2. Background

A. The Project

High Winds proposes to construct and operate a wind-generating project with approximately 150 megawatts (MW) of generating capacity in the Collinsville-Montezuma Hills Wind Resource Area in southeastern Solano County (the project). The purpose of the project is to meet regional energy needs in an efficient and environmentally sound manner by harnessing the renewable wind resources in this area to generate approximately 450 gigawatt hours of electricity annually from approximately 150 MW capacity. The project will also promote the long-term economic viability of agricultural uses in the Montezuma hills, including grazing and farming.³

The electricity generated by the project will connect to the existing PG&E Vaca-Dixon-Peabody-Contra Costa 230 kilovolt (kV) transmission lines that traverse the area. At the proposed new High Winds substation, the 35 kV power produced by the wind turbine generators will be transformed to 230 kV for interconnection to the PG&E line.

The project will be located on 6,000 acres of land owned by six private property owners. These property owners have already agreed to lease the property and to grant certain easements to High Winds. PG&E also has an exclusive easement over the property for its 500 kV transmission line.

High Winds has requested PG&E's consent to an underground crossing of PG&E's exclusive easement by High Winds' electric and communication facilities. High Winds has also asked PG&E to agree to High Winds' use of an existing road that crosses PG&E's exclusive easement for ingress and egress.

B. The Proposed Agreement Between
PG&E and High Winds

Under the agreement, High Winds may construct, install, replace, remove, maintain, and use six 35 kV electric circuits, including three direct-buried lines of cable and an associated data and communication line, in a rectangular trench that is approximately 200 feet wide and at least three feet below the surface of the ground, within the PG&E exclusive easement (the underground crossing area).⁴ High Winds will use these facilities for the transmission of electric power and related electronic and control signals.

The agreement also permits High Winds to use an existing road that crosses PG&E's exclusive easement (the road area) for vehicular access, ingress and egress to and from High Winds' facilities.

High Winds may not use the exclusive easement area for any other purpose without PG&E's consent and, when required, Commission authorization.

PG&E shall approve the plans and specifications for the project before High Winds begins construction. High Winds shall designate the location of its underground cables with markers set on the ground and shall not fence or enclose its underground facilities unless PG&E requests the installation of a temporary fence during construction.

PG&E has reserved the right to use its exclusive easement as necessary and appropriate to serve its patrons, consumers, and the public. High Winds must coordinate with PG&E to minimize interference with PG&E's use of its exclusive easement, may not use the underground crossing area or the road area in a way that endangers human health and safety, PG&E facilities, or the environment, and may not create a nuisance. If PG&E believes that High Winds' activities are creating a danger, PG&E may order High Winds to stop these activities until appropriate protective measures are taken.

High Winds' use of the underground crossing area and the road area must be compatible with the applicable Commission General Orders (G.O.s) and decisions and other legal requirements.⁵ High Winds may not drill, bore or excavate within thirty feet of PG&E underground facilities, such as gas pipelines, valves, regulators, or electrical conduits. High Winds must maintain the underground crossing area and the road area in good condition and maintain the security of its facilities.

High Winds has had an opportunity to evaluate the condition of the exclusive easement and has entered into this agreement at its own risk, without any warranty by PG&E. High Winds acknowledges that potential environmental hazards, including hazardous substances and "EMFs,"⁶ may exist in, on, or under the exclusive easement. High Winds has agreed to take reasonable precautions to protect its employees, contractors, consultants, agents and invitees from the risk of harm caused by potential environmental hazards.

In addition, High Winds has agreed to indemnify, defend, and hold PG&E harmless from any claims or liability which arise from or are connected with High Winds' occupancy or use of the exclusive easement, except for claims which result from PG&E's sole negligence or intentional misconduct. This indemnification applies to all claims arising out of or connected with the release or discharge of hazardous substances related to High Winds' activities and its use of the exclusive easement. In order to further protect PG&E from liability, High Winds must carry a specified level of insurance coverage, which names PG&E as an additional insured, during the term of the agreement.⁷

PG&E may require High Winds to relocate its facilities, if necessary in PG&E's commercially reasonable judgment, for PG&E's future use of its exclusive easement. Upon receiving 60 days advance notice from PG&E, High Winds must move its facilities to another location approved by PG&E.

This agreement will terminate if High Winds abandons its facilities or under any other conditions stated in High Winds' lease and easement agreements with the property owners. High Winds is deemed to have abandoned its facilities after two years of continued non-use, or four years if the continuous period of non-use results from circumstances beyond High Winds' control.

PG&E retains discretion to determine whether any other persons or the public may occupy or use the exclusive easement.

High Winds may not assign its interests under this agreement without PG&E's prior written consent.

C. Environmental Review

The California Environmental Quality Act (CEQA, Public Resources Code Section 21000, et. seq.), applies to discretionary projects to be carried out or approved by public agencies. A basic purpose of CEQA is to "inform governmental decision-makers and the public about the potential, significant environmental effects of the proposed activities." (Title 14 of the California Code Regulations, hereinafter CEQA Guidelines, Section 15002).

Since the proposed project is subject to CEQA and the Commission must issue a discretionary decision without which the project cannot proceed (i.e., the Commission must act on the Section 851 Application), this Commission must act as either a Lead or a Responsible Agency under CEQA. The Lead Agency is the public agency with the greatest responsibility for supervising or approving the project as a whole (CEQA Guidelines Section 15051 (b)).

Here, Solano County (County) performed the environmental analysis under CEQA as the Lead Agency for the project. The Commission is a Responsible Agency for this proposed project under CEQA. CEQA requires that the Commission consider the environmental consequences of a project that is subject to its discretionary approval. In particular, the Commission must consider the Lead Agency's environmental documents and findings before acting upon or approving the project (CEQA guidelines 15050(b)). The specific activities which must be conducted by a Responsible Agency are contained in CEQA Guidelines Section 15096.

In September 2002, the County issued a Notice of Determination to adopt a final Environmental Impact Report (EIR) and a Statement of Overriding Considerations, and submitted the document to the State Clearinghouse (SCH # 2001082112).

Where an EIR is adopted, the Responsible Agency must make findings for each significant impact as required by Section 15091, and where necessary, shall make findings pursuant to Section 15093, (which is required when a Statement of Overriding Considerations is issued).

The Final EIR identified a number of potentially significant environmental effects (or impacts) that the project will cause. Some of these effects will be fully avoided through the adoption of feasible mitigation measures. Other effects can be substantially lessened, but not fully avoided, and therefore remain significant and unavoidable.

The Commission therefore makes the following findings:

1.) Findings

The Final EIR recommends mitigation measures designed to reduce the significance of the impacts to aesthetics, air quality and biological resources. However, the EIR concludes that these mitigation measures are insufficient to reduce the impacts to a less than significant level and therefore the project will cause significant and unavoidable adverse impacts to Aesthetics (Impact AES-3), Air Quality (Impact AIR-1), and Biological Resources (Impact BIO-7).

The Final EIR concludes that significant and potentially significant environmental impacts that could be mitigated to a less than significant level occur in the areas of Aesthetics (Impacts AES-5 and 6), Biological Resources (Impacts BIO-1, 3, 5, and 6), Communications Interference (Impact COM-1), Cultural Resources (Impacts CUL-1, 2, and 3), Geology, Soils, Mineral Resources, and Seismicity (Impacts GEO-1, 2, 3, and 4), Hazards and Hazardous Materials (Impacts HAZ-1, 2, 3, and 4), Hydrology and Water Quality (Impacts-1, 2, and 4), Land Use and Planning (Impact LUP-1), Noise (Impacts NOI-1, 2, and 4), Public Service and Utilities (Impact PUB-1), and Transportation (Impacts TRA-2 and 3).

The Final EIR concludes that all other potential environmental impacts of the project are less than significant, and that no additional mitigation measures are necessary.

With regards to Aesthetics, Biological Resources, Communications Interference, Cultural Resources, Geology, Soils, Mineral Resources, and Seismicity, Hazards and Hazardous Materials, Hydrology and Water Quality, Land Use and Planning, Noise, Public Service and Utilities, and Transportation, the Commission finds that the project impacts can be reduced to less than significant levels with the implementation of the adopted mitigation measures.

With regards to Aesthetics, Air Quality, and Biological Resources, the Commission finds that there are a number of significant and unavoidable impacts. However, there are a number of overriding considerations that justify our approval of the project.

2.) Statement of Overriding Considerations

The Commission has determined, pursuant to Section 15093 of the State of California CEQA Guidelines, that the benefits of the project outweigh the adverse impacts and that the project should be approved. The Commission specifically finds that there are specific social, economic and other reasons for approving this project, and that there is substantial evidence in the record to determine that the benefits of the project outweigh the adverse impacts and that the project should be approved. Pursuant to this finding, the Commission is adopting and certifies this Statement of Overriding Considerations.

The specific social, economic and other reasons for approving this project, which override the unavoidable construction-related noise and air quality impacts identified in the findings, are as follows:

1. The project is consistent with Solano County Land Use and Circulation Element of the General Plan pertaining to the use of agricultural lands, the Wind Turbine Siting Plan and EIR, and the Solano County Zoning regulations; and

2. The project promotes the long-term economic viability of agricultural uses in the Montezuma Hills, including grazing and dry land farming; and

3. The project meets regional electrical energy needs in an efficient and environmentally sound manner, as provided in the energy element of the Solano County General Plan; and

4. The project provides long-tem environmental benefits through the generation of electricity in a manner that does not generate air pollutant emissions; and

5. The project incorporates feasible mitigation measures to ensure that the environmental impacts are minimized to a reasonable and practicable level.

We have reviewed and considered the Final EIR and the Resolution adopted by the County and find that these documents are adequate for our decision-making purposes under CEQA. We find that the County reasonably concluded that the proposed project eliminates and/or reduces the potential impacts of the project to a less than significant level; and for those that cannot be reduced to less than significant or are unavoidable, the County has adequately illustrated the overriding considerations.

D. Ratemaking Considerations

Since PG&E will not charge High Winds any fee for the two crossings of the exclusive easement area, we need not address ratemaking issues here.