XI. Assignment of Proceeding
Dian M. Grueneich is the assigned Commissioner and Charlotte F. TerKeurst is the assigned ALJ in this proceeding.
1. Our assessment of the economic benefits the DPV2 project is based on its design and construction to provide 1,200 MW of transfer capability between southern California and Arizona, to be operated by the CAISO.
2. SCE projects that DPV2 will provide benefits to CAISO ratepayers of almost $460 million in excess of its costs, with a resulting benefit-cost ratio of 1.71.
3. The CAISO projects that DPV2 will provide levelized annual benefits to CAISO ratepayers between $17 million and $158 million in excess of its costs, with a resulting benefit-cost ratio between 1.25 and 3.34.
4. DRA forecasts that DPV2 will provide net energy benefits of $261 million in excess of DPV2's costs, with a CAISO Ratepayer benefit-cost ratio of 1.31.
5. It is reasonable to adopt a maximum cost for DPV2 pursuant to § 1005.5(a) of $545,285,000 in 2005 dollars, to be decreased by $24,080,000 if the Devers-Harquahala line is terminated at Harquahala Junction and increased by $8,282,000 if the Alligator Rock-North of Desert Center route segment is used. In assessing compliance with the authorized maximum cost, it is reasonable to deflate actual expenditures to their equivalent value in 2005 dollars using the Handy-Whitman Index of Public Utility Construction Costs.
6. The parties' economic evaluations of DPV2 submitted in this proceeding demonstrate that DPV2 will provide significant economic benefits to CAISO-area ratepayers.
7. DPV2 will expand the interstate regional transmission network, increase its reliability, provide more operational flexibility, and provide insurance value as an economic hedge against low-probability, high-impact events.
8. Energy efficiency, demand response, and renewable generation do not hold sufficient near-term promise to provide a feasible or cost-effective alternative to DPV2, and would not offer the operational and other system benefits expected due to DPV2.
9. New transmission and generation options, in addition to demand side resources, should be pursued to meet the need for new energy supply in southern California.
10. Based on the STEP process that considered a range of potential transmission alternatives, DPV2 is the preferred new transmission alternative to provide access to lower-cost energy in the Southwest.
11. Terminating the Devers-Harquahala transmission line at Harquahala Junction would be less expensive than termination at the Harquahala Generating Company switchyard, and is the environmentally preferred alternative.
12. It is reasonable to require SCE to pursue good-faith efforts to reach a commercially reasonable agreement and seek the additional authorizations needed for construction of Harquahala Junction.
13. The Alligator Rock-North of Desert Center alternate route segment would avoid the Alligator Rock ACEC and is environmentally preferable to the proposed project paralleling DPV1 through the ACEC.
14. Neither SCE's PEA nor the Final EIR/EIS for DPV2 addressed environmental impacts if DPV2 is integrated with the Desert Southwest project.
15. The Devers-Valley No. 2 alternative is a viable and acceptable alternative to the West of Devers upgrades proposed by SCE.
16. It is reasonable to allow SCE to construct the Devers-Valley No. 2 transmission line as part of the DPV2 project.
17. A 20-foot increase in the height of DPV2 transmission towers would achieve a 15% reduction in the magnetic field at the edge of the right of way nearest to the DPV2 towers.
18. SCE reports that increasing the height of 33 towers by 20 feet would have an incremental cost of $1.4 million.
19. It is reasonable to require SCE to undertake low-cost EMF mitigation for the DPV2 project, as described in Section V.C of this decision.
20. A comprehensive record on environmental matters was developed in this proceeding through issuance of a draft EIR/EIS, consultation with public agencies and others, and public hearings. All are elements in the environmental process, which culminated in the issuance of the Final EIR/EIS.
21. The project alternatives considered in the Final EIR/EIS constitute a reasonable range of feasible alternatives, as required by the CEQA Guidelines.
22. The Final EIR/EIS identifies significant environmental impacts of the approved route that cannot be mitigated or avoided.
23. The environmental mitigation measures identified in the Final EIR/EIS, as modified by this order and contained in Attachment A, are feasible and will minimize or avoid significant environmental impacts.
24. As State lead agency under CEQA, the Commission is required to monitor the implementation of mitigation measures adopted for this project to ensure full compliance with the provisions of the monitoring program.
25. The Mitigation Monitoring, Compliance, and Reporting Plan in Section X of Attachment B to this decision conforms to the recommendations of the Final EIR/EIS for measures required to mitigate or avoid environmental effects of the project that can be reduced or avoided.
26. The Commission will develop a detailed implementation plan for the Mitigation Monitoring, Compliance, and Reporting Plan.
27. The Commission has reviewed and considered the information in the Final EIR/EIS before approving the project.
28. The Final EIR/EIS is a competent and comprehensive informational tool. With the modifications adopted in this decision, the quality of the information therein is such that we are confident of its accuracy.
29. Statement of Overriding Considerations: The DPV2 project will provide substantial benefits, in that it will provide significant economic benefits for CAISO-area ratepayers, increase the reliability of the interstate transmission network, increase operational flexibility, and provide insurance value as an economic hedge against low-probability, high-impact events. The DPV2 project's unavoidable impacts are acceptable in light of these substantial benefits, which constitute an overriding consideration warranting approval of the project, despite each and every unavoidable impact.
1. The Commission has jurisdiction over the proposed project pursuant to, inter alia, Pub. Util. Code § 1001 et seq.
2. SCE's motion to submit late-filed Exhibit 43 should be granted.
3. The Commission has authority to specify a "maximum cost determined to be reasonable and prudent" for the DPV2 project pursuant to Pub. Util. Code § 1005.5.
4. The Commission should approve a maximum reasonable and prudent cost for this project as specified in Finding of Fact 5.
5. If SCE's final detailed engineering design-based construction estimates for the authorized project is one percent or more lower than the authorized maximum cost, SCE should show cause why the Commission should not adopt a lower amount as the maximum reasonable and prudent cost to reflect the final estimate.
6. If SCE's final detailed engineering design-based construction estimates for the authorized project exceeds the authorized maximum cost, SCE should seek an increase in the approved maximum cost pursuant to § 1005.5(b), to allow the Commission to assess whether the cost increases affect the cost effectiveness and need for the DPV2 project.
7. Commission approval of SCE's application, as modified herein, is in the public interest.
8. Project approval should be conditioned upon construction according to the following route:
In Arizona, the DPV2 project should depart from either the Harquahala Generating Station switchyard or a new Harquahala Junction. If the DPV2 project departs from the Harquahala Generating Station switchyard, it should proceed east, paralleling the existing Harquahala-Hassayampa 500 kV line for approximately five miles to its intersection with SCE's existing DPV1 route at the site of the proposed Harquahala Junction. At this point, whether the route departs from the Harquahala Generating Station switchyard or Harquahala Junction, the route should be the same.
At its intersection with DPV1 at Harquahala Junction, the DPV2 route should turn north (paralleling the DPV1 line) for approximately 2.4 miles to where it should cross I-10, and then proceed 3.7 miles to a point northeast of Burnt Mountain. From there the route should turn west and roughly parallel the north side of I-10 and the Central Arizona Project Canal for approximately 20 miles into La Paz County, then turn southwest, crossing to the south of I-10 and proceeding approximately 5 miles to a point where it meets the El Paso Natural Gas Company (EPNG) pipeline. The route should parallel the EPNG pipeline and DPV1 for approximately 56 miles, across the Ranegras Plain where a series capacitor bank should be constructed and through La Posa Plain. The route may follow or deviate from SCE's proposed route in the Kofa area. The route should cross over Arizona Highway 95 and proceed into the Dome Rock Mountains to the summit of Copper Bottom Pass. The route should turn southwest and descend the western slope of the Dome Rock Mountains to reach the Colorado River.
The route should cross the Colorado River into California and generally follow the DPV1 right of way to SCE's Devers substation. The route should pass into the Palo Verde Valley, five miles south of Blythe, California and should proceed westerly to the top of the Palo Verde Mesa and then turn northwest to a point two miles south of I-10 and five miles southwest of Blythe Airport. At this point, the route should turn west following the DPV1 line to a point five miles east of Desert Center. DPV2 should either follow the DPV1 route for 10.6 miles or the North of Desert Center route for 11.8 miles north of I-10 and Desert Center to avoid the Alligator Rock Area ACEC. On the west side of Alligator Rock ACEC and south of I-10, the route should continue west for another 24 miles, passing a site where a series capacitor should be constructed, to a point in Shavers Valley where it should turn north and cross I-10 about two miles east of the Cactus City Rest Stop. After crossing I-10, the route should continue west-northwest, parallel to the DPV1 line for 46 miles to the Devers substation.
The route west of the Devers substation should leave Devers in a westerly direction paralleling SCE's existing Devers-Valley No. 1 line for 41.6 miles. The route should cross into the San Bernardino National Forest and the Santa Rosa and San Jacinto Mountains National Monument and parallel the Devers-Valley No. 1 line westerly and southwesterly until it terminates at SCE's Valley substation.
9. SCE should be authorized to terminate the Devers-Harquahala transmission line at Harquahala Junction or, if Harquahala Junction does not receive the needed approvals in Arizona or is otherwise not feasible, at the Harquahala Generating Company switchyard.
10. If the USFWS rejects the proposed route for DPV2 paralleling DPV1 through Kofa, that route will become legally infeasible.
11. SCE should be authorized to construct a route in the Kofa area that is acceptable to the USFWS and other permitting agencies, subject to a showing, if a proposed routing modification causes expected DPV2 costs to exceed the authorized maximum cost, that the routing modification is not detrimental to the cost effectiveness of DPV2.
12. SCE should be authorized to construct the North of Desert Center alternative or, if BLM does not authorize the North of Desert Center alternative, to construct DPV2 on a route segment through the Alligator Rock ACEC that is acceptable to BLM if the route segment received full consideration in the Final EIR/EIS or if it deviates from one of the reviewed segments solely within BLM land.
13. If SCE and IID reach agreement regarding integration of DPV2 and the Desert Southwest transmission project, SCE should be required to address environmental and other impacts of the proposed upgrades to DPV2 if it requests Commission authorization to construct the Midpoint substation or any other facilities related to integration of DPV2 and the Desert Southwest transmission project.
14. The West of Devers portion of SCE's proposed DPV2 project is not legally feasible.
15. SCE should be authorized to construct the Devers-Valley No. 2 transmission line as part of the DPV2 project.
16. SCE should amend its EMF management plan as needed to apply its no-cost 500 kV EMF management techniques to the Devers-Valley corridor in addition to the Devers-Harquahala corridor, and to incorporate low-cost EMF mitigation as described in Section V.C of this decision.
17. The Commission retains authority to approve SCE's EMF management plan to ensure that it does not create adverse environmental impacts.
18. Mitigation measure B-16a should be modified to clarify that ravens are not raptors.
19. Section 1.1.4 in the Executive Summary of the Final EIR/EIS should be modified to describe GO 131-D requirements accurately.
20. The mitigation measures contained in Attachment A to this decision should be adopted and made conditions of project approval.
21. The Mitigation Monitoring, Compliance, and Reporting Plan in Section X of Attachment B to this decision should be adopted.
22. The findings required by CEQA Guidelines Section 15091, as contained in Attachment B to this decision, should be adopted.
23. The Final EIR/EIS has been completed in compliance with the CEQA guidelines.
24. Section H.1.3 in the Final EIR/EIS should be deleted.
25. With the modifications adopted in this decision, the Final EIR/EIS satisfies CEQA requirements and should be certified.
26. Pub. Util. Code § 625(a)(l)(A) does not apply to this project. However, SCE must provide notice pursuant to § 625(a)(l)(B) if and when it pursues installation of facilities for purposes of providing competitive services.
27. SCE's motion regarding reimbursement of DRA consultant expenses should be denied, except that SCE should be required to pay all outstanding invoices for DRA consultant expenses expeditiously.
28. This order should be effective today so that SCE may proceed expeditiously with construction of the authorized project.
IT IS ORDERED that:
1. A Certificate of Public Convenience and Necessity (CPCN) is granted, subject to the conditions set forth in this Order, to Southern California Edison Company (SCE) to construct a 500 kilovolt (kV) transmission line between either the Harquahala Generating Station switchyard or a new Harquahala Junction in Arizona to SCE's Devers substation, a 500 kV transmission line between the Devers substation and SCE's Valley substation, and associated facilities (collectively, the Devers-Palo Verde No. 2 (DPV2) project).
2. SCE shall, as a condition of the CPCN, build the DPV2 project in accordance with the following route:
In Arizona, the DPV2 project shall depart from either the Harquahala Generating Station switchyard or a new Harquahala Junction. If the DPV2 project departs from the Harquahala Generating Station switchyard, it shall proceed east, paralleling the existing Harquahala-Hassayampa 500 kV line for approximately five miles to its intersection with SCE's existing Devers-Palo Verde No. 1 (DPV1) route at the site of the proposed Harquahala Junction. At this point, whether the route departs from the Harquahala Generating Station switchyard or Harquahala Junction, the route shall be the same.
At its intersection with DPV1 at Harquahala Junction, the DPV2 route shall turn north (paralleling the DPV1 line) for approximately 2.4 miles to where it shall cross Interstate 10 (I-10), and then proceed 3.7 miles to a point northeast of Burnt Mountain. From there the route shall turn west and roughly parallel the north side of I-10 and the Central Arizona Project Canal for approximately 20 miles into La Paz County, then turn southwest, crossing to the south of I-10 and proceeding approximately 5 miles to a point where it meets the El Paso Natural Gas Company (EPNG) pipeline. The route shall parallel the EPNG pipeline and DPV1 for approximately 56 miles, across the Ranegras Plain where a series capacitor bank shall be constructed and through La Posa Plain. The route may follow or deviate from SCE's proposed route in the Kofa National Wildlife Reserve (Kofa) area. The route shall cross over Arizona Highway 95 and proceed into the Dome Rock Mountains to the summit of Copper Bottom Pass. The route shall turn southwest and descend the western slope of the Dome Rock Mountains to reach the Colorado River.
The route shall cross the Colorado River into California and generally follow the DPV1 right of way to SCE's Devers substation. The route shall pass into the Palo Verde Valley, five miles south of Blythe, California and shall proceed westerly to the top of the Palo Verde Mesa and then turn northwest to a point two miles south of I-10 and five miles southwest of Blythe Airport. At this point, the route shall turn west following the DPV1 line to a point five miles east of Desert Center. DPV2 shall either follow the DPV1 route for 10.6 miles or the North of Desert Center route for 11.8 miles north of I-10 and Desert Center to avoid the Alligator Rock Area of Critical Environmental Concern (ACEC). On the west side of Alligator Rock ACEC and south of I-10, the route shall continue west for another 24 miles, passing a site where a series capacitor shall be constructed, to a point in Shavers Valley where it shall turn north and cross I-10 about two miles east of the Cactus City Rest Stop. After crossing I-10, the route shall continue west-northwest, parallel to the DPV1 line for 46 miles to the Devers substation.
The route west of the Devers substation shall leave Devers in a westerly direction paralleling SCE's existing Devers-Valley No. 1 line for 41.6 miles. The route shall cross into the San Bernardino National Forest and the Santa Rosa and San Jacinto Mountains National Monument and parallel the Devers-Valley No. 1 line westerly and southwesterly until it terminates at SCE's Valley substation.
3. SCE shall pursue good-faith efforts to reach a commercially reasonable agreement and seek the additional authorizations needed for construction of Harquahala Junction. SCE is authorized to terminate the Devers-Harquahala transmission line at Harquahala Junction or, if Harquahala Junction does not receive the needed approvals in Arizona or is otherwise not feasible, at the Harquahala Generating Company switchyard.
4. Official notice is taken that the United States Fish and Wildlife Service (USFWS) has issued a preliminary Determination of Incompatibility regarding construction of DPV2 through Kofa as proposed by SCE.
5. SCE is authorized to construct a route in the Kofa area that is acceptable to the USFWS and other permitting agencies, subject to a showing, if a proposed routing modification causes expected DPV2 costs to exceed the maximum cost adopted in this Order, that the routing modification is not detrimental to the cost effectiveness of DPV2.
6. SCE is authorized to construct the North of Desert Center alternative or, if the United States Department of Interior, Bureau of Land Management (BLM) does not authorize the North of Desert Center alternative, to construct DPV2 on a route segment through the Alligator Rock ACEC that is acceptable to BLM if the route segment received full consideration in the Final Environmental Impact Report/Environmental Impact Statement (Final EIR/EIS) for DPV2 or if it deviates from one of the reviewed segments solely within BLM land.
7. If SCE requests Commission authorization to construct the Midpoint substation or any other facilities related to integration of DPV2 and the Desert Southwest transmission project, SCE shall address environmental and other impacts of upgrades to DPV2 that would be undertaken to integrate DPV2 and the Desert Southwest transmission project.
8. SCE is authorized to construct the Devers-Valley No. 2 transmission line as part of the DPV2 project.
9. SCE shall, as a condition of the CPCN, design and construct DPV2 to increase the transfer capability between southern California and Arizona by at least 1,200 megawatts (MW) and shall turn over at least 1,200 MW of transfer capability to the California Independent System Operator (CAISO).
10. Pursuant to Pub. Util. Code § 1005.5(a), the maximum cost determined to be reasonable and prudent for the DPV2 project, including pension and benefits, and administrative and general expenses, but excluding Allowance for Funds Used During Construction, is $545,285,000 in 2005 dollars, to be decreased by $24,080,000 if the Devers-Harquahala line is terminated at Harquahala Junction and increased by $8,282,000 if the Alligator Rock-North of Desert Center route segment is used. The Handy-Whitman Index of Public Utility Construction Costs shall be used in assessing compliance with the authorized maximum cost.
11. Once SCE has developed a final detailed engineering design-based construction estimate for the final route, if this estimate is one percent or more lower than the authorized maximum reasonable and prudent cost identified in Conclusion of Law 10, SCE shall, within 30 days, file an advice letter to show cause why the Commission should not adopt a lower amount as the maximum reasonable and prudent cost to reflect the final estimate.
12. If SCE's final detailed engineering design-based construction estimate for the authorized project exceeds the authorized maximum cost, SCE shall, within 30 days, file an advice letter to seek an increase in the approved maximum cost pursuant to § 1005.5(b), and shall address whether the cost increases affect the cost effectiveness and need for the DPV2 project.
13. As low-cost electric and magnetic field (EMF) mitigation, SCE shall increase tower and conductor heights by 20 feet along those portions of the DPV2 transmission corridor where there are residential properties within 50 feet of the side of the right of way closer to the DPV2 line. SCE shall apply this low-cost EMF mitigation where there are existing residential properties and where development of new residences is underway at the time SCE undertakes final DPV2 project design.
14. SCE shall amend its EMF management plan to apply its no-cost 500 kV EMF management techniques to the Devers-Valley corridor in addition to the Devers-Harquahala corridor, and to incorporate the low-cost EMF mitigation adopted in Ordering Paragraph 13.
15. SCE shall, as a condition of the CPCN, build the DPV2 project in accordance with its EMF management plan as modified consistent Ordering Paragraph 14.
16. SCE shall, prior to commencing construction, submit a detailed EMF management plan for approval of the Commission's Energy Division. The plan shall describe in detail each mitigation element, the cost of each element, and the percentage by which that mitigation will reduce EMF levels.
17. Mitigation measure B-16a proposed in the Final EIR/EIS is modified as follows:
B-16a Prepare and implement a raven control plan. SCE shall prepare a common raven control plan that identifies the purpose of conducting raven control, provides training in how to identify raven nests and how to determine whether a nest belongs to a raven or a raptor species, describes the seasonal limitations on disturbing nesting raptors species (excluding ravens), describes the procedure for obtaining a permit from the USFWS's Division of Migratory Birds, and describes procedures for documenting the activities on an annual basis. SCE shall gain approval of the plan from the USFWS's Division of Migratory Birds. SCE shall provide this raven control plan to all transmission line companies that conduct operations within the ROW.
18. The second paragraph in Section 1.1.4 in the Executive Summary of the Final EIR/EIS is modified as follows:
No local discretionary (e.g., use) permits are required, since the CPUC has preemptive jurisdiction over the construction, maintenance, and operation of SCE facilities in California. SCE would still have to obtain all ministerial building and encroachment permits from local jurisdictions, and the CPUC's General Order 131-D requires that, in locating electric facilities such as DPV2, SCE consult with local agencies regarding land use matters. The CPUC's authority does not preempt special districts, such as the South Coast Air Quality Management District, or other State agencies or the federal government.
19. The mitigation measures contained in Attachment A to this decision are adopted.
20. The mitigation monitoring and reporting program contained in Section X of Attachment B to this decision is adopted.
21. SCE shall, as a condition of the CPCN, comply with all applicable mitigation measures specified in Attachment A attached hereto, as directed by the Commission's Executive Director or his designee(s). SCE shall work with the Commission's Energy Division to create detailed maps for use in construction and mitigation monitoring.
22. The Executive Director shall supervise and oversee construction of the project insofar as it relates to monitoring and enforcement of the adopted mitigation measures contained in Attachment A to this decision. The Executive Director may delegate these duties to one or more Commission staff members or outside staff. The Executive Director is authorized to employ staff independent of the Commission staff to carry out such functions, including, without limitation, the on-site environmental inspection, environmental monitoring, and environmental mitigation supervision of the construction of the project. Such staff may be individually qualified professional environmental monitors or may be employed by one or more firms or organizations. In monitoring the implementation of the adopted mitigation measures, the Executive Director shall attribute the acts and omissions of SCE's employees, contractors, subcontractors, or other agents to SCE. SCE shall comply with all orders and directives of the Executive Director concerning implementation of the adopted mitigation measures.
23. The findings required by California Environmental Quality Act (CEQA) Guidelines Section 15091, as contained in Attachment B to this decision, are adopted.
24. Section H.1.3 in the Final EIR/EIS is deleted.
25. With the modifications adopted in Ordering Paragraphs 17, 18, and 24, the Final EIR/EIS for the DPV2 project is certified pursuant to CEQA.
26. The Commission finds that the DPV2 project will provide substantial benefits, in that it will provide significant economic benefits for CAISO-area ratepayers, increase the reliability of the interstate transmission network, increase operational flexibility, and provide insurance value as an economic hedge against low-probability, high-impact events. The Commission finds that the DPV2 project's unavoidable impacts are acceptable in light of these substantial benefits, which constitute an overriding consideration warranting approval of the project, despite each and every unavoidable impact.
27. SCE shall file a written notice with the Commission, served on all parties to this proceeding, of its agreement, executed by an officer of SCE duly authorized (as evidenced by a resolution of its board of directors duly authenticated by a secretary or assistant secretary of SCE) to acknowledge SCE's acceptance of the conditions set forth in the Ordering Paragraphs of this decision. Failure to file such notice within 75 days of the effective date of this decision shall result in the lapse of the authority granted by this decision.
28. The Executive Director shall file a Notice of Determination for the project as required by CEQA and the regulations promulgated pursuant thereto.
29. Upon satisfactory completion of the project, SCE shall file a notice of completion with the Executive Director by the Energy Division.
30. SCE's right to construct the DPV2 project as set forth in this decision shall be subject to all other necessary federal, State and local permitting processes and approvals.
31. SCE's motion to submit late-filed Exhibit 43 is granted.
32. SCE shall pay all outstanding Commission invoices for Division of Ratepayer Advocates (DRA) consultant expenses within five days of the effective date of this order. In all other respects, SCE's motion regarding reimbursement of DRA consultant expenses is denied.
33. Application 05-04-015 is closed.
This order is effective today.
Dated January 25, 2007, at San Francisco, California.
MICHAEL R. PEEVEY
President
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
Commissioners
