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Utility Consumers' Action Network v. Public Utilities Commission of the State of California

August 17, 2010

UTILITY CONSUMERS' ACTION NETWORK, PETITIONER,
v.
PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA, RESPONDENT;
SAN DIEGO GAS AND ELECTRIC COMPANY, REAL PARTY IN INTEREST.



Petition for writ of review after the Public Utilities Commission approved a certificate of public convenience and necessity. Petition denied.

The opinion of the court was delivered by: McINTYRE, J.

CERTIFIED FOR PUBLICATION

In this proceeding, we consider the petition for writ of review filed by the Utility Consumers' Action Network (UCAN) challenging Public Utilities Commission of the State of California (Commission) Decision Nos. 08-12-058 and 09-07-024 which granted San Diego Gas and Electric Company's (SDG&E) application for a certificate of public convenience and necessity (CPCN) to construct the Sunrise Powerlink Transmission Project (Sunrise). (Pub. Util. Code, §§ 1001 & 1757; undesignated statutory references are to the Public Utilities Code.) UCAN does not dispute the sufficiency of the evidence to support the Commission's findings. Instead, it argues that the Commission applied the wrong burden of proof, improperly relied on "extra-evidentiary material facts" to support its findings, and failed to assess cost-effective alternatives as required under section 1002.3. We find no merit in UCAN's arguments and deny the petition.

FACTUAL AND PROCEDURAL BACKGROUND

We begin by reminding the parties that this original proceeding is governed by the appellate rules. (Cal. Rules of Court, rule 8.4.) California Rules of Court, rule 8.204(a)(1)(C), which applies to writ proceedings (Cal. Rules of Court, rules 8.4, 8.486(a)(6)), requires that the parties' briefs "[s]upport any reference to a matter in the record by a citation to the volume and page number of the record where the matter appears. . . ." Here, the parties omitted citations to the record or incorrectly cited numerous documents, or, when stating a single fact, cited an entire, sometimes lengthy, document. We are not required to independently search this extensive record to verify the factual or procedural points cited by the parties. (9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 695, pp. 764-765.) Because all parties failed to comply with California Rules of Court, rule 8.204(a)(1)(C), we take most of the factual and procedural background from the Commission's two decisions. (See Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 990 [rather than striking appellant's brief for violation of the rule requiring citations to the record, the reviewing court simply declined to consider the portions of the statement of facts that failed to comply].) We shall refer to the Commission's December 2008 Decision No. 08-12-058 granting SDG&E's application as the "Decision" and its July 2009 Decision No. 09-07-024 modifying the Decision as "Modified Decision."

In December 2005, SDG&E applied for a CPCN authorizing construction of Sunrise. Due to deficiencies in the 2005 application, SDG&E filed an amended application in August 2006 which the Commission treated as a new proceeding. SDG&E's original plans for Sunrise (the Proposed Project) included new 500/230 kilovolt (kV) transmission lines running approximately 150 miles between the Imperial Valley substation and the western portion of SDG&E's San Diego service area, a new substation in central San Diego County, and other system upgrades and modifications. A 25-mile portion of the proposed 500 kV line crossed Anza-Borrego Desert State Park. SDG&E stated in its 2006 application that Sunrise was needed by 2010 to meet the grid reliability requirements of the California Independent System Operator (CAISO), to enable SDG&E to meet its 2010 renewable energy targets, and to mitigate energy costs.

The Commission's evaluation of the Proposed Project followed two parallel tracks: (1) the CPCN track which focused on economics; and (2) the environmental track which assessed impacts as required by the California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21100 et seq.) and the National Environmental Policy Act (NEPA) (42 U.S.C. § 4321 et seq.). The Final Environmental Impact Report (FEIR) made no recommendation regarding the approval or denial of the Proposed Project, but its contents provided information used by the Commission in deciding whether to issue the CPCN. Public Resources Code section 21168.6 gives the Supreme Court exclusive jurisdiction over challenges to the Commission's approval of the FEIR. The Supreme Court is holding that challenge in abeyance pending our resolution of the non-environmental issues. (Utility Consumers' Action Network v. California Public Utilities Com. (order filed Dec. 17, 2009, S175532) 2009 Cal. LEXIS 13058.)

The CPCN proceedings under section 1001 considered whether SDG&E established a need for the Proposed Project or for an alternative evaluated in those proceedings. The CPCN proceedings were devoted to quantifying the benefits claimed by SDG&E to determine whether the Proposed Project could meet the goals of reliability, use of renewable energy, and reduced cost more economically than other alternatives. For this purpose, the Commission adopted a slightly modified version of CAISO's modeling approach, based on numerous assumptions described in the Decision as forming the Analytical Baseline.

In 2006, the Legislature adopted Assembly Bill 32, which requires California to reduce its green house gas (GHG) emissions to 1990 levels by 2020. (Health & Saf. Code § 38550, including Historical and Statutory Notes, 41B West's Ann. Health & Saf. Code (2010 supp.) foll. § 38550, p. 13.) The Commission adopted policies and rules designed to achieve these goals in the energy sector, including the recommendation that the electricity sector achieve renewable procurement at 33 percent renewable portfolio standard (RPS) by 2020. The California Air Resources Board (CARB) was tasked with implementing those rules. Models used in the CPCN proceedings reflected California's GHG policy goals.

On the CEQA/NEPA track, the Commission as lead agency performed detailed analysis of 27 alternatives to the Proposed Project, including the No Project Alternative. The alternatives offered both generation-based and transmission-based plans, and both minor adjustments and major route changes. The No Project Alternative included as possibilities the All-Source Generation Alternative, the In-Area Renewable Generation Alternative, and the Lake Elsinore Advanced Pump Storage (LEAPS) Transmission-Only Alternative. Together with the United States Bureau of Land Management (BLM), the Commission prepared an 11,000-page FEIR. The FEIR ranked the Proposed Project and various alternatives in terms of environmental superiority in the following order: (1) All-Source Generation Alternative; (2) In-Area Renewable Generation Alternative; (3) LEAPS Transmission-Only Alternative; and (4) Final Environmentally Superior Southern Route Alternative. The last alternative was the only choice among the top four that included transmission lines providing direct access to new renewable resources in Imperial County. It ranked the Proposed Project and other alternative routes through portions of Anza-Borrego Desert State Park below the first four because of their unmitigable impacts on that environmentally sensitive region.

The Commission represents that the assigned administrative law judge and at least two members of the Commission issued alternate proposed decisions, and that four of the five commissioners ultimately adopted the Decision at issue here. The Commission found the first three environmentally superior alternatives "infeasible" because they failed to meet California's broader policy goals of facilitating renewable energy development and reducing GHG emissions in the energy sector. In December 2008, it granted SDG&E's CPCN request for the routing alternative identified in the FEIR as the Final Environmentally Superior Southern Route and certified the FEIR. The Commission also analyzed the cost of the Final Environmentally Superior Southern Route in comparison to the alternatives, concluding:

"Assuming renewable procurement at the level of 33% Renewable Portfolio Standard (RPS), we estimate that the Final Environmentally Superior Southern Route will generate net benefits of over $115 million per year, and we find that it is the second highest ranked Alternative that will facilitate our policy to achieve greenhouse gas (GHG) reductions through renewable procurement at 33% RPS levels in the shortest time possible." (Fns. omitted.)

UCAN filed an application for rehearing listing 18 "appealable deficiencies" in the Commission's Decision. The Commission denied rehearing but filed the Modified Decision which corrected or clarified parts of the original Decision. Among other things, the Modified Decision altered the Commission's calculation of the capital cost of the All-Source Generation Alternative. UCAN filed a timely petition for writ of review in August 2009. In December 2009, before filing its answer to UCAN's petition, the Commission acted on its own motion to correct "inadvertent calculation errors" in the Decision and Modified Decision, including an error relating to the capital cost of the All-Source Generation Alternative.

DISCUSSION

I. Governing Law

The Commission is charged with ensuring that public utilities "furnish and maintain such adequate, efficient, just, and reasonable service, instrumentalities, equipment, and facilities . . . as are necessary to promote the safety, health, comfort, and convenience of its patrons, employees, and the public." (§ 451.) Thus, no electrical corporation may begin construction or extension of lines "without having first obtained from the commission a certificate that the present or future public convenience and necessity require or will require such construction." (§ 1001.) In granting the CPCN pursuant to section 1001, the Commission "shall give consideration to the following factors:

"(1) Community values.

"(2) Recreational and park areas.

"(3) Historical and aesthetic values.

"(4) Influence on environment . . . ." (§ 1002.)

In addition, when considering an application for an electric transmission facility, "the commission shall consider cost-effective alternatives to transmission facilities that meet the need for an efficient, reliable, and affordable supply of electricity, including, but not limited to, demand-side alternatives such as targeted energy efficiency, ultraclean distributed generation, as defined in Section 353.2, and other demand reduction resources." (§ 1002.3.) The electric corporation's application for a CPCN "shall include . . . [a] cost analysis comparing the project with any feasible alternative sources of power. The corporation shall demonstrate the financial impact of the plant, line, or extension construction on the corporation's ratepayers, stockholders, and on the cost of the corporation's borrowed capital. . . ." (§ 1003, subd (d).)

A party seeking judicial review of a Commission's decision must first file an application for rehearing. (§ 1756, subd. (a).) "The application for a rehearing shall set forth specifically the ground or grounds on which the applicant considers the decision or order to be unlawful. No corporation or person shall in any court urge or rely on any ground not so set forth in the application." (§ 1732.) In other words, the petitioner may not raise in court a matter not included in its application for rehearing. (See, e.g., Southern California Edison Co. v. Public Utilities Com. (2000) 85 Cal.App.4th 1086, 1101, fn. 7.)

Section 1757 governs our examination of cases properly before this court on petition for writ of review. (§ 1757, subd. (a); see Southern Cal. Edison Co. v. Public Utilities Com. (2005) 128 Cal.App.4th 1, 9.) "[R]review by the court shall not extend further than to determine, on ...


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