4. Environmental Review

CEQA requires the Commission, as the designated lead agency, to assess the potential environmental impact of the Project. The objective is to avoid or mitigate adverse effects and to preserve, restore or enhance environmental quality. Rule 17.1 of the Commission's Rules requires the proponent of any such project to submit with its Application an environmental assessment, or PEA. The PEA is used by the Commission to focus on environmental impacts and to prepare an initial study to determine whether the project will need a Negative Declaration or an Environmental Impact Report.

MFNS was under the mistaken impression that the CPCN authority issued to it in 1998 allowed it to construct the Project without further CEQA review. When it realized this was not the case, it stopped work on the Project pending the outcome of the CEQA review we approve here.