Discussion

We have two separate and separable questions before us. First, should the condition imposed in D.83-10-004 be eliminated? Second, should SDG&E be granted authority to relocate certain facilities in order to accommodate merchant transmission facilities? We will discuss each question in turn.

The crux of SDG&E's application with respect to the first question is that the condition requiring execution of a contract between SDG&E or SCE and CFE has been superseded by time and market conditions. SDG&E argues that restricting the addition of the second circuit to the Imperial Valley-La Rosita transmission line to execution of a contract between a limited pool of buyers and sellers (SDG&E, SCE, and CFE) is not practical in today's market.

Coral supports SDG&E's application. Coral argues that evidence developed in Investigation 00-11-001 demonstrates that as much as 3,500 megawatts of new generation will be on-line in northern Mexico by 2005. Coral suggests that only some of the proposed new generation can be accommodated by the addition of a second circuit to the Imperial Valley-La Rosita transmission line. SSRC does not support or oppose SDG&E's application, but notes that SDG&E has provided little information to justify the addition of a second circuit to the existing line.

We agree with SDG&E that the structure of California's electric market today is very different from when the condition imposed in D.83-10-004 was adopted. SDG&E is no longer the exclusive power procurement agent for its ratepayers as contemplated by the 1983 condition. Addition of a second circuit to the Imperial Valley-La Rosita transmission line would assist the state by allowing more flexible procurement choices and the potential to interconnect with generating facilities in Mexico. For these reasons, it is appropriate to eliminate the condition imposed by Finding of Fact 16 and Ordering Paragraph 5 based on changed market conditions.

At the time that SDG&E received its CPCN to construct the Imperial Valley-La Rosita transmission line, it was contemplated that a second circuit would be added to the line. The Final Environmental Impact Report prepared for the original CPCN request described the project as being constructed on double circuit steel lattice towers. Initial construction included a single circuit, with the second circuit to be added later, but environmental review of the project occurred for the project as a whole. D.83-10-004 explicitly rejected a request that SDG&E be required to seek further Commission approval to add the second circuit. Instead, the Commission adopted the condition SDG&E now seeks to modify. For this reason, no additional environmental review is required prior to the addition of a second circuit to the Imperial Valley-La Rosita transmission line. This conclusion is specific to the set of facts before us in this case and sets no precedent for future cases. SDG&E must abide by all mitigation and monitoring measures adopted in D.83-10-004 and obtain any necessary permits required by local, state, or federal agencies for installation of the second circuit prior to construction. A copy of this decision will be placed in the formal file of A.82-09-28 to reflect this modification.

Next we turn to the question of whether to allow SDG&E to relocate six transmission support structures to accommodate merchant transmission projects. SDG&E states that relocation of SDG&E's 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 another circuit to the existing SDG&E transmission line, 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.

State and local agencies are encouraged to use NEPA documents if the NEPA process is proceeding more quickly than California Environmental Quality Act (CEQA) review and the process complies with CEQA. (CEQA Guidelines § 15221.) In this case, DOE has prepared a Draft Environmental Assessment for the project, but has not yet adopted findings regarding the environmental impacts of the project. We will await finalized environmental documentation from DOE before we decide whether to allow SDG&E to relocate the poles as requested. SDG&E shall file the finalized environmental documents for the merchant transmission projects with the Commission.