Conclusions of Law

1. The Commission should adopt the advice letter format described in Appendix A and limit advice letters to electric utilities with retail customers subject to rates authorized by the Commission.

2. Advice letters under Section 399.2.5(c)(1) and (2) should contain evidence and supporting declarations by utility officers at the vice president level or higher as described in this decision and set forth in Appendix A.

3. For advice letters under Section 399.2.5(c)(2), pre-permitting and pre-certification costs should be defined as costs incurred before any application related to the transmission project is disposed of, and may include costs incurred even if the project is not ultimately approved. There should be no pre-set limit on the total amount of costs that a utility may request permission to record.

4. For advice letters under Section 399.2.5(c)(2), eligible costs should be defined as set forth in Appendix A and costs may not be included if they are already accounted for in a FERC transmission rate case, a general rate case at this Commission, or other filing.

5. Any advice letter requesting cost recovery pursuant to Section 399.2.5(c)(2) should include a detailed estimate of expenditures, by type or category of cost and be supported by a declaration by a utility officer at the vice president level or higher.

6. The Director of Energy Division should be authorized to develop standardized formats for the advice letters authorized by this decision, and to require any information and documentation necessary to support the requests made in the advice letters. Any such formats or requirements shall be mandatory for advice letters submitted under Sections 399.2.5(c)(1) and (2).

7. In order to facilitate prudent planning for transmission, this decision should be effective immediately.

ORDER

IT IS ORDERED that:

1. Electric utilities with retail customers subject to rates authorized by the Commission may submit advice letters under Public Utilities Code Section 399.2.5(c)(1) and (2), subject to the requirements in Appendix A of this decision.

2. The Director of Energy Division is authorized to develop standardized formats for the advice letters authorized by this decision, and to require any information and documentation necessary to support the requests made in the advice letters. The utilities shall follow any formats or other documentation requirements specified by the Director of Energy Division in all advice letters submitted pursuant to this decision.

3. Investigation 08-03-010 and Rulemaking 08-03-009 are closed.

This order is effective today.

Dated February 16, 2012, at San Francisco, California.

MICHAEL R. PEEVEY

President

TIMOTHY ALAN SIMON

MICHEL PETER FLORIO

CATHERINE J.K. SANDOVAL

MARK J. FERRON

Commissioners

Appendix A

Requirements for Advice Letters Submitted Under

Pub. Util. Code Section 399.2.5(c)(1) and (2)

General

Advice letters submitted to the Commission under Pub. Util. Code §§ 399.2.5(c)(1) and (2) should adhere to the requirements set forth in this document. The Director of Energy Division is authorized to develop standardized formats for these advice letters and to require any information and documentation necessary to support the requests made in the advice letters.

Format and Showing

Advice letters shall adhere to the following format:

a) Filings under Section 399.2.5(c)(1) that request a finding of eligibility for cost recovery shall be Tier 2 advice letters.

b) Filings under Section 399.2.5(c)(2) that request authority to record pre-permitting costs in a memorandum account shall be Tier 3 advice letters.

c) Filings under Section 399.2.5(c)(2) that request authority to recover costs incurred prior to permitting or certification that have been recorded in a previously established Commission-approved memorandum account shall be Tier 3 advice letters.

Advice letters shall contain evidence and supporting declarations by a utility officer at the vice president level or higher of at least one item from the following list:

a) A determination by a Regional Transmission Organization or the California Independent System Operator (CAISO) that the transmission project in question is reasonably likely to support the state's Renewables Portfolio Standard (RPS) goals, pursuant to a transmission planning process that is fully compliant with Federal Energy Regulatory Commission's Order 890. For CAISO, evidence would include Category 1 or 2 approval in CAISO Transmission Planning Process; OR

b) Evidence that the proposed facility runs through one or more Renewable Energy Transmission Initiative (RETI)-identified competitive renewable energy zones (CREZs) or a Renewable Energy Study Area identified by the Desert Renewable Energy Conservation Plan, or has one terminus in such a preferred area. Evidence would include maps of the proposed transmission project and the most recent relevant information from RETI or the Desert Renewable Energy Conservation Plan, including the generation potential and economic and environmental information for the relevant area; OR

c) Evidence the facility would be a new 200 kilovolt or larger transmission facility, whether network or generation intertie designed to serve multiple RPS-eligible generators. Evidence would be at least two generator interconnection agreements either executed or tendered by the transmission owner to developers of RPS-eligible technology that identify a need for the transmission project.

Eligible Costs

For advice letters under Section 399.2.5(c)(2), eligible costs shall be defined as follows:

d) Costs associated with identifying the need and/or best location for the transmission facility including environmental studies; engineering studies; and public outreach necessary for the preparation of permit applications;

e) Costs related to preparation of local, state, and federal permit applications, including a Proponent's Environmental Assessment as required by Commission Rule 2.4(b);

f) Costs associated with cancellation of long lead-time equipment purchases, such as transformers.

Any advice letter requesting cost recovery pursuant to Section 399.2.5(c)(2) should include a detailed estimate of expenditures, by type or category of cost, and be supported by a declaration by a utility officer at the vice president level or higher.

(End of Appendix)