VII. Comments on Alternate Proposed Decision

The alternate proposed decision of President Michael R. Peevey was mailed to the parties on October 10, 2006 in accordance with Pub. Util. Code § 311(e) and Rule 14.1 of the Commission Rules of Practice and Procedure. Comments on the alternate proposed decision were filed on October 30, 2006 and reply comments were filed on November 6, 2006. SCE's motion for a one day extension was granted, and its late-filed comments were filed on October 31, 2006.

PG&E, SCE, Coral Power and Intergen, Global Energy, TURN, DRA and the CAISO filed opening comments. PG&E, SDG&E, DRA and the CAISO filed reply comments. The utilities, along with the CAISO and Coral and Intergen, support the alternate proposed decision. PG&E and SCE propose further amendments to the alternate proposed decision. PG&E's request for clarification and SCE's request to reduce submission requirements accompanying an economic evaluation would have been more appropriately directed to the proposed decision and are not considered at this time. We reject SCE's request to eliminate the requirement that an applicant must update its economic analysis if costs change by 5%, as counter to the need for a full record to assess a transmission project proposed for its economic benefits. DRA and TURN object to the granting of a rebuttable presumption to a CAISO Board-approved economic determination, but do not raise issues that warrant modification to the alternate proposed decision.

Global Energy expresses reservations about the granting of a rebuttable presumption and proposes two additional safeguards which it contends will reinforce those already included in the alternate proposed decision. Global Energy begins by noting that meeting all of the requirements necessary to qualify for a grant of rebuttable presumption is a formidable task that cannot be met with a pro forma effort, and therefore urges that Ordering Paragraph 1 of the alternate proposed decision not be modified. We concur. Ordering Paragraph 1 herein is unchanged from the alternate proposed decision. Global Energy also argues that the CAISO Board should be required to enter an appearance as a party in any CPCN proceeding in which it seeks a grant of rebuttable presumption for a CAISO Board-approved economic determination. While we agree that ready access to data, models and witnesses is essential for parties seeking to rebut a CAISO Board-approved economic determination, we find that it is sufficient to require that the CAISO, not its Board, become a party to a CPCN proceeding. This requirement has been added to the list of safeguards and is reflected in Ordering Paragraph 5.

SDG&E in its reply comments makes an erroneous statement regarding the requirements for an economic evaluation, contained in both the proposed decision and the alternate proposed decision. Specifically, SDG&E asserts that:

There is no indication in Attachment A that the CAISO is obligated to consider alternatives in order to satisfy the Principles and Minimum Requirements for economic evaluation; the CAISO is simply obligated to identify resource alternatives to a proposed transmission plan if it did consider such resource alternatives. (SDG&E Reply Comments, p. 4.)

SDG&E errs in overlooking the provision in the ordering paragraphs that economic evaluations must be consistent with the guidance provided in the body of this decision, in addition to the Principles and Minimum Requirements contained in Attachment A. Included in this guidance is the requirement that an economic assessment presented in a CPCN should "consider alternative resources that could be added or implemented in lieu of the proposed transmission project" and that "the availability and cost of feasible alternatives should be evaluated as part of the economic evaluation of a proposed project, but ... the exact approach should not be dictated at this time." (Section V.E.)