Scoping Memo

Sections 1001 and 1002 provide the basic scope of this proceeding. In addition to the determination of need underlying the grant of a CPCN, § 1002 provides, in pertinent part, that the Commission, as a basis for granting any CPCN pursuant to § 1001, shall give consideration to the following factors: (1) community values, (2) recreational and park areas, (3) historical and aesthetic values, and (4) influence on environment.

General Order (GO) 131-D contains rules relating to the planning and construction of electric facilities. It prescribes that, prior to issuing a CPCN, the Commission must find that the project is necessary to promote the safety, health, comfort, and convenience of the public. Section X of GO 131-D requires additionally that the applicant describe the measures taken or proposed by the utility to reduce the potential exposure to EMFs generated by the proposed facilities. The issues raised by GO 131-D are within the scope of the proceeding.

The scope of this proceeding also encompasses the requirements of CEQA. The environmental impact report (EIR) to be prepared pursuant to CEQA must identify the significant effects on the environment of the project, identify alternatives to the project, and indicate the manner in which significant environmental effects can be mitigated or avoided. CEQA requires that the Commission cannot approve the proposed project or an alternative unless it mitigates or avoids the significant effects on the environment, or finds that economic, social, or other conditions make it infeasible to mitigate those effects or that the agency is willing to accept potential significant effects because of the project benefits.

On January 21, 2003, the Energy Division issued its Notice of Preparation (NOP) of an EIR for the Jefferson-Martin project. The NOP is available electronically, along with the application, the Proponent's Environment Assessment (PEA), and other information about the environmental review process, at the following address:

http://www.cpuc.ca.gov/Environment/info/aspen/jefferson_martin/jeffmartin.htm

The NOP describes potential environmental effects of the proposed project and alternatives that will be evaluated through the EIR process. The areas of environmental review include aesthetics, air quality, biological resources, cultural and paleontological resources, geology and soils, hazards and hazardous materials, hydrology and water quality, land use and planning, noise, population and housing, public service and utilities, recreation, transportation and traffic, property values, EMF effects,⁴ the location of the transmission line near schools and residential areas, environmental justice issues, and alternatives including local power generation facilities. In addition to mitigation measures, the EIR will evaluate alternatives to the proposed project including different routes, the "no project" alternative, and "non-wires" alternatives (e.g., generation, distributed generation, and demand side management). The EIR may also evaluate alternatives such as partial undergrounding and tower modifications. All of these issues are within the scope of the proceeding.

The results of the environmental review will be considered, along with the other issues identified in this scoping memo, through evidentiary hearings. Most of the issues raised by protestants are within the scope of the CEQA review. Parties should pursue these concerns in that forum. The CEQA process is expected to generate alternatives for the Commission's consideration based on the purpose and need and CEQA requirements. The EIR will be an informational document, with its analysis available to the Commission and to parties in their preparation of testimony and participation in the evidentiary hearings.

ORA and other protestants question the need for the proposed project, whereas PG&E asserts that the Commission must defer to the ISO regarding need. The Commission has found in several recent proceedings that, separate from the ISO's responsibility, the Commission has the jurisdiction and responsibility under § 1001 to evaluate whether a transmission project is needed. Consistent with those conclusions, the issue of need for the Jefferson-Martin project, in its proposed form or in alternative forms, is within the scope of the proceeding.

In its PEA, PG&E's evaluation of the need for the proposed project includes descriptions of existing power system facilities and capabilities within the Project Area, new power plants whose construction is under consideration, and customer energy efficiency programs. It analyzes three load growth scenarios: a "High" forecast based on a September 1999 forecast, a "Medium" forecast based on a December 2000 forecast, and a "Low" forecast based on the most recent August 2002 forecast. The 280 Citizens Group raised several concerns with PG&E's evaluation of need.

PG&E is directed to submit comprehensive testimony related to the need for its proposed project. In addition, receiving testimony from the ISO concurrent with PG&E testimony would allow parties to fully understand the ISO's need determination. PG&E and the ISO may choose to prepare joint or separate testimony with respect to need issues.

The 280 Citizens Group asserts that a five-year planning horizon should be used, consistent with the planning horizon adopted in D.02-12-066 for the Valley-Rainbow interconnect project. However, it would be inappropriate to limit parties' showings on need to a five-year horizon. As the Commission stated in D.02-12-066, a five-year planning horizon "should not be mechanistically applied but rather requires the exercise of judgment, based on the facts of each project before us." Therefore, the issue of the appropriate planning horizon is within the scope of the proceeding. In its analysis of need, PG&E should use a planning horizon of at least five years and should justify its planning horizon if longer than five years.

As part of its showing on need, PG&E should clearly describe a current baseline for the Project Area with all current generation resources, including distributed generation, renewable generation, and contracts, and the import/export capability of each transmission facility in the Project Area. For each resource, PG&E should identify ownership, size, and any expected changes in the resource during the planning horizon. PG&E should provide recorded peak load within the Project Area during at least the last ten years (through 2003) and a description of all on-going energy efficiency and demand management programs that may affect demand.

Additionally, PG&E should identify all new generation resources that are approved or under consideration in the Project Area and all approved or planned additions to transmission capability. PG&E should specify the permitting status, expected timing, ownership, and size of each new generation resource and transmission addition identified. PG&E should address how new generation and transmission resources may affect the proposed project's import/export capability. PG&E should include scenario analyses assuming various levels of generation and transmission resources and energy efficiency programs, and should provide an assessment of the likelihood of each scenario coming to fruition.

As a component of its need showing, PG&E should provide load growth scenarios, including at least one load growth scenario that is lower than the August 2002 forecast or more current forecasts, and an assessment of the likelihood of each scenario. PG&E should describe and justify its criteria and assumptions utilized in forecasting demand.

PG&E should address the reason(s) the project is needed. PG&E should describe and justify any reliability requirements that drive the need for the Jefferson-Martin project as well as its import/export capability under various outage/reliability scenarios. PG&E should explain whether and, if so, to what extent, the project is needed for economic rather than reliability reasons, or to facilitate achievement of the renewable power goals established in § 399.11 et seq. PG&E should explain whether the project is needed, or would be used in any way, for export or other competitive purposes. PG&E should explain whether the project is necessary to meet its obligation to serve, and how PG&E will comply with § 625. PG&E should address the project's expected effect on economic development. PG&E should describe its plan of action, should the Jefferson-Martin project not be completed by September 2005.

The impact of this project and proposed alternatives on the transmission grid and other transmission users is a relevant factor in our decision whether to certificate the proposed project, and is within the scope of the proceeding.

Issues surrounding project economics, for example, project cost-effectiveness, cost estimates and tradeoffs for different routes or configurations, right-of-way acquisition costs, mitigation costs, adoption of a cost cap, and cost allocation, are within the scope. Any arguments that the Commission should not consider these issues in this proceeding can be made in briefs.

⁴ In its response to the protests, PG&E lists EMF concerns as a non-environmental issue. However, EMF issues are properly considered during the environmental review process. Parties may also address EMF issues, along with all other issues, during the evidentiary hearings.