COM/MP1/kpc/acb Mailed May 29, 2003

Decision 03-05-083 May 22, 2003

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Investigation Into Implementation of Assembly Bill 970 Regarding the Identification of Electric Transmission and Distribution Constraints, Actions to Resolve Those Constraints, and Related Matters Affecting the Reliability of Electric Supply.	Investigation 00-11-001 (Filed November 2, 2000)
Conditional Application of PACIFIC GAS AND ELECTRIC COMPANY (U 39 E) for a Certificate of Public Convenience and Necessity Authorizing the Construction of the Los Banos-Gates 500 kV Transmission Project.	Application 01-04-012 (Filed April 13, 2001)

(See Attachment 1 for List of Appearances.)

TABLE OF CONTENTS

Title Page

OPINION 2

1. Introduction and Summary 2

2. Procedural Background 3

2.1 General 3

2.2 Environmental 7

2.2.1 Notice and Public Participation 8

2.2.2 Adequacy and Certification of the FEIR 10

3. Project Description 11

4. Estimated Project Costs 13

5. Position of the Parties 13

6. Discussion 16

6.1 Withdrawal of A.01-04-012 16

6.2 Interconnection Requirements for Path 15 17

6.3 Environmental Impact Report Certification 18

7. Comments on Proposed Alternate Decision 18

8. Assignment of Proceeding 18

Findings of Fact 18

Conclusions of Law 19

ORDER 20

LIST OF ATTACHMENTS

Attachment 1 - List of Appearances

Attachment 2 - List of Acronyms and Abbreviations

OPINION

1. Introduction and Summary¹

Path 15 is the major transmission interface between northern and southern California. During the latter part of 2000 and early 2001, congestion occurred on Path 15 on a regular basis. Although it was the middle of winter when demand was low, generation resources proved to be scarce. The California Independent System Operator (ISO) was forced to regularly call a stage three emergency, which is defined as the point where operating reserves are so low that rolling blackouts are imminent. California experienced two days of rotating outages of firm customer load and numerous days of threatened outages. On February 13, 2001, the Commission's Energy Division issued a report on transmission constraints in California and their impacts on system reliability and electric prices.² In that report, the Energy Division identified constraints on Path 15 between southern and northern California as a major factor affecting system reliability and resulting in unnecessarily high electric prices. In response to this report, on March 29, President Lynch issued an Assigned Commissioner's Ruling in the Transmission Investigation (I.) 00-11-01 that ordered Pacific Gas and Electric Company (PG&E) to file an application for a Certificate of Public Convenience and Necessity (CPCN). PG&E filed a conditional application on April 13, 2001.

On November 6, 2001, PG&E filed a motion to withdraw Application (A.) 01-04-012 because the United States Secretary of Energy announced a Memorandum of Understanding among various public and private entities regarding an upgrade to Path 15 led by the Western Area Power Administration (WAPA). On November 30, 2001, the assigned Commissioner denied PG&E's motion.

By today's decision, we grant PG&E's motion to withdraw its Application for a CPCN for Path 15. Before we grant that motion, we certify the Final Supplemental Environmental Impact Report (FSEIR) as the Environmental Impact Report (EIR) for the project which is the subject of this application and is certified for use by other agencies in considering subsequent approvals of the project, or for portions thereof. Finally, by this decision, the issue of whether or not to construct Path 15 is excluded from any further action by the Commission in I.00-11-001.