15. Assignment of Proceeding

Michael Peevey is the Assigned Commissioner and Glen Walker is the assigned Administrative Law Judge in this proceeding.

Comments on Alternate Draft Decision

The alternate draft decision of assigned Commissioner Wood was mailed to the parties in accordance with Pub. Util. Code § 311(g) and Rule 77.7 of the Rules of Practice and Procedure. Comments were received on _________. Reply comments were received on _________.

Findings of Fact

1. Applicant is a public utility pipeline corporation subject to the jurisdiction of this Commission.

2. Applicant seeks authorizations to operate a common carrier jet fuel pipeline to serve airlines at Sacramento International Airport.

3. The County of Sacramento has acted as the lead agency under CEQA and the Commission has acted as a responsible agency in reviewing the proposed pipeline project.

4. The Sacramento International Airport Jet Fuel Pipeline and Tank Farm project FEIR was prepared pursuant to CEQA and is adequate for this Commission's decision-making purposes.

5. The Commission has considered the Sacramento International Airport Jet Fuel Pipeline and Tank Farm project FEIR in its decision-making process in accordance with the CEQA Guidelines § 15096(f).

6. The project objectives were to potentially lower jet fuel prices at the Sacramento Airport; decrease air pollution; increase safety; decrease energy consumption; decrease oil spill related damage; and decrease traffic congestion.

7. Through the analysis of the alternatives, it was determined that the proposed alignment was the environmentally superior alternative that met the stated project objectives.

8. The Commission finds that the proposed alignment for the project will allow the project to meet all of the stated project objectives.

9. The Final EIR found that no significant impacts will occur with respect to population and housing.

10. The project will result in significant environmental effects with respect to the following issues or resources that can be reduced to less than significant levels and/or avoided with the implementation of mitigation measures: Land Use; Agricultural Resources; Open Space; Aesthetics; Airports; Public Facilities and Services; Transportation and Circulation; Hydrology and Water Quality; Geology and Soils; Cultural Resources; Hazardous materials/Risk Assessment; and Biological Resources.

11. Pursuant to § 15096(g) of the CEQA Guidelines, the Commission should adopt the mitigation measures identified in the Sacramento International Airport Jet Fuel Pipeline and Tank Farm project FEIR, including mitigation measures 4.4.1a-e for air quality impacts and mitigation measures 4.5.1a-b for construction-related noise impacts.

12. Pursuant to § 15091 of the CEQA Guidelines, the project will result in an environmental effect for noise impacts that is considered significant and unavoidable. While mitigation measures for construction related noise impacts would substantially lessen the impacts, the measures will not reduce construction related noise impacts to a less than significant level.

13. Pursuant to § 15091 of the CEQA Guidelines, the project will result in an environmental effect for air quality impacts that is considered significant and unavoidable. While mitigation measures for air quality impacts would substantially lessen the impacts, the measures will not reduce air quality impacts to a less than significant level.

14. Pursuant to §§ 15093 and 15096(h) of the CEQA Guidelines, there is substantial evidence in the record to determine that the benefits of the project outweigh the adverse impacts and that the project should be approved pursuant to the Statement of Overriding Considerations.

15. Applicant proposes to realign it membership structure, capital contributions and indebtedness.

16. Because of the nature of this pipeline operation, applicant seeks authority to negotiate market-based rates.

17. Wickland has failed to make a sufficient showing to support its request for market-based rates.

Conclusions of Law

1. Applicant's request for exemptions under Pub. Util. Code §§ 829 and 853(a) should be denied.

2. Applicant's request for authorization of its proposed membership structure, capital contributions and indebtedness appear to be commercially reasonable and should be approved.

3. Applicant is exempt from the Commission's Competitive Bidding Rule under Resolution F-616.

4. Applicant's request for authority to employ market-based rates should be denied without.

5. Applicant's request for waiver of G.O. 96-A, Sections III, IV, V, VI, VII and IX should be granted to the extent that those provisions are inapplicable to a market-based rate or FERC-style tariff schedule format.

6. The Sacramento International Airport Jet Fuel Pipeline and Tank Farm project FEIR was prepared pursuant to CEQA and is adequate for this Commission's decision-making purposes.

7. The Commission has considered the Sacramento International Airport Jet Fuel Pipeline and Tank Farm project FEIR in its decision-making process in accordance with the CEQA Guidelines § 15096(f).

8. Pursuant to § 15096(g) of the CEQA Guidelines, the Commission should adopt the mitigation measures identified in the Sacramento International Airport Jet Fuel Pipeline and Tank Farm project FEIR, including mitigation measures 4.4.1a-e for air quality impacts and mitigation measures 4.5.1a-b for construction-related noise impacts.

9. Pursuant to §§ 15093 and 15096(h) of the CEQA Guidelines, there is substantial evidence in the record to determine that the benefits of the project outweigh the adverse impacts and that the project should be approved pursuant to the Statement of Overriding Considerations.

ORDER

IT IS ORDERED that:

1. Wickland Pipelines LLC (applicant) is authorized to restructure its membership and to require additional membership capital contributions in a total amount not to exceed $7,381,000 for funding of the project costs through construction, as more fully set forth in the application.

2. Applicant is authorized to issue unsecured or secured promissory notes, in lieu of corresponding amounts of membership capital contributions, in a total amount not to exceed $5,368,000, as more fully set forth in the application.

3. Applicant is authorized to develop rates and terms of service determined through arm's-length negotiations with its shippers, as more fully set forth in the application.

4. Sections IX and X of General Order (G.O.) 96-A, are waived to the extent those provisions require utility contracts be made expressly subject to modification by the Commission.

5. The final Environmental Impact Report certified by the Sacramento County Board of Supervisors, is approved.

6. The mitigation measures outlined in the Sacramento International Airport Jet Fuel Pipeline and Tank Farm project FEIR and adopted by the Sacramento County Board of Supervisors are hereby made conditions of project approval by this Commission Order.

7. Before commencing service to customers, if the Commission has not approved market-based rates, applicant shall file with this Commission an application for the approval of cost-based rates.

8. Applicant's request for exemption from Pub. Util. Code §§ 818, 851 and 854 is denied.

9. Since all issues raised in this proceeding have been addressed, the proceeding in Application 99-08-050, as amended on May 20, 2002, is closed, although Wickland may reopen this proceeding by making a supplemental showing on issues related to market-based rates.

This order is effective today.

Dated _______________________, at San Francisco, California.

CERTIFICATE OF SERVICE

attached ALTERNATE DRAFT DECISION OF COMMISSIONER WOOD as on all parties of record in this proceeding or their attorneys of record.

N O T I C E

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