-015 should be closed.

1. SCE's Amended Petition, as supplemented, satisfies the requirements of Rule 16.4.

2. SCE has not demonstrated that the costs and economic benefits of a California-only Project justify its construction on a purely economic basis.

3. SCE has not demonstrated that construction of a California-only Project is required to meet the state's RPS.

4. SCE has not demonstrated that the California-only Project meets the requirements set forth in California Pub. Util. Code § 399.2.5(b)(4) for cost recovery.

5. It is appropriate to take official notice of RETI Phase 1B Final Report and the RETI Phase 2A Draft Report.

6. The record demonstrates that the cumulative impact of the potential for renewable resources in the Riverside East CREZ, the substantial work and study already completed on the Project including certification of the Final EIR, the limited environmental impacts of building in an existing high voltage transmission corridor next to an existing 500 kV line, the lack of environmental opposition, and the uncertainty in terms of delay and cost in considering an alternative project to access this CREZ, make construction of the California-only Project necessary, reasonable, and prudent, subject to approval by the CAISO.

7. Because construction of the Arizona portion of the Project would potentially reduce the Project's ability to access resources in the Riverside East CREZ, SCE should seek Commission approval prior to pursuing the Arizona portion of the Project in the future.

8. Because the status of the CAISO's interconnection queue and executed interconnection agreements are critical to CAISO approval and the ultimate use of the California-only Project, we should require SCE to provide notice to the Director of the Commission's Energy Division and the Director of the Division of Ratepayer Advocates on the status of interconnection requests and agreements as they relate to the Project every six months. Such notices shall include information on both renewable interconnection requests and agreements, as well as information on conventional generation seeking interconnection to the California-only Project approved here, and any expansion of that project to Arizona.

9. The California-only Project remains the same as what was studied in the Final EIR/EIS and the renewable resources in the Blythe area are in the preliminary planning stages and thus none of the projects are sufficiently detailed to allow meaningful, non-speculative review. Consequently, a Supplemental EIR is unnecessary for approval of the proposed modifications.

10. The benefits of the California-only Project constitute an overriding consideration warranting approval of the California-only Project.

11. The Addendum designated as Attachment 2 should be incorporated in the record of this proceeding.

12. To protect California ratepayers the Commission should direct SCE not to begin construction of the California-only Project until the CAISO approves the California-only Project.

13. A.05-04-015 should be closed.

14. This order should be effective immediately.

ORDER

IT IS ORDERED that:

1. Decision (D.) 07-01-040 is modified as shown in Attachment 1. All other language in D.07-01-040 shall be read and understood to conform to those modifications.

2. The Addendum to the Final Environmental Impact Report designated as Attachment 2 is hereby incorporated into the record of this proceeding.

3. Southern California Edison Company shall seek Commission approval before resuming pursuit of the Arizona portion of the Devers-Palo Verde No. 2 Transmission Line Project.

4. Southern California Edison Company shall not begin construction of the California-only Project until the California Independent System Operator Corporation approves construction of the California-only Project.

5. Southern California Edison Company shall provide notice to the Director of the Commission's Energy Division and the Director of the Division of Ratepayer Advocates on the status of interconnection requests and agreements as they relate to the Project every six months. Such notices shall include information on both renewable interconnection requests and agreements, as well as information on conventional generation seeking interconnection to the California-only Project approved here, and any expansion of that project to Arizona.

This order is effective today.

Dated November 20, 2009, at San Francisco, California.

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