5. Other Statutory Requirements
A number of provisions of the Pub. Util. Code apply to a sale of facilities associated with electric supply, including §§ 362, 363 and 377. PacifiCorp asserts that these provisions are satisfied by this filing or are otherwise inapplicable.
5.1 Section 362
Section 362 of the Pub. Util. Code requires the Commission in any § 851 proceeding to ensure that facilities needed to maintain the reliability of the electric supply remain available and operational, consistent with maintaining open competition and avoiding an overconcentration of market power.
The California Legislature has made clear in amending § 362 that this section relates to electric generating facilities and power plants in California. (See Cal. Legis. Serv. Ex. Sess. Ch. 19 (SB 39) § 1 (effective August 8, 2002) ("(a) Electric generating facilities and powerplants in California are essential facilities for maintaining and protecting the public health and safety of California residents and business. (b) It is in the public interest to ensure that electric generating facilities and powerplants located in California are effectively and appropriately maintained and efficiently operated.") (Emphasis added.)
PacifiCorp states that the sale of the Skookumchuck Project will not jeopardize the reliability of the California electric supply since the Project is a small producer of electricity and all historical output has been sold to Puget Sound Energy, Inc., for service to customers in the State of Washington. PacifiCorp states that output generated from the Project has not been used to meet load requirements in California, and that the sale will not impact competition in California or elsewhere.
5.2 Section 363
Section 363 could require, if the Commission so determines, that utilities selling generation facilities contract with the purchaser to operate and maintain the facility for at least two years. PacifiCorp asserts that § 363 should not apply because the Project is located in the State of Washington, produces a de minimis amount of power, and has never been a factor in providing electric service for California. In any event, the transaction makes clear that the Project will continue in operation for the foreseeable future under its new ownership.
5.3 Section 377
Section 377 of the Code requires Commission approval under § 851 of any public utility's disposal of electrical generation facilities, and it provides that no facility for the generation of electricity owned by a public utility may be disposed of prior to January 1, 2006. The Legislature, however, has amended this section to add, among other things, a new § 377.2, which states:
Notwithstanding Section 377, a facility for the generation of electricity, or an interest in a facility for the generation of electricity, that is located outside of this state, is owned by a public utility that serves 60,000 or fewer customer accounts in this state, and is not necessary to serve the public utility's customers in this state may be disposed of upon approval of the commission pursuant to Section 851 or upon exemption by the commission pursuant to Section 853.
The Skookumchuck Project is located in the State of Washington, PacifiCorp serves fewer than 60,000 customer accounts in California, and the utility asserts that the Project is not necessary to serve its customers in California. Accordingly, the sale is permissible under § 377 and § 377.2.
5.4 Environmental Consideration
The application requests that the Commission find that the proposed sale transaction is not a project subject to the California Environmental Quality Act (CEQA), Cal. Pub. Resources §§ 21000, et seq., or that the transaction is exempt from CEQA.
Under CEQA Guidelines § 15378 a "project" is the whole of an action, which has the potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect change in the environment, and that is: (1) an activity directly undertaken by a public agency; or (2) an activity undertaken by a person supported in whole or part through public agency contracts, funds or assistance; or (3) an activity involving the issuance of a permit, lease, license, certificate or other entitlement. Under CEQA Guidelines § 15061(b)(3), an activity is not subject to CEQA where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.
Here, the Skookumchuck Project has an electrical capacity of 1 MW. However, the primary purpose of the Project has been to store portions of the natural flow of the Skookumchuck River for release in a controlled manner to meet the cooling needs of the Centralia Steam Plant. The Project has relatively low energy output which has been sold to Puget Sound Energy, Inc., which owns and operates the adjacent electrical transmission and distribution system. According to the application and supporting testimony, after the transfer to Washington LLC, the Project will continue to provide cooling water supply to the Centralia Plant. Puget will continue to retain its 12 kV electric distribution line that crosses the property subject to the sale. No electrical output of the Project will be used to serve PacifiCorp's retail customers (unless indirectly through wholesale power markets). Washington LLC will continue to operate under current fish and wildlife agreements and licenses, and will assume the Owners' rights and obligations under the Project Safety Program.
Based on this information, we do not believe the proposed transfer will result in either a direct physical change in the environment or a reasonably foreseeable indirect change in the environment. We believe it can be seen with certainty that there is no possibility that the activity will have a significant effect on the environment. Accordingly, we find that the transfer is not subject to CEQA.
