8. Project Need

PG&E's proposed Tri Valley project consists of several distinct parts. In Phase 1, PG&E proposes construction of 2 new substations, expansion of an existing substation, and two new double-circuit 230 kV transmission lines. One transmission line would connect the existing Vineyard Substation to the Contra Costa-Newark line to the south. The second transmission line would connect the newly constructed Dublin and North Livermore substations to the Contra Costa-Newark line to the east.²⁰ Without connection to the 230 kV system, Vineyard Substation does not currently have sufficient capacity to serve all of the demand in the Pleasanton area. There is no substation located in Dublin at this time. Existing substations (Las Positas and San Ramon) are currently serving the demand in Pleasanton and Dublin through the 60 kV system. Phase 2 would connect PG&E's proposed Dublin and North Livermore substations directly with the Tesla substation, and remove the transmission line connection to Contra Costa-Newark #2. With the installation of new substations and transmission lines, additional transformers at the Vineyard Substation, and connection of Vineyard Substation to the 230 kV system, capacity in the Tri Valley area will increase significantly, as well as allow existing substations to serve local load growth. The question before us is whether both proposed substations and attendant transmission lines, as well as Phase 2, are necessary to meet the expected load growth of the area within the standard five year planning horizon.

8.1 Existing Capacity

The Tri Valley area is served by 12 and 21 kV distribution facilities. The 12 kV system is supplied from the 60 kV transmission system at five substations: Livermore, Vasco, Sunol, Radum, and Parks. The 21 kV system is supplied by three major substations: Vineyard, San Ramon, and Las Positas.

8.1.1 Tri Valley 12 kV System

The Tri Valley 12 kV system consists of five 60/12 kV substations: Livermore, Vasco, Sunol, Radum, and Parks. Livermore consists of two 12.6 megavolt ampere (MVA)²¹ transformers. Vasco consists of one 8.7 MVA transformer and one 9.3 MVA transformer. Sunol has one 12.5 MVA transformer. Radum consists of two 12.6 (MVA) transformers. Parks has one 4.5 MVA transformer. (See Exhibit 11, p. 2-8.) The total installed capacity of the 12 kV system would appear to be 85.4 MW. No modifications to these substations are proposed as part of this project.

8.1.2 Vineyard Substation

The Vineyard Substation is located in Pleasanton and was originally constructed with the expectation that it would be served by a 230 kV transmission line. However, that transmission facility was never constructed and Vineyard Substation has operated as a part of the 60 kV system and is served by the Las Positas-Livermore-Vineyard 60 kV and San Ramon-Radum 60 kV lines. The Vineyard Substation serves customers in the city of Pleasanton and in surrounding unincorporated Alameda County.

Vineyard Substation currently consists of one 230/60/21 kV, 75 MVA transformer and one 60/21 kV, 75 MVA transformer. Connection to the 60 kV system, rather than the 230 kV system, limits the distribution capacity of the substation to 55 MW when operated in a looped configuration. When operated in a temporary radial configuration, the substation capacity is 79.9 MW.²² (See generally Exhibit 1, p. 9.)

8.1.3 San Ramon Substation

The San Ramon Substation is located in southern San Ramon and is served by the 230 kV Pittsburg-Moraga #3 line. The San Ramon Substation serves customers in the cities of San Ramon, Dublin, Pleasanton, and unincorporated Alameda and Contra Costa Counties.

San Ramon Substation currently consists of four 230/21 kV, 75 MVA transformers. (Exhibit 11, p. 2-7.) PG&E states that the distribution capacity limit at San Ramon Substation is 284.7 MW (Exhibit 1-A, p. 22) and that space and equipment limitations at San Ramon Substation prevent additional expansion of the substation capacity (Exhibit 1-A, pp. 21-22, fn 10).

8.1.4 Las Positas Substation

The Las Positas Substation is located in north-eastern Livermore and is served by the 230 kV Contra Costa-Newark #1 line. The Las Positas Substation serves customers in the city of Livermore and unincorporated Alameda County.

Las Positas Substation currently consists of two 230/21 kV, 45 MVA transformers and one 230/21 kV, 75 MVA transformer (Exhibit 11, p. 2-7). PG&E states that the capacity limitation at Las Positas is 136.2 MW (Exhibit 1-A, p. 23) but did not indicate whether there are additional constraints (such as space or equipment) that limits it to this capacity.

8.2 New Capacity²³

8.2.1 Vineyard Substation

Once Vineyard Substation is connected to the 230 kV system, each of the two existing 75 MVA transformers will be able to serve approximately 75 MW. At full build out, as proposed by PG&E, Vineyard Substation will consist of four 75 MVA transformers (see Exhibit 1000, p. B-4), equating to the ability to serve 300 MW of load.

8.2.2 Dublin Substation

At full build out, the Dublin Substation will consist of four 230/21 kV, 45 MVA transformers, equating to a capacity of 180 MW. (See Exhibit 1, pp. 19-20 and Exhibit 1000, p. B-4.)

8.2.3 North Livermore Substation

At full build out, the North Livermore Substation would consist of four 230/21 kV, 45 MVA transformers, equating to a capacity of 180 MW. (See Exhibit 1000, p. B-4.)

8.3 Total Capacity Summary

Utilizing the capacity at existing substations, as described above, capacity available to serve the Tri Valley area in 2002 is 586.2 MW.²⁴ Looking to the future, we assume that the capacity of the Tri Valley 12 kV system remains at 85.4 MW.²⁵ Vineyard Substation will increase in capacity to serve 300 MW. San Ramon Substation capacity will remain at 284.7 MW. Las Positas Substation capacity is assumed to remain at 136.2 MW. Without the construction of either proposed new substation, total capacity would be 806.3 MW. If Dublin substation is constructed, capacity will increase by 180 MW. If North Livermore substation is constructed, capacity will increase an additional 180 MW. Therefore, the capacity of the Tri Valley system with both new substations is 1,166.3 MW, and with only one new substation is 986.3 MW.

8.4 Existing and Forecasted Demand

For purposes of describing existing and expected demand, PG&E breaks the Tri Valley area into three distribution planning areas (DPA). Load projections are made by DPA, and actual load data is collected by DPA. PG&E prepared a 1998 load forecast, by DPA. PG&E currently projects load to increase by 44 MW per year between 2001 and 2004 and thereafter grow by approximately 34 MW per year in the three DPAs that serve the Tri Valley area.²⁶

8.4.1 Tri Valley 12 kV DPA

PG&E's 1998 load growth study identified a load growth rate of 4.5 MW per year for this DPA. However, PG&E does not believe that capacity for the 12 kV system needs to be expanded because it will switch load to the 21 kV system for service once additional capacity expansion occurs on the 21 kV system.

Actual peak load in 2000 was 89.2 MW (Exhibit 8, Exhibit B) which is a reduction from the 1998 peak load of 93.5 MW described in PG&E's PEA (Exhibit 11, p. 2-8). Using 2000 actual load as a starting point and PG&E's forecast of 4.5 MW of growth per year, the expected 2002 load would be 98.2 MW, increasing to 120.7 MW in 2007. Some of this load would be switched to and served by the 21 kV system.

8.4.2 Vineyard/San Ramon DPA

The Vineyard/San Ramon DPA includes San Ramon, Dublin, Pleasanton, and parts of unincorporated Alameda and Contra Costa Counties. PG&E's load forecast includes growth associated with several residential and commercial developments.²⁷ The DPA load is expected to grow by 20 MW per year through 2005 and then decrease to 16 MW per year. (Exhibit 1-A, pp. 16-17.)

The actual peak load in 2000 for the Vineyard/San Ramon DPA was 342.6 MW. (Exhibit 1-A, p. 22 and Exhibit 8, Exhibit B.) Assuming growth proceeds at the pace projected by PG&E and using 2000 actual load as a starting point, forecasted load in 2002 will be 382.6 MW, increasing to 474.6 MW in 2007. However, PG&E states that it expects the Vineyard/San Ramon DPA load to increase by 73 MW between now and 2002, resulting in a 2002 summer peak load of 415.6 MW. (Exhibit 1-A, p. 22.) PG&E does not explain why it believes that load growth between now and 2002 will occur at almost double the rate it forecasted in 1998. Relying on PG&E's summer peak load forecast of 415.6 MW for 2002 and using the 1998 growth rate for future years, PG&E's 2007 load for this DPA would be 507.6 MW.

8.4.3 Livermore/Las Positas DPA

The Livermore/Las Positas DPA includes Livermore and unincorporated Alameda County. Growth in this DPA comes from industrial, commercial, and residential development in Livermore and surrounding Interstate 580.²⁸ The DPA load is expected to grow by 12.4 MW per year through 2004 and then decrease to 6 MW per year. (Exhibit 1-A, p. 18.)

The actual peak load in 2000 for the Livermore/Las Positas DPA was 123.8 MW. (Exhibit 8, Exhibit B.) Assuming growth proceeds at the pace projected by PG&E and using 2000 actual load as a starting point, forecasted load in 2002 will be 148.6 MW, increasing to 191.4 MW in 2007. However, PG&E states that it expects the Livermore/Las Positas DPA load to increase by 22.1 MW between now and 2001, resulting in a 2001 summer peak load of 145.9 MW. (Exhibit 1-A, p. 23.) PG&E now forecasts a 2002 summer peak load of 154.7 MW. Relying on this new forecast of 154.7 MW for 2002 and using the 1998 growth rate for future years, PG&E's 2007 load for this DPA would be 197.5 MW.

8.5 Existing and Forecasted Load Growth Summary

Using PG&E's most aggressive assumptions for 2002 summer peak load results in load of 98.2 MW for the Tri Valley 12 kV DPA, 415.6 MW for the Vineyard/San Ramon DPA, and 154.7 MW for the Livermore/Las Positas DPA, a total of 668.5 MW for the Tri Valley area. Using the 2000 actual load figures and the 1998 forecast growth rates results in 2002 load of 98.2 MW for the Tri Valley 12 kV DPA, 382.6 MW for the Vineyard/San Ramon DPA, and 148.6 MW for the Livermore/Las Positas DPA, a total of 629.4 MW for the Tri Valley area. Using PG&E's most aggressive assumptions, 2007 load would be 120.7 MW for the Tri Valley 12 kV DPA, 507.6 MW for the Vineyard/San Ramon DPA, and 197.5 MW for the Livermore/Las Positas DPA, a total of 825.8 MW for the Tri Valley area. Using the 2000 actual load figures, and the 1998 forecast growth rates results in 2007 load of 120.7 MW for the Tri Valley 12 kV DPA, 507.6 MW for the Vineyard/San Ramon DPA, and 197.5 MW for the Livermore/Las Positas DPA, a total of 786.7 MW for the Tri Valley area.

8.6 Positions of Parties

8.6.1 PG&E

PG&E asserts that the entire project is needed to ensure electric reliability in the Tri Valley Area. PG&E estimates that at full build out (approximately 20 years from now), the total peak load of the Tri Valley area will be 950 MW. (PG&E Opening Brief, p.11.) PG&E argues that by 2002, the load in the Tri Valley area will exceed the existing capacity to serve the area by at least 54.1 MW. PG&E argues that even with the November 2000 passage of Measure D, a slow growth measure²⁹, the Livermore/Las Positas DPA will soon reach capacity and thus the North Livermore substation remains needed. PG&E is concerned that not building its proposed North Livermore substation will require it to serve loads in the North Livermore area through distribution feeders greater than four miles in length, thus reducing reliability. PG&E argues that locating a Dublin substation at its proposed location allows it to serve load growth both in Dublin, and north into Contra Costa County. PG&E argues that locating a Dublin substation at the D1 substation location will not allow the substation to serve load in Contra Costa County, because the length of distribution feeders to reach that area would exceed its distribution planning policies. Likewise, PG&E believes that even if a Dublin substation were located at the D1 substation location, a North Livermore substation would still be required because excessively long distribution feeders would be required to serve North Livermore growth from a Dublin substation.

8.6.2 ISO

The ISO claims jurisdiction to make certain electrical system reliability determinations pursuant to AB 1890 and Pub. Util. Code §345, which provides that the ISO has the responsibility to "ensure efficient use and reliable operation of the transmission grid..." The ISO agrees regarding the need for Phase 1 but does not take a position on Phase 2. The ISO conducted its own review of the project as part of its grid planning process, which included issuing a request for proposals seeking non-wires alternatives for this particular project. At a January 2000 meeting of ISO's governing board, the ISO voted to approve the entire project on the ground the project was urgently needed to provide reliable electric service to the Tri Valley area, subject to completion of a non-wires alternative solicitation. In April 2000, following the solicitation, the ISO's governing board voted to support the Tri Valley Project without regard to routing.

The ISO did not conduct an assessment of the environmental, social or aesthetic impacts of the project, nor did it undertake a detailed consideration of the appropriate transmission line route or substation site. Likewise, the ISO did not conduct a detailed review of PG&E's cost estimates. As described on brief:

The CA ISO reviewed the [PG&E transmission] report and the underlying supporting studies performed by PG&E. [Citation omitted.] While the CA ISO relied on data provided by PG&E, the CA ISO undertook additional analysis to confirm PG&E's work, and to solve power flow cases that were not adequately completed by PG&E. (ISO Opening Brief, p.8.)

Based on its review, the ISO concluded that all Phase 1 alternatives considered in the FEIR were electrically feasible. The ISO did express concerns that if construction delays occurred on the alternatives, reliability could be affected.

The ISO does not believe that the No Project Alternative for North Livermore will allow it to adequately maintain reliability. The ISO states it performed an assessment of the need for a North Livermore substation using data supplied by PG&E. (ISO:Green, RT 1144.) Assuming load growth occurs as described by PG&E, the ISO concurs with PG&E that a substation in North Livermore is needed. The ISO "acknowledges that if load does not materialize in North Livermore the need for a substation in the area may be delayed." (ISO Opening Brief, p. 12.) The ISO found that "the Tri Valley Project is necessary to return the grid in the Tri Valley area to the reliable networked configuration for which the electric grid in the Tri Valley area was designed." (ISO Opening Brief, p. 6.) The ISO does not have a position on Phase 2. As it states on brief:

[T]he need and timing of Phase 2 of the Project depends on the load growth in the Tri-Valley area. [Citation omitted.] The need for Phase 2 is currently estimated by PG&E to be 2009. [Citation omitted.] It is possible that closer to the date when Phase 2 is needed, other alternatives will be available and preferable. (ISO Opening Brief, p.5.)

8.6.3 ORA

ORA argues on brief that PG&E has not adequately considered alternatives, like local generation of demand-side management, to meet the needs of the Tri Valley area. ORA points out that an economic downturn, extremely high energy prices, and a shortage of generation were not considered by PG&E in preparing its load forecasts. ORA did not challenge PG&E's specific forecasts by offering an alternative demand scenario but argues that "PG&E's failure to consider price elasticity, conservation measures and non-wires alternative casts doubt on the reliability of its forecasts." (ORA Opening Brief, p. 4.) ORA also points out that the ISO did not conduct an independent verification of PG&E's load forecasts and for this reason, the Commission cannot simply defer to the ISO's judgment with respect to the need for the project. ORA is also opposed to certification of Phase 2 of the project, and argues that Phase 2 is not needed based on the record developed.

8.6.4 City of Livermore

The City of Livermore argues on brief that need for construction of the North Livermore substation, and attendant transmission facilities, has not been demonstrated. As described by the City of Livermore, the proposed substation is located outside of city boundaries, approximately three miles north of Interstate 580. This area is impacted by Measure D. The City of Livermore argues that "if development and projected load does not materialize within the ISO's 5 year planning horizon, there would be no transmission capacity or reliability problems in the Tri-Valley area which would be addressed by construction of the North Livermore substation and related components." (Livermore Opening Brief, p. 4.) The City of Livermore also states that to the extent that a new Dublin substation can serve load growth along the I-580 corridor, there is additional rationale for not constructing PG&E's proposed North Livermore substation and transmission facilities.

However in its reply brief, the City of Livermore now argues that the North Livermore substation and attendant transmission lines should be approved and constructed. The City of Livermore now believes additional capacity is needed in North Livermore based on approved and projected development.

8.6.5 Other Parties

The Pleasanton Parties, Centex, and the Lin Family do not dispute the need for the Tri Valley project. The Foley intervenors agree, saying "we all understand the need to increase the transmission capacity of the Tri Valley area . . .". (Foley Opening Brief, p. 1.) The LARPD does not address need for Phase 1 of the project but argues that the Commission should not grant a certificate for Phase 2. LARPD argues that denying Phase 2 of the project would not amount to "piecemealing" of the project, as PG&E argues, because it is unclear whether Phase 2 will ever be needed.

²⁰ In the Tri Valley area, the Contra Costa-Newark line runs from north to south and then turns and runs southwest. Thus, although both proposed transmission lines would connect to the same existing line, they would do so at different locations. ²¹ Absent system constraints, each MVA equates to 1 megawatt (MW) of capacity. ²² The transmission system is normally operated in a looped configuration, which allows distribution substation transformers to be fed from more than one transmission source, making this configuration very reliable. A radial configuration is fed from a single transmission source, which increases the capacity limit of the substation, but makes customers served by that distribution substation transformer more susceptible to outages if the transmission source fails. (See generally Exhibit 1, pp. 9-10.) ²³ Phase 2, as proposed by PG&E would not add new capacity to the system but rather, would switch one or more of the substations serving the Tri Valley area to an alternative transmission line. Therefore, Phase 2 is not discussed in the Capacity or Load sections, but will be addressed in the context of the need assessment. ²⁴ However, on page 18 of Exhibit 1-A, PG&E indicates that the capacity to serve the Tri Valley area in 2002 is 597.3 MW. This 11.1 MW difference may be due the inclusion of single customer substations or additional upgrades that the record does not describe. For purposes of our analysis, we have used the more conservative 586.2 MW figure that was derived from the record. ²⁵ However, PG&E can increase the capacity of these substations without submitting an additional application pursuant to General Order (GO) 131-D. For example, substation modification projects, like changing out transformer banks, have a specific exemption under GO 131-D. For this reason, relying on the existing capacity is a conservative assumption. ²⁶ We were unable to recreate the per year growth estimates described by PG&E on page 18, lines 16-17 of Exhibit 1-A. Using the growth assumptions in the prior sections, as referenced by PG&E, we arrive at a growth estimate of 36.9 MW per year through 2004, 32.9 MW in 2005, and 26.5 MW thereafter. We will analyze the need for the project utilizing the individual DPA assumptions, as further described in subsequent sections, but recognize that these estimates may be on the low end. ²⁷ Pleasanton growth is focused in the Bernal Property, Ruby Hills, the Vineyard Corridor Specific Plan, and the Hacienda Business Park. Growth in the Dublin area stems from Dublin Ranch, Santa Rita, and the East Dublin annexation. Growth in Contra Costa County and San Ramon is from the Bishop Ranch Business Park, Gale Ranch, and Windermere. ²⁸ Specifically, PG&E includes loads expected from the South Livermore Specific Plan, Springtown, and development within and around the City of Livermore. This forecast does not include potential development associated with the North Livermore Specific Plan. ²⁹ Measure D modifies Alameda County's East County Area Plan to add new growth control policies. Measure D modifies the previous urban growth boundary in eastern Alameda County. The measure removes land from urban development use designation and converts it to 20-acre enhanced agricultural parcels. Measure D specifically removed Alameda County from participation in the north Livermore planning process and redesignated the area encompassed by the North Livermore Specific Plan to 20-acre enhanced agricultural parcels. The North Livermore specific Plan had included a plan for development of 12,500 housing units. Measure D does not prevent a city from annexing property, thus expanding the urban growth boundary indirectly.