Decision 02-10-066 October 24, 2002

Before The Public Utilities Commission Of The State Of California

Application of PACIFIC GAS AND ELECRIC COMPANY (U 39 E) For a Certificate of Public Convenience and Necessity Authorizing the Construction of the Tri Valley 2002 Capacity Increase Project .	Application 99-11-025 (Filed November 22, 1999)

ORDER MODIFYING AND DENYING REHEARING

OF DECISION 01-10-029

I. SUMMARY

By this Order, the Commission denies the application for rehearing filed by Pacific Gas & Electric Company (PG&E) of Decision (D.) 01-10-029 (Decision or D.01-10-029) timely filed on November 13, 2001. The Decision was issued in the proceedings for Application (A.) 99-11-025, filed on November 22, 1999. In A.99-11-025, PG&E requested a Commission order authorizing the construction of the Tri Valley 2002 Capacity Increase Project (Project.)

D. 01-10-029 granted PG&E's application for a CPCN for the Project. The Commission found that PG&E demonstrated the need for a portion of the Project it proposed in order to maintain the reliability of its electric system. However, the Commission determined that PG&E did not show that all of the facilities it proposed are necessary to serve expected demand. The Commission also rejected PG&E's proposed route and an alternative proposed by the City of Pleasanton and the Kottiger Ranch Homeowner's Association. Rather, the Commission selected one of the environmentally superior Pleasanton routes that was identified in the Final Impact Report prepared for the Commission. The Decision also granted a CPCN to PG&E to construct its proposed Dublin and North Livermore substations.

In its Application for Rehearing of D.01-10-029, PG&E makes several arguments. PG&E contends that the Commission does not have the statutory authority under state or federal law to review the California Independent System Operator's (ISO) determination that this transmission project is needed or to impose a cost cap on the Project. PG&E also argues that that the Commission wrongly ordered PG&E to show cause why the cost cap should not be lowered. Lastly, PG&E claims that the Commission's reductions of PG&E's cost estimates are arbitrary and unsupported by the factual findings or evidence in the record. PG&E requests oral argument on these issues.

We have carefully reviewed PG&E's contentions and are of the opinion that good cause for rehearing has not been demonstrated. Accordingly, we deny this application for rehearing. However, as explained below, we will modify the Decision to clarify the Commission's bases for jurisdiction.