ALJ/SRT/k47 Mailed 5/17/2001

Decision 01-05-059 May 14, 2001

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of PACIFIC GAS AND ELECTRIC COMPANY For a Certificate of Public Convenience and Necessity Authorizing The Construction of the Northeast San Jose Transmission Reinforcement Project.

Application 99-09-029

(Filed September 9, 1999)

OPINION

TABLE OF CONTENTS

TITLE PAGE

OPINION 1

I. Summary 2

II. Background 4

A. The Project 4

B. Procedural History 6

C. Project Need and Cost 7

D. Environmental Review 9

E. Public Notice of Proceeding 11

F. Scope of Proceeding 11

III. Discussion 13

A. Project Need 13

1. Summary 13

2. Parties' Positions on Project Need 14

a) ORA's Position on Project Need 14

b) Aglet's Position on Project Need 15

c) ISO's Position on Project Need 16

d) PG&E's Position on Project Need 18

3. Discussion of Project Need 19

B. Cost Justification/Effectiveness 20

1. Summary 20

2. Parties' Positions on Cost Justification/Effectiveness 21

a) ORA's Position on Cost Justification/Effectiveness 21

b) Aglet's Position on Cost Justification/Effectiveness 22

c) ProLogis' Position on Cost Justification/Effectiveness 23

d) ISO's Position on Cost Justification/Effectiveness 26

e) Other Intervenors' Positions on Cost Justification/Effectiveness 28

f) PG&E's Position on Cost Justification/Effectiveness 28

3. Discussion of Cost Justification /Effectiveness 29

C. Jurisdiction Over Costs 33

1. Summary 33

2. PG&E's Position on Jurisdiction Over Costs 33

3. Discussion of Jurisdiction Over Costs 35

D. Routing of Transmission Lines 35

1. Summary 35

2. No Project Alternative 36

3. 230 kV Transmission Line 37

a) Proposed Route 37

b) Alternatives 38

c) Proposed Route and Complete Route Alternatives 39

(1) Proposed Transmission Line Route 39

(2) Complete Route Alternatives 39

d) Northern and Central Area Alternatives 40

(1) Northern Underground Alternative 41

(2) I-880-A Alternative 42

(3) I-880-B Alternative and

Modified I-880-B Alternative. 44

(4) Underground Through Business Park Alternative 45

(5) Environmentally Superior Transmission Line Route: Northern and Central Areas. 46

e) Southern Area Alternatives 46

(1) McCarthy Boulevard Alternative 47

(2) Southern Underground Alternative. 48

(3) Overhead Variation of Southern Underground Alternative. 49

(4) Environmentally Superior Alternative in Southern

Area 50

4. 115 kV Power Line Upgrade 51

a) Proposed 115 kV Trimble-Montague Upgrade 51

b) Alternatives to 115 kV Proposed Project 51

(1) Barber Lane Alternative 52

(2) Underground Trimble-Montague Alternative 52

(3) Environmentally Superior 115 kV Project Component 53

E. Substation Locations 53

1. Proposed Substation 53

2. Alternative Substation Sites 54

a) Zanker Road Substation Alternative 54

b) Northern Receiving Station Alternative 55

c) US Dataport Alternative 56

d) Environmentally Superior Substation Site 56

F. EMF Issues 59

1. Summary 59

2. Parties' Positions on EMF Issues 60

a) ProLogis' Position on EMF Issues 60

b) Other Intervenors' Positions on EMF Issues 62

c) PG&E's Position on EMF Issues 62

3. Discussion of EMF Issues 64

a) Bayside Business Park EMF Issues Mooted 64

b) EMF Mitigation 64

G. Property Value Issues 65

1. Summary 65

2. Parties' Positions on Property Value Issues 66

a) ProLogis' Position on Property Value issue 66

b) Fremont's Position on Property Value Issues 67

c) PG&E's Position on Property Value Issues 68

3. Discussion of Property Value Issues 69

IV. Environmental Findings and Statement of Overriding Considerations 73

A. Mitigation Measures Recommended in EIR 73

B. Significant Effects of the Proposed Project 74

C. Environmentally Superior Alternative 74

V. Adequacy and Certification of the Final EIR 76

A. Adequacy of the Final EIR 76

B. Certification of the Final EIR 76

VI. Comments on Draft Decision of the ALJ 77

A. Introduction 77

B. Cost Issues 78

C. Substation Issues 79

D. ISO's Role 82

E. Undergrounding 82

F. Conclusion 83

Findings of Fact 84

Conclusions of Law 87

ORDER 88

Appendix A

Appendix B

Appendix C

Appendix D

Appendix E

Appendix F

I. Summary

This decision grants the application of Pacific Gas and Electric Company (PG&E) for a certificate of public convenience and necessity (CPCN) to build a new 7.3 mile 230 kilovolt (kV) double-circuit transmission line, upgrade certain other transmission facilities, and construct a transmission/distribution substation to serve the Northeast San Jose area. The facilities we approve will be constructed in the cities of Fremont, Milpitas, San Jose and in an incorporated area of Santa Clara County.

We believe PG&E has demonstrated the need for the project to maintain the reliability of its electric system. Demand in the Silicon Valley area is projected to exceed supply as early as 2002. Without this project, PG&E may be forced to curtail load or take other drastic steps to meet demand. Thus, the project is clearly necessary.

We choose the environmentally superior route, as set forth in the Final Environmental Impact Report (FEIR) prepared for the Commission.¹ We reject the routes PG&E and other parties propose, although some of the route we adopt overlaps with portions of the proposed routes. However, each of the routes we reject poses greater harm to the environment than the route we select today. Much of the transmission line will be located near significant wildlife areas populated primarily by birds, including endangered, threatened and other special concern species, as well as burrowing owls and tiger salamanders. Both the Don Edwards San Francisco Bay National Wildlife Refuge (Wildlife Refuge), and lands to be dedicated to the Refuge in the future, are located in the vicinity of the Project. Significant riparian² land, including the riparian corridor next to the Coyote Creek, is also located near, or in some cases, along, the project route. The San Francisco Bay Trail, a trail that ultimately will encircle the Bay, is also located near (and occasionally under) the proposed transmission line path.

Several of the routes or route segments PG&E and other parties propose would have significant adverse biological, visual and geologic impacts on these sensitive environmental resources. For this reason, we give great deference to the findings in the EIR documents that have carefully and extensively studied the proposed routes in adopting the environmentally superior route.

As to the substation, the FEIR concludes that the two possible substation locations are of equal environmental impact. For reasons we explain below, we adopt PG&E's proposed substation location, and reject the alternate - and adjacent - location proposed by intervenor US Dataport, Inc. (US Dataport).

Finally, we direct PG&E to prepare updated, and detailed, cost estimates for the route and substation location we have selected. The estimates presented during the hearing of this application were sorely lacking in detail, as several intervenors pointed out. Moreover, PG&E has submitted no cost information for the transmission line route we select in this decision, although its cost estimates may cover parts of the route. Fairness requires that ratepayers - who will bear most if not all of the cost of installing the transmission facilities - know as closely as possible what the project will cost.

¹ As we discuss below, that route would begin by following the I-880-A Alternative at a tap to the existing PG&E Newark-Metcalf 230 kV transmission line. It would then follow the west side of I-880 along the edge of a business park and along the eastern edge of the soon-to-be-created Pacific Commons Preserve for about 0.75 mile, where a single angle structure would be located in the Preserve. From the angle point located in the Preserve, the route would then turn southwest, following the northwestern edge of the parking lots behind the industrial buildings on Northport Loop West. At Cushing Parkway, the route would transition underground at a pair of transition structures and turn east following the Northern Underground Alternative route along Cushing Parkway and then south on Fremont Boulevard. At the point where the existing 115 kV power line corridor crosses Fremont Boulevard (in the Bayside Business Park), the environmentally superior route would follow the Underground Through Business Park Alternative to the south through the parking lots and loading areas of industrial buildings in the business park area. At the south end of the business park, the route would transition to overhead lines by the use of two transition structures, then continue overhead following the proposed project route through the Fremont Airport property to Dixon Landing Road. At this point the McCarthy Boulevard Alternative would be used, and the route would cross Coyote Creek to McCarthy Boulevard and follow the west side of McCarthy Boulevard for about one-half mile. Immediately south of the Milpitas Sewer Lift facility, the route crosses Coyote Creek to the west, re-joining the proposed route and following the west side of Coyote Creek, through the Santa Clara/San Jose Water Pollution Control Plant, to the proposed substation site. ² Riparian habitat relates to or is located on the bank of a natural watercourse (such as a river) or sometimes of a lake or a tidewater.