6. Licensing Requirements

SDG&E, Border Generation, and ORA take the position that SDG&E should not be required to file a CPCN for either project.³² They argue that the projects fall under specific CPCN exemption provisions of GO 131-D. We examine the requirements of GO 131-D for each project, and address the licensing requirements below.

6.1 Imperial Valley Project

Sections III. B and C of GO 131-D set forth the relevant criteria for evaluating the licensing requirements for substation construction. Section III.B provides in pertinent part:

No electric public utility shall begin construction in this state of any electric power line facilities or substations which are designed for immediate or eventual operation at any voltage between 50 kV or 200 kV or new or upgraded substations with high side voltage exceeding 50 kV without this Commission's having first authorized the Construction of said facilities by issuance of a permit to construct in accordance with the provisions of Sections IX B, X, and XI B of this General Order. An upgraded substation is one in which there is an increase in substation land area beyond the existing utility-owned property or an increase in the voltage rating of the substation above 50 kV. Activities which increase the voltage of a substation to the voltage for which the substation has been previously rated are deemed to be substation modification projects and not substation upgrade projects. (Emphasis added.)

GO 131-D III C provides in pertinent part:

The construction of...substation modification projects which increase the voltage of an existing substation to the voltage for which it has previously been rated within the existing substation boundaries, does not require the issuance of a CPCN or permit by this Commission nor discretionary permits or approvals by local governments.

Because the proposed activities relate to a previously authorized substation (existing substation), would not increase the voltage rating beyond which the substation has previously been rated, and is within the existing substation boundaries, the Imperial Valley Project qualifies as a "substation modification project." Therefore, it does not require the issuance of a Permit to Construct (PTC) or CPCN. However, because it is important for the Commission and its staff to be kept informed of the activities of a regulated utility, SDG&E should file an informational advice letter that includes information establishing the previously authorized substation and previous rating of the substation, a description of how the planned work will be conducted within existing substation boundaries and why the project qualifies as a "substation modification project" pursuant to General Order 131-D.III.B and C. The schedule for this filing is included in the milestones we adopt today. (See Attachment 4.)

6.2 Miguel-Mission Project

As discussed above, a key element of this proposed project would result in increasing the existing 138/69 kV transmission line to 230 kV capacity. Section III.A establishes the CPCN requirement, and provides in pertinent part:

No electric public utility shall begin construction in this state of...or the modification, alteration, or addition to...major electric transmission line facilities which are designed for immediate or eventual operation at 200 kV or more...without this Commission's having first found that said facilities are necessary to promote the safety, health, comfort, and convenience of the public, and that they are required by the public convenience and necessity. (Emphasis added.)

Exceptions are permitted for the replacement of existing power line facilities or supporting structures with equivalent facilities or structures, the minor relocation of existing power line facilities, the conversion of existing overhead lines to underground, or the placing of new or additional conductors, insulators, or their accessories on or replacement of supporting structures already built.

In its November 13, 2001 brief, SDG&E concedes that the magnitude of the Miguel-Mission Project is considerable and that review under the California Environmental Quality Act is appropriate and consistent with the intent of G.O. 131-D and sound public policy. SDG&E also consents that an application providing a Proponents Environmental Assessment (PEA) for environmental review of the proposed project is consistent with GO 131-D and the Commission's Rule of Practice and Procedure 17.1.³³ Thus, the only issue is whether it is appropriate to submit an application for a PTC or a CPCN under GO 131-D.

SDG&E contends that the CPCN process is too lengthy and complicated, requiring the consideration of project need and cost allocation issues in addition to environmental issues. SDG&E requests that rather than requiring a CPCN application, which considers these factors, the Commission permit expedited review under a PTC application process. The rationale is not predicated upon or justified under the specific definitions and criteria of project activity enumerated under GO 131-D A or B. The request is based upon the argument that the issue of project need (whether or not the Miguel-Mission upgrade is an economic benefit to the public) will be determined in this proceeding and that project cost allocation issues should be deferred to FERC jurisdiction.

The magnitude of the proposed project activities, and particularly replacement of existing power line facilities above 200 kV and beyond equivalent levels (138/69 kV to 230 kV), cannot be justified within the GO 131-D-III.B criteria for a PTC. For this reason we do not accept the Joint Recommendation of SDG&E, ORA, and Border Generation with respect to the licensing requirements for this project.

SDG&E is required to file an application for a CPCN consistent with GO 131-D III.A and IX, including a PEA consistent with Commission's Rule of Practice and Procedure 17.1. However we will expedite this process by permitting SDG&E to file its CPCN application under Section IX absent the information required by subparts (c)(d) and (f).³⁴ Since we have addressed economic need and have adopted a cost cap subject to reasonableness review in this proceeding, we do not require the information required by subparts (c) and (d) to move forward with licensing for this project. Based on SDG&E's project description, subpart (f) also does not appear to be relevant, and will not be required. These modifications to the CPCN submittal requirements provide an expedited process comparable to the PTC process described under Section IX.B. At the same time, it maintains the integrity of project description analysis consistent with GO 131-D. III.A. SDG&E should file this application consistent with the milestone schedule we adopt today. (See Attachment 4.)