3. Project Description

Path 15 is a transmission interface located in the southern portion of PG&E's service area that is in the middle of the ISO control area. It is comprised of two 500 kilovolt (kV), four 230 kV and several 70 kV lines and stretches for approximately 90 miles between the Los Banos and Gates substations in the San Joaquin Valley. The majority of the flow of power from southern California to northern California and to the Pacific Northwest flows through Path 15; the remaining small percentage (loop flow) goes through Arizona, Nevada, Utah and Idaho. Path 15 currently has the capacity to transfer 3950 MW from south to north on its existing lines. It is currently constrained to a lower transfer limit than the rest of the 500 kV system in northern California because there are just two 500 kV lines in this area.

Historically, during periods of low hydroelectric generation availability, PG&E draws on resources from southern California to meet customer demand in its service territory. At certain times, and due to a number of factors, the transfer capability of Path 15 between the zone south of Path 15 (SP15) and the zone north of Path 15 (NP15) reaches its limit before all available electrical resources can be moved between the zones. Congestion occurs, causing power shortages, increased prices, or both in the PG&E control area. During the later part of 2000, congestion on this path began to occur more frequently. The problem escalated further in the first part of 2001 as a shortage of generation in Northern California and reduced imports from the Northwest led to two days of rotating outages of firm customer load and numerous days of threatened outages.

In its application, PG&E identifies the following plan of service to upgrade Path 15:¹⁶

· Construct an uncompensated, single circuit 500 kV transmission line between Los Banos and Gates substations.

· Convert the Gates 500 kV bus from a ring bus arrangement to a breaker-and-a-half arrangement.

· Install 250 MVAR of 500 kV of shunt capacitors at both Gates and Los Banos

· Upgrade the Gates-Midway 230 kV line by either reconductoring portions of this line or by applying a temperature adjusted rating.

We refer to this plan of service as the Path 15 "upgrades" or "the project" throughout this decision. The project would add 1500 MW of power transfer capability to Path 15, increasing the total capability to approximately 5400 MW. In its application, PG&E projects that construction could be completed by summer 2004, if the CPCN were approved by early 2002.