DGX/SAW/tbo/dhn 11/1/2006

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of San Diego Gas
& Electric Company (U 902 E) for a Certificate of
Public Convenience and Necessity for the Sunrise
Powerlink Transmission Project.

Application 06-08-010
(Filed August 4, 2006)
Application 05-12-014
(Filed December 14, 2005)

ASSIGNED COMMISSIONER AND ADMINISTRATIVE LAW JUDGE’S
SCOPING MEMO AND RULING

Overview

This ruling, which follows a prehearing conference (PHC) held on
September 13, 2006 in Ramona, California, affirms the preliminary categorization
of this proceeding as “ratesetting,” sets forth the scope and procedural schedule
for the proceeding pursuant to the requirements of Section 1701.1,1 with a final
decision projected for January 2008, orders the applicant, San Diego Gas &
Electric Company (SDG&E) and the California Independent System Operator
Corporation (CAISO) 2 to submit supplemental testimony and exhibits, and
assigns Administrative Law Judge (ALJ) Steven Weissman as the principal
hearing officer. It also addresses discovery, service, and other procedural issues
for the proceeding. Parties can appeal this ruling only as to category of this
proceeding under the procedures in Rule 7.6.3

We reiterate here our objectives for this proceeding which the Assigned
Commissioner articulated at the September 13, 2006 PHC: (1) that we conduct a
proceeding that meets all legal requirements; (2) that we have a process that
incorporates public input, and where there are issues of concern, we understand
what those concerns are; and (3) that we be rigorous about keeping to our
schedule to issue a timely decision.

In finalizing this ruling and in delineating the scope of this proceeding, we
have considered SDG&E’s application and the numerous written responses and
PHC statements, oral statements at each of the two PHCs, and letters and
e-mails4 concerning the project. We have also considered the protests filed by the
West Chase Homeowners Association; Conservation Groups (the Center For
Biological Diversity and the Sierra Club, San Diego Chapter); the Mussey Grade
Road Alliance; the Carmel Country Highland Owners; the Division of Ratepayer
Advocates (DRA); the California State Parks Foundation; the Starlight Mountain
Estates Owners; the Community Alliance For Sensible Energy; Ratepayers For
Affordable Clean Energy Coalition; the Nevada Hydro Company; the Ramona
Alliance Against Sunrise Powerlink; the Imperial Irrigation District; the Cities Of
Hemet, Murrieta And Temecula; and the Utility Consumers' Action Network
(UCAN).

In summary, SDG&E seeks a Certificate of Public Convenience and
Necessity (CPCN) authorizing the construction of what it calls the “Sunrise
Powerlink Project.”5 The proposal is of great significance because of the
importance of adequate transmission infrastructure to California’s energy future
and the sensitive environmental setting of the potential project. The proposed
project would cost approximately $1.265 billion and would stretch
approximately 150 miles from the El Centro area of Imperial County to
northwestern San Diego County. It would include the construction of three new
transmission lines and the reconducturing of several others, as well as the
construction of a new substation and the modification of several others. A
technical description of the project is attached as Appendix A to this ruling.6
The proposed project has many advocates, including the CAISO and the
California Energy Commission (CEC). Supporters believe that the project is
necessary, among other things, to ensure the reliability of California’s
transmission system, to bring renewable energy to California consumers, and/or
to bring lower cost electricity to California consumers. However, the project, as
proposed, also faces opposition from a wide variety of entities, including
environmental groups, consumer groups, and several of the communities
potentially affected by the proposed project or its alternative routes. Among
other things, SDG&E has proposed that over 20 miles of the Sunrise Powerlink
Project be sited through Anza-Borrego Desert State Park (Anza-Borrego), and
this raises environmental concerns for many parties. Parties also question the
need for and timing of the proposed project; raise additional concerns related to
biological, ecological, cultural, recreational and visual impacts, construction
impacts, property values, community values, and exposure to electric and
magnetic fields (EMFs); and ask for consideration of alternatives, such as
undergrounding parts of the proposed project, locating various transmission
towers in places other than those proposed by SDG&E, or relying on nontransmission
alternatives. As set forth below in more detail, these issues are
within the scope of this proceeding.

We have taken two important steps prior to issuing this scoping memo
and ruling. First, because SDG&E’s application only proposes routes through
Anza-Borrego, at the September 13, 2006 PHC and through a subsequent ruling,
we directed SDG&E to report on and rank routes that it explored outside of the
park. On October 2, 2006, SDG&E distributed further analysis, describing four
routes that would not cross Anza-Borrego and ranking one of those as most
worthy of further study.7 Second, in a ruling dated September 21, 2006, the ALJ
directed SDG&E to schedule a workshop in early October to clarify project
modeling assumptions and alternative studies. SDG&E held the workshop on
October 13, 2006 and the parties will file a workshop report by November 8,
2006. We expect the results of both of these efforts, as well as the testimony that
we order here, to inform this proceeding.