II. Background

SDG&E submitted an application to this Commission under Pub. Util. Code § 851, seeking permission to sell property in a transmission corridor in the City of San Juan Capistrano. The prospective buyer is Whispering Hills, a developer that is building Whispering Hills Estates, a gated planned community of 155 single-family homes and a high school site. SDG&E owns a transmission corridor and transmission lines in the area of the planned development. The plan is for SDG&E to temporarily relocate its transmission lines, the developer would then grade and prepare a street in the general area of the current transmission lines, and the transmission lines would then be permanently relocated underground in the street.1 In its application, SDG&E proposes to sell its transmission corridor in the areas of the development to Whispering Hills, and to retain an easement for its utility facilities.

SDG&E's application, as filed, had two significant omissions. First, SDG&E did not include the Environmental Impact Report (EIR) prepared on the development project by the City of San Juan Capistrano. SDG&E mistakenly asserted that the EIR had been superseded by an Addendum to the EIR prepared by the Capistrano Unified School District. (See, Application, p. 10, fn. 6.)2 Second, SDG&E did not serve its application on anyone other than itself and Whispering Hills.

The assigned Administrative Law Judge (ALJ) issued a ruling requesting SDG&E provide the additional information needed for the Commission to review the application, and to more broadly serve the application.3 SDG&E subsequently provided the requested information and served its application on a broader service list. (See, Response of SDG&E to ALJ's Ruling Requesting Additional Information and Service, dated October 22, 2004.)

In response to the broader service required by the ALJ's Ruling, the Commission received four letters. Three of the letters were from individuals living in the area of the property that SDG&E proposed to sell, and raised issues regarding the value of the property.4 The fourth letter was from the Capistrano Unified School District, and expressed general support for SDG&E's application. The three letters from residents argued that the proposed sale price for the property was significantly too low. In order for the Commission to address and resolve the large discrepancy in the land values claimed by SDG&E and the letters from the local residents, the ALJ allowed SDG&E and the other parties an opportunity to respond to the allegations raised in the letters via comments.

Comments relating to the sale price of the property were received from SDG&E, Whispering Hills, the Commission's Office of Ratepayer Advocates (ORA), and local residents Anne Fox, Mark Nielsen, and Mike Mathewson. Because several parties (SDG&E, ORA, and Mr. Nielsen) expressed a desire to submit further information to the Commission, the ALJ allowed for a second round of comments. Reply comments were received from SDG&E, Whispering Hills, ORA, Mr. Nielsen, and Ms. Fox. Subsequently, SDG&E sought and was granted leave to submit a response to ORA's reply comments.

1 SDG&E requested Commission approval of the temporary and permanent relocation of the lines in Advice Letter 1566-E, filed February 17, 2004, and approved on April 1, 2004. 2 The application was also unclear whether SDG&E believed that Commission approval of the project was exempt from review under the California Environmental Quality Act (CEQA), or whether SDG&E believed that the Commission was to act as a responsible agency under CEQA. 3 Administrative Law Judge's Ruling Requesting Additional Information and Service, dated October 14, 2004. The Ruling also identified potential problems with the process used by SDG&E in preparing and submitting its application, and required SDG&E to maintain certain records relating to the application. 4 These three letters were from Anne Fox, Mike Mathewson, and Susan Palazzo.

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