UTILITY CONSUMERS' ACTION NETWORK PROTEST TO SDG&E’S APPLICATION FOR CPCN FOR THE SUNRISE POWERLINK PROJECT

Michael Shames, Esq.

On behalf of UCAN

3100 Fifth Ave. Suite B

San Diego, CA 92103

Phone: 619-696-6966

Fax: 619-696-7477

Email: mshames@ucan.org

January 11, 2006

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Pursuant to Article 12 of the the Commission’s Rules of Practice and Procedure, the Utility Consumers' Action Network submits its Protest to San Diego Gas & Electric Company’s (“SDG&E”) Application for a CPCN filed on December 14, 2005 but not calendared until December 18^th. In this application, SDG&E proposes (1) to postpone certain Certificate of Public Convenience and Necessity (“CPCN”) requirements for the above application, and (2) to set an expedited and bifurcated schedule for processing the application.

This protest, being submitted for filing on January 11, 2006, falls within the 30 days specified in Rule 44.1 and is, therefore, timely.

In its application, SDG&E proposes to split up the application of the Sunrise Powerlink into two parts, the first part consisting of a showing of need and a second part containing information that is route dependent. Specifically, the issues in question that SDG&E would like to retain until a later date are those in General Order 131-D sections IX-A-a-h, X-A and XI-A.

UCAN protests SDG&E's application on the following bases:

1. SDG&E’s application is not complete and should be rejected;

2. Its proposed schedule violates explicit Commission rules on the processing of CPCN applications;

3. SDG&E has not offered sufficient justification for the bifurcation;

4. The bifurcation request imposes unnecessary costs upon intervenors and great inefficiencies in the regulatory review of the proposed transmission line;

5. SDG&E's proposed processing of its application likely violates CEQA;

6. The expedited hearing schedule is unwarranted and unfair to intervenors; and

7. All hearings (including the prehearing conference) should be held in San Diego.

1. SDG&E’S REQUEST FOR PROCEDURAL BIFURCATION VIOLATES COMMISSION RULES AND STATE LAW.

SDG&E proposes to bifurcate this proceeding into two phases: one in which the Commission is asked to make a “Decision on Purpose and Need” for the proposed Sunrise Powerlink (Application,at p. 15) and a second in which the Commission will determine the route, design and environmental impacts of the Sunrise Powerlink.

SDG&E’s Proposed Schedule for the CPUC’s decision making process on pages 14-15 of the Application only includes dates for the first half of this bifurcated process. It predicates this schedule on the basis that it needs to conduct a “robust” public input process before establishing the route of the transmission line.

This assertion raises some significant and controversial factual issues. UCAN has monitored this so-called public input process and does not concur with SDG&E’s description of that process. But more importantly, there is no agreement with SDG&E’s contention that the transmission line must be operational by 2010. This asserted fact is highly controversial and is contradicted by SDG&E's filings in a number of other CPUC proceedings. UCAN refers the Commission to SDG&E's arguments in the Commission's review of the Otay Mesa PPA (Rulemaking 01-10-024) in which SDG&E represents that the vast majority of the power produced by the Otay plant will not be utilized until 2011. Absent a compelling showing by SDG&E that the Otay Mesa plant cannot be completed within the next six years, it cannot justify and expedited processing of the Sunrise Powerlink project.

Granting SDG&E’s proposed bifurcation is more than just a procedural change; it fundamentally changes the decision making structure for applications to the Commission established by California law and regulation. Such wholesale change is a violation of Commission rules.

The Commission rules are precise and give SDG&E no latitude for variance. Section IX.A.1.a-h of the Commission’s General Order No. 131-D specifies that applications for a CPCN shall provide eight categories of information to the Commission, such information including but not limited to detailed information related to routes, alternative routes, route maps, route justifications, proposed equipment, substations, switchyards, facility costs, construction schedules and environmental documentation. In addition, Commission Rule of Practice and Procedure 18 (“Commission Rule 18”) applicants “shall” provide nine categories of information, some of which are similar to the requirements of G.O. No. 131-D Section IX.

G.O. No. 131-D Section IX and Commission Rule 18, in turn, are regulatory embodiments of a variety of statutory provisions including, for example, Public Utilities Code Sections 399.25, 451, 1001, 1002, 1002.3, and 1003, as well as the California Environmental Quality Act (“CEQA”). These laws require that the Commission thoroughly consider the technical, economic and environmental aspects of a proposed electrical transmission line before deciding whether or not to issue a CPCN.

Notably, Section IX A begins by requiring a utility company (like SDG&E) to file for a Certificate of Public Convenience and Necessity (CPCN) “not less than 12 months prior to the date of a required decision by the Commission….” The GO continues to list ingredients that the CPCN must contain. Included in that list is “[a] PEA or equivalent information on the environmental impact of the project in accordance with the provisions of CEQA and this Commission’s Rule of Practice and Procedure, Rules 17.1 and 17.3.” GO 131 D IX A(1)(a)(h).

The objective of Commission Rule 17.1 is quite clear. The objective is to implement CEQA and to ensure that utility companies and the Commission weigh environmental issues equally alongside all other considerations. Commission Rule of Practice and Procedure, 17.1(b)(2). Moreover, the rule requires that the Commission assess as early as possible any environmental adverse effects that the project may have so that those may be avoided. Commission Rule of Practice and Procedure 17.1(b)(3).

Due to the objectives of Commission’s Rule 17.1 it appears as though the PEA or other environmental assessment must be included in the initial application of a CPCN. If the objective of the rule is to give equal weight to the environmental issues of a proposed transmission line then the Commission cannot have the environmental application issued secondarily, behind the rest of the application. Furthermore, if the Commission is to assess the environmental effects as early as possible, there ought to be no delay on that part of the application.

Additionally, the statute is phrased so that it includes all parts of the CPCN in order to form a complete application. Section IX A(1) is phrased that the application “shall also include…” parts a through h. From statutory construction, it would appear that inclusion of a-h is required for a complete application

The Commission is simply not given discretion as to whether it may determine need without offering project details. Instead, the detailed information requirements contained in these laws manifests an intention that a decision on project need be made in full consideration of clearly identified detailed information about a proposed project. The use of the word shall in the Commission rules and applicable statutory law is unequivocal.

In sum, and by SDG&E’s own admission, its CPCN application is incomplete and should be rejected. There is no legal basis for bifurcation between project need and project route, design and environmental details; therefore there can be no bifurcation in Commission decision making procedure on SDG&E’s Application.

2. SDG&E'S REQUEST CREATES UNNECESSARY WORK AND INJECTS INEFFICIENCIES INTO THE REGULATORY REVIEW OF THE SUNRISE POWERLINE.

Contrary to SDG&E’s position, the specific routing and design details of transmission lines determine many of the merits of a project and the merits in turn determine how successfully the project will address the public’s convenience and necessity. SDG&E has not offered – and UCAN cannot envision – a clear line between “purpose and need” and project design and routing, such that the Commission will likely be faced during SDG&E’s proposed first phase with frequent disputes about the scope of discovery, testimony and briefing.

In order to properly assess the need for the proposed transmission line, UCAN will need to know the precise routing and the costs for the line. It will also need to consider environmental impacts and mitigation as a basis for comparing the transmission line to other routes for a line, other configurations for a line or for comparison to non-transmission alternatives. UCAN’s consultants cannot properly assess alternatives when the true costs and detrimental impacts of the Sunrise powerline will not be known for another six months.

III. SDG&E DOESN’T ADEQUATELY JUSTIFY THE BASIS FOR ITS PROPOSED SCHEDULE.

In neither its application nor its concurrent motion does SDG&E adequately justify the legal or factual basis upon which this proceeding should be bifurcated. SDG&E's showing contains two notable omissions. Most notable is the surprising absence of any statutory or legal precedent supporting its proposal. As discussed above, this proposal raises a number of complex legal issues – SDG&E’s arguments are bereft of legal argument supporting its contention.

The second is the absence of any clearly described harm caused by adhering to the current CPCN rules. SDG&E's sole basis for its proposed bifurcation is an alleged need by 2010 for the powerline to be operational. As discussed above, this is a highly controversial factual assertion that is undermined by SDG&E’s assertions in other proceedings.

Finally, UCAN notes that in light of the recently adopted Domenici-Barton Energy Policy Act of 2005, the date in which SDG&E’s CPCN is deemed to be accepted by this Commission could trigger a schedule that, if violated, could allow FERC to preempt the Commission’s jurisdiction over this project. Given SDG&E’s own admission as to the incomplete nature of its application, the Commission needs to seriously consider the implications of the National Energy Act’s transmission provisions upon the processing of this application.

4. THE TIMING AND LOCATION OF HEARINGS

UCAN also protests SDG&E’s proposed schedule. As will be set forth in UCAN’s Prehearing Conference Statement, SDG&E’s proposed expedited schedule for the first phase of the proceeding will hamper any meaningful review of it by the affected communities. UCAN requests that any prehearing conference scheduled for this application be held in San Diego and that the Commission commit to holding any evidentiary hearings in San Diego as well.

IV. CONCLUSION

For the reasons stated above, UCAN respectfully requests that : (1) that the Commission order SDG&E to submit a complete application; (2) that the Commission deny a hearing on this matter until a complete application is submitted; and (3) in the event the Commission agrees to hold hearings, that the hearings be scheduled in a

manner that ensures adequate input by intervenors.

Respectfully Submitted, Dated: January 11, 2006

Michael Shames, Esq.

On behalf of UCAN

3100 Fifth Ave. Suite B

San Diego, CA 92103

Phone: 619-696-6966

Fax: 619-696-7477

Email: mshames@ucan.org

PROOF OF SERVICE

I, Laura Impastato, declare: I am employed in the City and County of San Diego, California. I am over the age of 18 years and am not a party to this action. No service list has been established in this proceeding. On January 11, 2006, I served the Protest of UCAN upon the utility and the assigned ALJ by sending a true and correct copy thereof, addressed as shown on the parties listed on the following page via e-mail. Pursuant to Rule 44.3, I have sent a copy of this protest via e-mail to each person the application lists used by Applicants as being authorized to receive service.

__________________________

Laura Impastato