3. Requirements for Certification Under §§ 1001 et seq.

A request for an amendment of an existing CPCN triggers the same kind of review as the request for the original CPCN. Under §§ 1001 et seq. the Commission must review issues such as need, community values and the influence of the proposed project on the environment before granting a CPCN to construct the project at issue. Pub. Resources Code §§ 21000 et seq. (which codifies CEQA) governs environmental review by this Commission and other state agencies. Where the Commission is the lead agency for a project, as in this proceeding, it must prepare an environmental document that assesses the project's environmental implications. (See generally Re Southern California Edison Company, D.90-09-059, 37 CPUC2d 413, 421.) We review the EIR in Section 8, below, and in this Section consider the other issues raised under §§ 1001 et seq.

3.1 Need

In granting CPCNs for the existing Wild Goose storage project and for Lodi's storage project, the Commission interpreted project need under § 1001 in light of its Gas Storage Decision and subsequent decisions. In the Wild Goose and Lodi CPCN decisions the Commission determined that its "let the market decide" policy should apply to competitive gas storage providers and therefore, that it would not test the need for a new gas storage project on a resource planning basis but instead would rely on a presumptive showing of need, established by the builders and users of the new project accepting all of the risk of the unused, new capacity.⁶

The Lodi CPCN decision further explains that the inapplicability of resource planning principles does not mean that a presumptive showing of need will suffice for all purposes. Rather, "a fuller showing of need may be necessary to the extent required by law", for example, to establish conformance with community values and the other criteria listed in § 1002, to show grounds for a finding of overriding consideration with respect to an EIR, or in connection with eminent domain under § 625. (D. D.00-05-048, 2000 Cal. PUC LEXIS 394 at *37.) The Lodi decision goes on to identify, on the record established in that proceeding, several benefits of competitive gas storage including, "(a) increased reliability; (b) increased availability of storage in California; (c) the potential for reduced energy price volatility; and (d) the potential for reduced need for new gas transmission facilities". (Id. at *41.)

At evidentiary hearing in this proceeding, Wild Goose's witnesses attributed benefits of this nature to the expansion project, within certain parameters, since as proposed, the expansion would add approximately 370 MMcf/d of injection capacity and approximately 500 MMcf/d of withdrawal capacity. As we discuss below in Section 7, the record suggests that PG&E's backbone transmission system may be unable to accommodate these additional volumes fully at certain peak demand times. Absent localized constraints of this kind, however, the record does not controvert Wild Goose's testimony that gas storage can exert downward pressure on border price increases attributable to upstream interstate and intrastate transmission constraints (e.g. at Malin and Topock) and likewise, can serve as a substitute for interstate gas during times of high demand. No party disputes that the failure of large customers to inject sufficient gas into storage in California is one factor that contributed to the large price increases for natural gas during the winter of 2000/2001.

Wild Goose witnesses also testified that new electric generation in California and the Pacific Northwest will increase the demand for natural gas and related services beginning in 2002. The record does not provide a solid estimate of that increase, since many determining factors remain unknown or are not specified in the evidence presented (e.g. which plants will be built; when they will begin operations; what existing natural gas capacity, storage capacity or transmission rights they may hold already).

However, the record does demonstrate customer interest in Wild Goose's storage services. According to Wild Goose's witness Amirault, an open season in December 2000 for storage at the existing facility resulted in five new contracts with terms of four to five years, such that the existing facility is fully contracted through March 2005, with some contracts continuing into 2006. A subsequent open season for expansion capacity, held in 2001 from April 11 through May 22, yielded 15 bids for terms from two to 30 years and has resulted in five binding precedent agreements. (The identities of these customers and contract volumes, as well as other contractual terms have been disclosed to the Commission under the confidentiality provisions of § 583 and General Order (GO) 66-C.) Wild Goose is continuing efforts to secure precedent agreements for the full expansion capacity.

Except for Roseville Land, no party directly contests Wild Goose's evidence on need or application of the Commission's "let the market decide policy"-in fact, PG&E affirmatively reiterates its support for imposing the costs of a competitive project on the proponent and customers of that project. Roseville Land's concerns more closely relate to its positions on market-based rates and the validity of Wild Goose's public utility status, which we address in Sections 4 and 5, below. We conclude that Wild Goose has made a sufficient evidentiary showing to satisfy § 1001, as interpreted by Commission precedents applicable to independent gas storage.

3.2 § 1002 Issues

Under § 1002, the Commission must consider the following factors in determining whether or not to grant a CPCN: (1) community values; (2) recreational and park areas; (3) historical and aesthetic values; and (4) influence on the environment. The obligation to consider these factors is independent of the Commission's obligation to conduct a review under CEQA. (See Re Southern California Edison Company, D.90-09-059, 37 CPUC2d 413, 453.)

In assessing community values, as the Lodi CPCN decision states, the Commission "give[s] considerable weight to the views of the local community" and to "the positions of the elected representatives of the area" who address a matter on behalf of their constituents. Wild Goose's application includes a letter of support from State Senator Johannessen, resolutions of support from the Boards of Supervisors from Butte and Colusa Counties, and letters of support from several local waterfowl associations whose interests concern wetlands preservation and seasonal hunting. Many of these statements acknowledge Wild Goose for its environmentally sensitive development and management of the existing facility, which is located in wetlands within the Sacramento Valley flood plain.

The only party to challenge these letters and resolutions, Roseville Land, attempts to discredit them, first, as the product of Wild Goose's solicitations and second, because some of the authors (e.g. the waterfowl associations) may have an economic interest in the success of the expansion project. Roseville Land, which is involved with Wild Goose in civil litigation related to Wild Goose's condemnation of property under eminent domain law in connection with development of the existing facility, is the sole, vocal "community" opponent of the project, and the only, wholly adverse party.⁷ We find Roseville Land's arguments weak. There has been no showing of fraud with respect to these documents, let alone any intimation of impropriety, and we accept them at face value as public statements by their signatories of support for the expansion project.

No controversy surrounds the second and third elements of § 1002. The project does not fall within local, state, or federal recreation areas in either Butte or Colusa Counties. Should buried prehistoric archaeological sites, or the remains of such sites, be discovered in the course of construction, Wild Goose has committed to continue to comply with the Historic Properties Management Plan which was developed in connection with development of the existing facility as part of a Memorandum of Agreement between Wild Goose, the Corps of Engineers' Sacramento District, the State Historic Preservation Office, the Federal Advisory Council on Historic Preservation, and the Commission.

The scoping memo consolidates the third element, influence on the environment, with preparation of the EIR under CEQA. We discuss the project's potential environmental impacts in Section 8.