Scope of Fall Hearings

Further evidentiary hearings will be held from October 29 through November 9, 2001 in San Francisco. Based on the discussion at the PHC, I ruled that the purpose of the hearings will be to evaluate the net economic benefits (benefits minus costs) to ratepayers of relieving two potential in-state transmission constraints in Southern California. We will look at alternatives to address potential congestion (1) west of Miguel and (2) at the Imperial Valley substation. The utilities and interested parties should present testimony on the potential for generation projects coming on line that would trigger constraints or congestion in these areas, the costs of alternatives to relieve the constraints as well as the allocation of benefits between ratepayers and project developers. The Commission will use the results of this record to determine whether SDG&E should, for example, submit a CPCN to request construction of the Mission-Miguel upgrade based on economic viability, or take other steps needed to move forward with these projects.

At my direction, SCE and Ridgetop discussed ways to obtain more information on developer interest and project costs for upgrades to the Antelope-Bailey line in the Techachapi area. They agreed to develop a letter to potential developers requesting an expression of interest in participating in the transmission line upgrade, with some rough cost estimates to be included in the letter. ¹¹ Ridgetop and SCE agreed to bring this information back to the Commission by the next PHC, which I plan to hold in December, 2001. I directed SCE and Ridgetop to also look at the allocation of benefits of a line upgrade to developers, as well as ratepayers. In particular, I noted that there would be monetary benefits to current developers because the curtailment clauses in their contracts would no longer be invoked. ¹²

For the Jefferson-Martin (San Francisco-Peninsula) and Greater Bay Area projects, I directed PG&E to present monthly updates in their status reports in this proceeding, so that the Commission and interested parties may monitor the steps that PG&E is taking to address these constrained areas. PG&E should plan to present an up-to-date status report at the December PHC.

I also directed the ISO to file its first phase report on Path 26 when it is published in October. The report should be filed at the Commission's Docket Office with a notice of availability sent to all appearances and the state service list in this proceeding. The ISO should also report on the status of the second phase of this study at our next PHC.

As I stated at the PHC, I do not consider the reconductoring of line 649 to be a priority for this proceeding. Given the status of planned upgrades to address Path 45 limitations and congestion West of Pittsburg, those two projects will also not be considered further in this proceeding. However, the utilities should report on the status of any plans to upgrade Path 45 beyond 800 MW at the next PHC. We may consider an economic evaluation of those plans during a later phase of the proceeding, if ratepayer funding is involved.

Finally, as discussed at the PHC, Energy Division staff will be involved in this phase of the proceeding, as they were during summer hearings, and should be accorded the utmost respect and responsiveness from all the parties. The utilities should involve Energy Division during the development of their direct testimony, particularly with regard to the methodology and assumptions used for assessing economic benefits.