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 Application No. 06-08-010
Certificate of Public Convenience and Necessity (Filed August 4, 2006)
for the Sunrise Powerlink Transmission Project

COMMENTS OF SAN DIEGO GAS & ELECTRIC COMPANY ON

ADMINISTRATIVE LAW JUDGE VIETH’S PROPOSED DECISION

E. Gregory Barnes
James F. Walsh
SAN DIEGO GAS & ELECTRIC COMPANY
101 Ash Street
San Diego, CA 92101
Telephone: 619/699-5019
Facsimile: 619/699-5027
E-mail: gbarnes@sempra.com

Attorneys for Applicant

SAN DIEGO GAS & ELECTRIC COMPANY

November 20, 2008

 TABLE OF CONTENTS
Page

SUBJECT INDEX .......................................................................................................................... ii

TABLE OF AUTHORITIES ......................................................................................................... iv

LIST OF ACRONMYNS/RECORD CITATION FORM...............................................................v

COMMENTS ON PROPOSED DECISION ...................................................................................1

APPENDIX

i
 SUBJECT INDEX
(Rule 14.3(b))

I. INTRODUCTION .................................................................................................................... 1

II. THE PD’S IN-AREA GENERATION ASSUMPTIONS ARE LEGALLY

AND FACTUALLY ERRORONEOUS................................................................................... 3

A. The PD’s arbitrary and capricious assumptions about future in-area

conventional generation contradict the Valley Rainbow and Jefferson-
Martin decisions and the most recent LTPP decision......................................................... 3

B. The PD’s arbitrary and capricious assumptions about future in-area

renewable generation contradict the Valley Rainbow and Jefferson-Martin
decisions.............................................................................................................................. 6

C. The PD errs in its treatment of the existing South Bay Power Plant by
ignoring state policy and the viability and costs of continued operation of
this plant.............................................................................................................................. 7

D. SDG&E’s recently-adopted LTPP confirms a 2010 reliability need for

Sunrise................................................................................................................................. 8

E. The PD makes erroneous assumptions regarding the penetration rate and

costs of solar PV ................................................................................................................. 8

III. THE PD’S RPS ASSUMPTIONS ARE LEGALLY AND FACTUALLY

ERRORONEOUS................................................................................................................. 11

A. The PD errs by relying on the CAISO’s renewable supply curve which

does not reflect SDG&E’s experience with renewable RFOs .......................................... 11

B. The PD’s conclusion that for purposes of evaluating the cost-effectiveness

of Sunrise, renewable procurement will not exceed 20% over the entire
period between 2010 and 2058 is meaningless and inconsistent with the
objectives of AB-32 and D.08-03-018.............................................................................. 14

IV. THE PD COMMITS LEGAL AND FACTUAL ERRORS BY FINDING

THAT ALTERNATIVES OTHER THAN SUNRISE WILL MEET
SDG&E’S RELIABILITY NEEDS MORE ECONOMICALLY........................................ 15

A. The PD ignores the weight of the evidence by relying on the “updated”

compliance exhibit ............................................................................................................ 15

B. It would violate due process to rely on the PD’s compliance exhibit

“Update.” .......................................................................................................................... 17

ii
V. THE PD ERRS BY IGNORING THE EVIDENTIARY RECORD
ESTABLISHING THAT SIGNIFICANT GHG EMISSION REDUCTIONS
WILL RESULT FROM SUNRISE ........................................................................................ 18

A. Sunrise will facilitate the development and interconnection of renewable

power plants in Imperial Valley, which will reduce GHG emissions by
displacing fossil-fueled generation ................................................................................... 18

B. SDG&E will have sufficient renewables under contract to reduce GHG

emissions with Sunrise...................................................................................................... 19

C. The PD fails to acknowledge that Sunrise is far superior from a GHG

perspective compared to the all-source generation alternative ......................................... 21

VI. THE PD ERRS BY FINDING THAT P.U. CODE § 399.25 DOES NOT
SUPPORT ISSUING A CPCN FOR SUNRISE NOW ....................................................... 21

VII. SDG&E PROPOSES FINDINGS OF FACT TO THE PD THAT ADOPT A

COST CAP ........................................................................................................................... 22

VIII.THE PD ERRS IN ORDERING SDG&E TO PURSUE TWO

COLLATERAL PROJECTS THAT DO NOT ADVANCE SUNRISE
OBJECTIVES....................................................................................................................... 22

A. UCAN’s proposed Miguel substation modifications do nothing for project

objectives .......................................................................................................................... 22

B. The record demonstrates that UCAN’s Path 44 rating increase is neither

feasible nor cost-effective. ................................................................................................ 23

iii
 TABLE OF AUTHORITIES

STATUTES & LEGISLATION

Cal. Pub. Util. Code § 399.25 (2008) ........................................................................................2, 21

Assembly Bill 32, Ch. 488, Stats. 2005-2006 (Cal. 2006).............................................................14

Executive Order S-14-08 (Cal. Nov. 17, 2008) .............................................................................14

CALIFORNIA PUBLIC UTILITIES COMMISSION DECISIONS

Greenhouse Gas OIR, D.08-03-018...............................................................................................14

Long Term Procurement Plan Decision, D.07-12-052.......................................................... passim

Economic Methodology Decision, D.06-11-018..............................................................................2

Resource Planning OIR, D.04-12-048...........................................................................................12

In re Jefferson-Martin, D.04-08-046 ..................................................................................... passim

In re Valley Rainbow, D.02-12-066....................................................................................... passim

OTHER AUTHORITIES

Cal. Pub. Util. Comm. Rule of Practice and Procedure 14.3...........................................................1

Energy Division Resolution E-4189 (September 4, 2008) ..............................................................8

Energy Division Resolution E-4150 (April 10, 2008) ...................................................................13

Energy Division Resolution E-4070 (April 12, 2007) ...................................................................13

Energy Division Resolution E-4073 (March 15, 2007) .................................................................13

Energy Division Resolution E-4081 (May 24, 2007) ....................................................................13

iv
 LIST OF COMMONLY USED ACRONYMS/ABBREVIATIONS

AB Assembly Bill
AD Alternate Decision
ALJ Administrative Law Judge
BLM Bureau of Land Management
CCGT Combined Cycle Gas Turbine
CEC California Energy Commission
CO2 Carbon Dioxide
CPCN Certificate of Public Convenience and Necessity
CPUC California Public Utilities Commission
CREZs California Renewable Energy Zones
CT Combustion Turbine
FEIR Final Environmental Impact Report/Environmental Impact Statement
GHG Green House Gas
GWH Gigawatt Hour
IE Independent Evaluator
kV Kilovolt
LCBF Least Cost Best Fit
LTPP Long-term Procurement Plan
MW Megawatt
OIR Order Instituting Rulemaking
O&M Operation and Maintenance
PD Proposed Decision
PPA Power Purchase Agreement
PRG Procurement Review Group
P.U. Code California Public Utilities Code
PV Photovoltaic
RETI California Renewable Energy Transmission Initiative
RFO Request for Offers
RFP Request for Proposals
SBRP South Bay Replacement Project
SDCPP San Diego Community Power Project

RECORD CITATION FORM

Record exhibits are cited “[witness surname, if applicable], Ex. [number] at

[chapter. page(s):line(s) [to the extent applicable].” The record transcript is cited “[witness
surname, if applicable], T.[page(s):line(s)].” Where a citation appears in a heading or at the end
of a paragraph, the citation is to evidence or authority for the entire section or paragraph.

v
 SHORT FORM PARTY DESIGNATIONS

CAISO California Independent System Operator

CBD Center for Biological Diversity
Conservation Groups CBD and the San Diego Chapter of the Sierra Club
DRA Division of Ratepayer Advocates
IID Imperial Irrigation District
MGRA Mussey Grade Road Alliance
Powers Mr. Bill Powers
RPCC Rancho Peñasquitos Concerned Citizens
SDG&E San Diego Gas & Electric Company
State Parks California State Parks Foundation
TNHC The Nevada Hydro Company
UCAN Utility Consumers’ Action Network

vi
 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 Application No. 06-08-010
Certificate of Public Convenience and Necessity (Filed August 4, 2006)
for the Sunrise Powerlink Transmission Project

COMMENTS OF SAN DIEGO GAS & ELECTRIC COMPANY ON

ADMINISTRATIVE LAW JUDGE VIETH’S PROPOSED DECISION

Pursuant to Rule 14.3 of the Commission’s Rules of Practice and Procedure, applicant
San Diego Gas & Electric Company (“SDG&E”) submits these comments on the Proposed
Decision of Administrative Law Judge Vieth (“PD”).

I. INTRODUCTION

The Commission should reject the PD on grounds that it is riddled with material factual,
legal and technical errors. The major items compelling rejection of the PD are:
• The PD commits legal error by its arbitrary and capricious use of transmission
planning standards involving assumptions about future conventional and renewable
in-area generation at odds with CAISO guidelines and the Commission’s Valley
Rainbow and Jefferson-Martin decisions.
• This legal error results in the PD adopting in-area resource assumptions that lead to
its conclusion that Sunrise is not needed for reliability until 2014. Correcting these
assumptions demonstrates that Sunrise is needed under a wide range planning
assumptions for reliability needs by 2010.
• The PD’s RPS-related assumptions ignores unrebutted testimony that the CAISO’s
renewable resource supply curve utilized by the PD in its economic evaluation bears
no relationship to the results of SDG&E’s request for offers (“RFO”) beginning in
2004 showing that it has received far more bids and entered into more contracts at
competitive prices and in amounts from the Imperial Valley area1 than from the San
Diego area and areas to the north of SONGS.

1
The “Imperial Valley area” means the area east of the Miguel substation (including east San Diego
County where renewables seek to interconnect to the South West Power Link) to the Imperial Valley
Substation, Northern Baja, and the Imperial Valley in which areas Sunrise facilitates the development
of renewables by addressing the CAISO’s existing 1150 MW dispatch limit. Allen, Ex. SD-35 at 6.28.
 • The PD commits legal error by relying on an “Update” of the compliance exhibit
submitted at the end of the proceeding for its finding that Sunrise is not economic.
The Update includes assumptions never provided to the parties, is (according to the
PD) based on additional modeling performed after the record closed, and was never
subjected to discovery, cross-examination or briefing by the parties.
• The PD’s assumption that the cost of new combustion turbine costs used in Phase 1 is
unreasonable and factually incorrect in that it does not reflect the updated cost of CTs
reflected in the Phase 2 record.
• The PD errs by finding that P.U. CODE § 399.25 does not support issuing a CPCN for
Sunrise now.
• The PD errs by ordering SDG&E to support two projects unrelated to Sunrise, in spite
of a record showing that the projects offer no benefits.

By focusing on these major errors, SDG&E does not concede the accuracy of the PD in other
regards. Time and space limitations do not permit us to address all of the errors and
misstatements in the PD.2
In sum, by manipulating the assumptions that underlie the analysis, the PD concludes that
SDG&E does not have a reliability need within five years that would be satisfied by Sunrise.
This contrived modeling also concludes that the clear GHG and RPs benefits of facilitating
development of Imperial Valley renewables can be easily replaced by new local generation,
including new conventional power in spite of the record that such in-basin siting is extremely
difficult. The PD also skews its analysis by attributing construction and operational GHG
emissions to Sunrise, but not attributing such emissions to alternatives – including, most
absurdly – local generation.3

It has been generally understood in discourse in this proceeding that references to renewable
development in the Imperial Valley includes these nearby areas in Mexico and San Diego County.
2
Rather than repeating verbatim comments on certain issues in Commissioner Grueneich’s AD, SDG&E
will cite to those common issue and we request incorporation by reference herein.
3
The Commission has recognized that long-term transmission planning is not an exact science and
regulators and planners must necessarily make judgment calls regarding reasonable inputs and
assumptions used to determine the need, timing, and benefits associated with new infrastructure
investments. In D.06-11-018, Mimeo at 55 the Commission recognized that among these assumptions
“there would be limited value to undertaking detailed simulations much beyond five years of initial
operation, due both to increasing uncertainty regarding market conditions as time progresses and to the
fact that energy benefits during the later years will be increasingly discounted in present-value benefit
calculations.” Yet in this proceeding, the November 1, 2006 Scoping Memo at 13 directed SDG&E to
use a 10 year analysis period. Beginning with its December 2005 Application through its March 2007
rebuttal testimony, SDG&E has undertaken hundreds of economic modeling runs to complete twenty
four cases using changing generation and transmission assumptions. During the course of the Phase 1

2
II. THE PD’S IN-AREA GENERATION ASSUMPTIONS ARE LEGALLY AND
FACTUALLY ERRORONEOUS

Aside from certain adjustments, the PD utilizes the CEC staff’s November 2007 SDG&E
load assumptions in its Analytical Baseline calculations, which is consistent with D.07-12-052,
Mimeo at 28, showing SDG&E has reliability deficiencies beginning in 2010 growing through
2016 without Sunrise. The material difference between SDG&E’s and the CAISO’s projected
reliability needs beginning in 2010 and the PD Analytical Baseline, however, is that the PD
assumes in-area conventional and renewable generation becomes available or remains that
SDG&E and the CAISO did not assume. The PD’s treatment of this generation is legally and
factually not supportable for the reasons described below.

A. The PD’s arbitrary and capricious assumptions about future in-area

conventional generation contradict the Valley Rainbow and Jefferson-Martin
decisions and the most recent LTPP decision

The PD’s Analytical Baseline assumes that substantial amounts of in-area generation will
be available to satisfy SDG&E’s reliability needs until 2014. In response to SDG&E and the
CAISO testimonies that this generation is speculative and uncertain, the PD states that that
“[c]riticisms of the viability of specific projects in the All-Source Alternatives are over-stated.”
Id. at 228. It fails, however, to articulate a reasoned basis why its assumptions concerning the
viability of the San Diego Community Power Project (“SDCPP”), the Carlsbad Energy Center,
and various peaker plants are consistent with the Commission’s Valley Rainbow and Jefferson-
Martin decisions. For the reasons described in SDG&E’s Comments on the Alternate Proposed

hearings, SDG&E undertook economic modeling using changed assumptions requested by UCAN. In
its Phase 2 showing, it undertook economic modeling of Sunrise and alternatives identified in the
DEIR. Near the end of Phase 2 hearings, at the direction of ALJ Weissman, further modeling was
undertaken to complete Exs. SD-142 and SD-144, and as requested by UCAN to complete Ex. SD-143.
Throughout this proceeding, the CAISO has undertaken numerous modeling studies. The results of this
extraordinary modeling effort demonstrated that in comparison to Sunrise, the alternatives were not
cost effective. Nonetheless, after the hearings had concluded ALJ Weissman directed the CAISO to
undertake additional modeling and analysis based on defective, outdated, facts not reflected in the most
recent record that ultimately found their way into the Compliance Exhibit-1 discussed herein. This
exhibit was “updated” with changed assumptions that in large measure were not the subject of hearings,
which the PD utilized to support its conclusion that Sunrise was not needed nor economic in
comparison to the in-area all source generation alternative. Except for the analysis in the Compliance
Exhibit utilizing a 20% RPS goal and in the PD’s update, this monumental modeling effort by SDG&E
and the CAISO demonstrates that Sunrise is economically beneficial to customers in comparison to the
alternatives over a broad range of conservative assumptions.

3
Decision of Commissioner Grueneich (“AD”), under CAISO Grid Planning Committee
Guidelines, the Commission’s Valley Rainbow and Jefferson-Martin decisions,4 and prudent
transmission planning principles for a five year planning horizon, it is reasonable to assume for
planning forecasts only generation that is under construction and has a planned in-service date
within that planning horizon should be considered as in-service for reliability analysis. In ten-
year planning cases, only generation under construction or that has received regulatory approval
should be assumed in a reliability analysis.5
Nearly all of the generation projects that the PD assumes will serve SDG&E’s reliability
needs in the In-Area, All-Source Generation Alternative do not meet the standards of the CAISO
Grid Planning Committee guidelines, the Valley Rainbow and Jefferson-Martin decisions, or
prudent transmission planning principles. The PD failed to support its position with record
evidence that would justify overturning this Commission precedent. The principles adopted by
the PD would establish new and troubling transmission planning standards that would make it
very difficult for the Commission in future CPCN proceedings to approve new transmission
projects. Under the PD’s standard, a hypothetical generating unit could trump a transmission
line proposal every time. None of the following generation units -- each considered potential
generation units in the New In-Area, All-Source Generation Alternative -- meets the
requirements of the CAISO Planning Guidelines, Commission precedent or prudent utility
planning:
• South Bay Replacement Project (SBRP): Even though the project proponent has
stated its commitment to cause the SBRP to go forward, as noted in the PD at 221, it
has withdrawn its Application for Certification with the CEC and does not have a
PPA.
• San Diego Community Power Project (SDCPP/Enpex): The SDCPP has not
submitted an Application for Certification to the CEC and does not have a PPA. In
fact, the SDCPP has been in the CAISO’s generator interconnection queue since

4
D.02-12-066 (2002), D.04-08-046 (2004).
5
Brown, Ex. SD-36 at 12.2, citing CAISO Approach on the Modeling of New Generation in Power Flow
Cases, at p. 1 (April 16, 2004)). Available at the following link
http://www.caiso.com/docs/2001/06/25/20010625134406100.pdf and also at Ex. SD-36, Attachment
12-1. According to this CAISO Committee, in five-year planning cases (emphasis added), “only
generation that is under construction and has a planned in-service date within the time frame of the
study should be modeled in the initial power flow case.” In ten-year planning cases, “only generation
that is under construction or has received regulatory approval should be modeled in the area of interest
in the initial power flow case.

4
 November 2000. This proposed project has already attracted opposition, even at this
early stage of its development. In fact, the City of Santee is fighting the proposal as
reflected by the testimony submitted in Phase 2 by Gary Halbert (Ex. Santee-001) and
news accounts.6 The PD notes a comment from ENPEX discussed in the FEIR/EIS to
the effect that the “biggest hurdle to its development is SDG&E’s refusal to sign a
[PPA], despite their lowest cost bid in SDG&E’s solicitation.” Id. at 232. What the
PD failed to note was the Commission’s acknowledgement in D.04-06-011 at 61 that
this ENPEX bid “too speculative, [is] not far enough along in the permit review
process, and/or do not provide the environmental or cost benefits that” CalPine’s
Otay Mesa project “will provide.”
• Carlsbad Energy Center (Encina Repower): The Carlsbad Energy Center Project
does not have approval from the CEC for its Application for Certification, does not
have a PPA, and is opposed by the City of Carlsbad.

It is highly unlikely that any of these large projects, if begun today, could be online prior
to 2012 and most likely later. Considering any of them in the Analytical Baseline used to
evaluate the need for Sunrise is contrary to the CAISO Guidelines and this Commission
precedent.
Even if one ignores Commission precedent and considers in the baseline generation units
as yet unknown, such hypothetical generation would not be available in time to serve SDG&E’s
reliability needs. The length of time needed for development of a power plant depends upon
several complex steps, including resource solicitation, evaluation and contract negotiation (up to
one year), regulatory approval (six to nine months), permitting (up to 18 months to process),
engineering and equipment procurement (18 to 20 months), construction and commissioning (24
to 36 months). In SDG&E’s discussions with developers, they have made clear that, even for
simple cycle units, a new project starting today would have the highest probability of completion
in summer 2012, with very little room to accelerate the schedule and much risk of delay. Brown,
Ex. SD-36 at 12.6-12.7.
The Commission has recognized that these largely sequential steps require seven years to
develop a CCGT power plant (D.07-12-052 at 21):
[r]ecent experience suggest[s] that the time required to develop and carry-out competitive
long term RFOs, then finance, permit and construct new generation resources – including
a cushion to account for unanticipated delays – requires that these procurement decisions
be made up to seven years in advance of when the resources are needed.

6
See Notices of Ex Parte Communication of City of Santee (filed February 27, 2008 in this proceeding);
San Diego Union Tribune article entitled: “San Diego’s energy puzzle”, dated June 24, 2007.

5
 Lastly, the PD errs by ignoring SDG&E’s unrebutted testimony that the estimated cost
necessary to accommodate delivery of energy from this hypothetical in-area generation is $433
million (nominal). These costs combined with the cost of the generation and land components
makes these hypothetical all-source in-area projects economically infeasible compared to
Sunrise. Eck, Ex. SD-35 at 3.47 and Schneider, Ex. SD-36 at Tables 11.10 through 11-12 at
11.30 and 11-34-11-35; see, also, ALJ Revised Table 11-1 in Ex. SD-142 and Exs. SD-143 and
SD-144.
In sum, the PD fails to acknowledge and deal both with this legal precedent that “in five-
year planning cases a generation project must already be under construction, and in ten-year
cases a project should at a minimum be fully permitted7 and the facts concerning the costs of
these projects, including costs necessary to effect delivery of energy from this generation to load.

B. The PD’s arbitrary and capricious assumptions about future in-area

renewable generation contradict the Valley Rainbow and Jefferson-Martin
decisions

The PD repeats this same legal error in its Analytical Baseline assumptions described
supra applies equally to its assumptions with respect to the viability of in-area renewable
generation. The PD relies on four renewable sources identified in the EIR/EIS: Solar thermal
(290 MW); solar PV (210 MW); wind (400 MW); and biomass/biogas resources (100 MW). Id.
at 233 and 237. It also seems to rely on what it characterizes as “more modest projections
show[ing] a potential for over 4,100 MW of solar rooftop PV.” Id. at 237.
Nearly all of this hypothetical renewable generation the PD assumes will eventually serve
SDG&E’s customers’ reliability needs does not meet the CAISO Grid Planning Committee

7
Conservation Groups opening brief (at 228) argues that “SDG&E’s argument that the generation
facilities identified in the All-Source Generation Alternative are too uncertain applies also to the
viability of the Stirling Project.” This statement demonstrates a lack of understanding of transmission
planning, which the Commission properly addressed in Valley Rainbow and Jefferson-Martin. Because
this proceeding is assessing the need for Sunrise, the proper question is whether the availability of other
generation or transmission resources negates the need for Sunrise, not whether Sunrise will facilitate a
specific generation project. Also, the PD errs in treating Sunrise, which is a transmission system
addition, as if it were a “gen tie” line to the Stirling Project, which it is not. Sunrise is not a “private”
line connecting only the Stirling Project to the SDG&E load center in San Diego. It is a resource that
expands the capacity of the transmission system to deliver electricity generated in the Imperial Valley
region to SDG&E’s customers. E.g., Brown, Ex. SD-5 at II-4, -5, -11, -17. The PD itself accepts the
basic proposition that adding transmission capacity into San Diego will allow energy from many
renewable sources (not just Stirling) to flow to San Diego. PD at 70-71.

6
guidelines, the Commission’s Valley Rainbow and Jefferson-Martin standards, or prudent
transmission planning principles No evidence was introduced, nor did the PD recite any
principled basis for disregarding these standards.
The PD commits factual error by concluding that substantial amounts of in-area
renewable generation is economically viable. Id. at 65. The PD accepted at face value the
CAISO’s theoretical renewable supply curve (id. at 66, 131). Yet by adopting this supply curve
without adjustment, it acknowledges but ignores in its evaluation (id. at 234 and 236-238)
SDG&E’s unrebutted testimony that the estimated cost of transmission upgrades to make this
hypothetical in-area renewable generation available to the grid for reliability and RPS purposes
will be over $1 billion, plus the cost of required backstop generation. It is error to ignore these
unrebutted facts that when accounted for in combination with the generation and land
components makes these hypothetical in-area renewable projects economically infeasible
compared to Sunrise. Eck, Ex. SD-35 at 3.47 and Schneider, Ex. SD-36 at Tables 11.10 through
11-12 at 11.30 and 11-34-11-35; see, also, ALJ Revised Table 11-1 in Ex. SD-142 and Exs. SD-
143 and SD-144.
For causes many of these projects to be economically infeasible compared to Imperial
Valley area renewables facilitated by Sunrise. It commits this error so despite the CAISO’s
testimony in Phase 1 to the effect that in developing its supply curve, where possible, it used
transmission cost estimates for in-state renewable resource development. Orans, Ex. I-2 at 52:8-
9. SDG&E’s cost estimate mentioned above was not available to the CAISO. The PD errs in its
failure to recognize this record evidence.

C. The PD errs in its treatment of the existing South Bay Power Plant by
ignoring state policy and the viability and costs of continued operation of this
plant

For the same reasons described in on the Comments of SDG&E on the AD at Section
II.B, it is erroneous for the PD (see, e.g., id. at 34) to rely on the South Bay plant after 2009 for
purposes of reliability planning. This assumption carries substantial risk, given that this plant is
critical to SDG&E’s current reliability needs yet there is no viable alternative available.

7
 D. SDG&E’s recently-adopted LTPP confirms a 2010 reliability need for
Sunrise

For the same reasons described in on the Comments of SDG&E on the Alternate at
Section II.C, SDG&E’s recently-adopted LTPP8 provides a sound a basis for a Sunrise CPCN
based on a reliability need, with authorization to commence construction now. It is the PD’s
baseline assumptions to include, most significantly, South Bay and the Carlsbad Energy Center
that are outliers in the context of the Commission’s fully-litigated procurement process. Such
outliers should not serve as the basis for the Commission’s reliability finding for Sunrise.

E. The PD makes erroneous assumptions regarding the penetration rate and

costs of solar PV

As discussed in detail in Section II, supra, the evidentiary record clearly establishes that
the non-Sunrise alternatives are infeasible because they rely on the speculative existence of
possible future generation and imprudently put SDG&E’s ability to ensure reliable electric
service at risk.9 The assumptions made in the PD regarding the solar PV portion of the All-
Source Generation Alternative and the In-Area Renewable Alternative are particularly
unfounded both as to amounts and costs.
The PD assumes that the In-Area Renewable Alternative will be comprised in part of a
210 MW solar PV component (i.e., installation of approximately 60,000 residential and 255
commercial systems in San Diego County). Id. at 230.10 To support its conclusion that “San
Diego’s service area contains sufficient renewable resources to pursue this alternative,” the PD
relies on three pieces of evidence.

8
D.07-12-052 and Resolution E-4189, dated September 4, 2008.
9
The Proposed Decision attempts to dismiss these significant defects by characterizing each of the
components of the All-Source Generation Alternative and the In-Area Renewable Alternative as mere
“representative,” “proxy” projects that can be replaced by “other, similar projects.” PD at 221-222,
228-230. This approach ignores the fact that each hypothetical project is a key component of the non-
Sunrise alternatives, and each hypothetical project suffers from similar defects. They must be
considered as a whole in determining the feasibility of these alternatives, rather than isolating each
component and attempting to dismiss limitations in such components on the grounds that the particular
project is just a “proxy” for other (equally hypothetical) projects.
10
The Proposed Decision also concludes that the All-Source Generation Alternative would consist of
renewable distributed generation totaling 203 MW, including solar PV installation on residential,
commercial and/or industrial building rooftops. PD at 221-222.

8
 First, the PD points to an admittedly “wide range” of estimates—from 7,400 MW of solar
PV potential on commercial and residential structures (according to Mr. Powers) to 4,100 MW of
solar rooftop PV (according to Ex. U-93)—and concludes that “even the low end represents
substantial potential.” Id.at 234. The exhibit cited in the PD (Ex. U-93), is an article entitled
“Technical Potential for Rooftop Photovoltaics in the San Diego Region,” authored by Scott
Anders (of the University of San Diego School of Law) and Dr. Bialek (of SDG&E).11 The PD
relies on this article to demonstrate that “modest projections show a potential for over 4,100 MW
of solar rooftop PV,” and that SDG&E had 18 MW of solar PV installed in its service area” as of
January 2006. Id. at 234. However, the article merely discusses the technical potential for
rooftop solar PV in San Diego based on limited criteria, without considering other important
factors that impact the viability of this resource.12 The article does not demonstrate that the use
of solar PV assumed in the PD is realistic or feasible.
Second, the PD relies on the fact that “SDG&E’s recently filed solar PV application
seeks authority for 77 MW.” Id. at 234 (citing A.08-07-017). In its Solar Energy Project
application, SDG&E is seeking approval to build, own, maintain and operate up to 52 MWdc of
utility-owned solar PV generation facilities of 1-2 MWac each from 2009-2013. Application 08-
07-017 at 4. Output from up to 52 MWdc proposed pursuant to the Solar Energy Project is
projected to generate up to approximately 0.37%-0.38% of SDG&E’s 2013 retail electric sales.
Thomas, Ex. SD-35 at II-6, II-10, II-18-II-19. SDG&E’s witnesses explained that this represents
an important, but limited resource, and that SDG&E will be reliant upon renewables delivered
via the transmission system in order to meet its resource requirements and RPS goals.13 SDG&E

11
SDG&E has extensively discussed the flaws in Mr. Powers’ “aggressive” proposal during Phase 2.
SDG&E will focus on the “more modest” estimates cited in the Proposed Decision based on Exhibit U-
93.
12
See Ex. U-93 at 1 (“Our estimate only considers the physical limitations like roof area and expected
building growth and does not take into account economic or policy considerations.”); id. at 4 (“Without
considering economics, policy, and adoption rates, the total technical potential in capacity terms
exceeds the existing peak demand for the region.”). With respect to the amount of solar PV installed in
SDG&E’s service territory (18.1 MW as of January 2006), this merely represented 0.4% of 2005 peak
demand and 0.1% of total sales. Ex. U-93 at 1. Indeed, one solar proponent cited the PD conceded that
the 2040 MW of solar potential he identifies would cost $13.1 billion to implement. Powers,
T.3645:26-3646:2.
13
See Testimony of J. Avery, Chapter I at I-7-I-8 (“Even with the abundance of solar resource potential,
there are limited opportunities to develop renewable resources within SDG&E’s service territory. As a
result, there will still not be enough in-basin solar generation opportunities to satisfy all SDG&E’s RPS

9
further explained that its proposal is targeted toward a specific type of resource, and that the
benefits of the program are not attainable by installation of equivalent amounts of rooftop solar
PV.14 Thus, SDG&E’s application does not demonstrate the reasonableness of the widespread
use of rooftop solar PV assumed in the PD, or contradict the evidence presented by SDG&E and
its initial assumption that the San Diego area portion of the 3,000 MW CSI program could in
theory provide a maximum of 150 MW of dependable renewable energy potential by 2016. See
Bialeck, Exs. SD-6 at VI-27, SD-34C and SD-36 at 11.4, Table 11-1.
Third, the PD asserts that “SDG&E has acknowledged that its service area could support
a program similar to one that Edison has proposed (250 MW, with the potential to expand to 500
MW).” Id. at 234-235. This assertion is erroneous, and it is contradicted by the evidentiary
record. The PD cites to two documents to support the above statement—Exhibits SD-115 and
SD-116. These documents are simply SCE’s application for authority from the Commission for
its proposed solar PV program (SD-115) and SCE’s testimony in support of its application (SD-
116). Neither document contains any mention of SDG&E, let alone any “acknowledgement” by
SDG&E that a program similar to SCE’s could be adopted in SDG&E’s service area. In fact,
Dr. Bialek repeatedly testified that SDG&E is merely reviewing SCE’s plan;15 SDG&E has
concerns regarding its ability to replicate the plan given differences between SCE’s and
SDG&E’s service areas, including the fact that SCE has five times as much available
commercial rooftop space;16 SDG&E is concerned about the cost-effectiveness of SCE’s plan;17
and SDG&E cannot say what any ultimate proposal by the company would look like (or whether

requirements. In order to meet its RPS requirements and goals, SDG&E will still need to rely upon
large scale renewable energy projects that will be required to be delivered through the transmission
system.”).
14
See Testimony of T. Bialek, Chapter II at II-13 (“The SDG&E Solar Energy Project will be directed
toward photovoltaic tracking and parking lot shading PV systems (see Appendix I for descriptions).
SDG&E’s application is designed to expand and reduce the cost of a different type renewable
generation program that is not addressed by large rooftop solar PV installations. The solar PV market
for tracking and solar parking shading are distinct and unique segments within the renewable generation
sector that can be further developed and deployed. The benefits delivered to SDG&E’s customers and
to the promotion of deployment of a unique portion of the renewable generation market are not
attainable by installation of equivalent amounts of rooftop solar PV.”).
15
Bialek, T. 4974:18-19, 4975:1-5, 4978:26-4979:5.
16
Bialek, T. 4975:8-20, 4977:3-15.
17
Bialek, T. 4974:18-23.

10
or not it would resemble SCE’s proposal).18 This evidence demonstrates that SDG&E did not
acknowledge that its service area could support a program similar to the one adopted by SCE and
that SDG&E’s solar proposal anticipates installations on a much smaller scale.
In sum, the evidentiary record does not support the PD’s conclusions regarding the
amount of solar PV that is feasible. Given the costs and actual installation of systems in
SDG&E’s territory to date, and the unproven ability to greatly expand solar PV generating
capacity in the manner contemplated by the PD, the feasibility of achieving these components of
the non-Sunrise alternatives is unrealistic.

III. THE PD’S RPS ASSUMPTIONS ARE LEGALLY AND FACTUALLY

ERRORONEOUS

A. The PD errs by relying on the CAISO’s renewable supply curve which does
not reflect SDG&E’s experience with renewable RFOs

The PD claims that “the evidence strongly suggests that SDG&E has chosen to pursue an
RPS procurement policy dependent upon a Sunrise transmission solution, rather than contract
with other cost-effective RPS options.” Id., at 155. As described by SDG&E’s Mr. McClenahan
under cross-examination by ALJ Weissman, SDG&E’s renewable procurement plan utilizes the
Commission-approved RFO process. McClenahan, T.5666:22 – 5667:14. To elaborate, the RFO
process includes formulaic analysis of congestion and transmission cost upgrades impacting the
cost-effectiveness of all offers. McClenahan, T.5667:17-25. SDG&E has no control over results
of “least cost best fit” (“LCBF”) analysis. Therefore, assuming SDG&E purposefully pursues
Sunrise-dependent projects, the LCBF calculations would reject Sunrise-dependent projects that
were not cost effective from an RPS perspective. Further, SDG&E cannot control which offers
are submitted to SDG&E much less control the results of its LCBF formulaic calculations. As
SDG&E’s testimony clearly states, the results of these RFOs reflect SDG&E contracting with
bidders that reflect the Commission’s policy to procure renewables using a LCBF selection
methodology in reaching the short list of renewable project developers with whom contract
negotiations proceed. See, e.g., McClehanan, T.5666:22-26. However, the contracts that have
actually been approved by the Commission have not been the same as the lowest cost resources
identified in CAISO’s analysis. For example, the CAISO’s supply curve assumptions would

18
Bialek, T. 4975:1-7, 4978:26-4979:16.

11
suggest that distributed renewable Sources, such as urban municipal waste and landfill gas,
would represent a large portion of the resources that will be delivered to meet 20% RPS. A
review of the resources actually approved by the Commission demonstrates that distributed
resources like these represent a relatively small proportion of the approved resources. See, eg.
McClenahan, Exs. SD-24C at 12.19 -12.21 and SD-36 at 12.19-12.21. In reality the Commission
has approved a diverse variety of resources types (including wind, geothermal, and solar) of
varying sizes and located throughout California and beyond. Many of the approved resources
appear in the CAISO’s analysis as relatively higher cost resources. Nonetheless, approximately
60% of SDG&E’s 2010 RPS energy requirements and 68% of its capacity requirements are with
renewable projects in the Imperial Valley region. SDG&E also has 402MW in its portfolio that does
not depend on Sunrise. McClenahan, Ex. SD-134. These amounts do not consider the 250 MW of
wind generation that SCE has under contract than has not yet been approved by this
Commission, likely because the CAISO’s 1150 MW pre-dispatch limitation jeopardizes the
potential that this project can move forward without Sunrise. McClenahan, T.4717:17-24. This
evidence can not be reconciled with the CAISO’s hypothetical supply curve that the PD utilizes
in its Analytical Baseline analysis. SDG&E’s real-life experience is inconsistent with the
resources shown in the supply curve. SDG&E has not received offers in the amounts shown and
from the locations shown. In addition, the curve does not include other elements of LCBF
analysis which SDG&E is required to consider, including, as stated above, transmission cost
upgrades and congestion of all proposed projects.
The PD’s implicit criticism of SDG&E’s renewable procurement program - that it is
biased against equally-competitive bids north of SONGS or in the San Diego area - cannot be
reconciled with SDG&E’s Commission-approved annual RFO process. This process involves an
Independent Evaluator (“IE”) who reviews SDG&E’s RFO work to determine, among other
things, if any potential bias in the contracting activities in SDG&E’s RFO process. See. e.g.,
McClenahan, T.5666:23-25. The Commission adopted this IE requirement in D.04-12-
048 (Resource Planning OIR) to ensure that the utilities RFP process is transparent, fair and free
of any influence by any affiliate relationships. Id., Mimeo at 119-120 and 123-124. The
Commission further directed that the utility undertaking its RFOs would involve the IE and
acknowledged its earlier directive to include the Procurement Review Group (“PRG”) made up
of non-market participants, such as the Energy Division and TURN, in reviewing the utilities

12
overall procurement strategy, the proposed procurement process, including the RFO, and the
proposed procurement contracts before they are submitted to the Commission for review. Id.,
Mimeo at 124; see, also, McClenahan, T:5666:20-23. The IE and PRG review SDG&E’s
determination that the proposals are the “least cost/best fit” for SDG&E’s resource portfolio.
McClenahan, T.5666:22-26. SDG&E has utilized an IE and its PRG in every long-term
renewables and non-renewables RFO that has been issued since that date.19 As reflected in its
Advice Letters submitted to the Commission, SDG&E’s IE reports have been positive and have
not found any unfairness in SDG&E’s processes, nor has any report concluded that SDG&E
should have made a final selection that differs from what SDG&E actually selected. Most
significantly, none of the Commission’s resolutions have been critical of SDG&E’s RFO
process.
While the PD recites SDG&E’s testimony that the in-area renewables alternative will cost
between $661 million to $2.1 billion over the purchase price of out-of-basin renewable projects
utilizing Sunrise, it did not explain why this testimony was rejected in favor of the CAISO’s
supply curve. This treatment of SDG&E’s testimony is factually erroneous because the
theoretical data points found in that curve bear little, if any, relation to actual market experience
reflected in SDG&E’s RFOs. SDG&E currently has renewable energy under contract for about
60% (2000 gWh) of its 2010 RPS energy goals (approximately 3500 gWh). Approximately 731
gWh will be directly connected or scheduled to the Imperial Valley substation and are thus
reliant on Sunrise. These deliveries more than double in 2011. McClenahan, Ex. SD-35 at 6.28.
SCE has another 250 MW of renewable wind generation located in Mexico under contract
contemplating interconnecting to the SWPL. Id. These projects are jeopardized should Sunrise
not be approved. Id.20

19
See e.g., SDG&E Advice Letter 1845-E and approving Resolution E-4073 (March 15, 2007); SDG&E
Advice Letter 1872-E and approving Resolution E-4070 (April 12, 2007); SDG&E Advice Letter 1879-
E and approving Resolution E-4081 (May 24, 2007); SDG&E Advice Letter 1946-E, including
Confidential Appendix C (“Independent Evaluator RPS Solicitation Report”), and approving
Resolution E-4150 (April 10, 2008) and SDG&E Advice Letter 1947-E (pending CPUC approval).
The Commission re-affirmed the value of using an IE in D.07-12-052.
20
There are other sources in the record that reinforce the notion that most potential bidders in SDG&E
RFOs will be in the Imperial Valley region. There are currently over 6600 MW of interconnection
requests to the CAISO by renewable resource projects that could be assisted by Sunrise. McClenahan,
Ex. SD-35 at 6.28. IID testifies to more than 1800 MW of interconnection requests in its queue
(Montaño, Ex. I-3 at 2 and T.3446:24-25) that could be assisted by Sunrise. Accord, Brady at 6254:16-
17 and 27-28 and 6255:1-3.

13
 In addition, the PD’s adopted cost assumptions utilizing the CAISO’s supply curve for
renewable resources are factually inconsistent with the lower actual contract prices and capacity
factors found in SDG&E’s Commission approved renewable contracts of which a large portion
are from the Imperial Valley. See, Strack, Exs. SD-27 at 13-18 and SD-28C, Confidential
Attachment JJS-1; McClenahan, Ex. SD-34C Attachment 12-4 and SD-36 at 12-22-12.25 (cost
of in-basin renewables vs. cost of remote renewables). They are also inconsistent with
public information released on November 5, 2008 by California's Renewable Energy
Transmission Initiative (“RETI”) in the draft Phase 1B economic/environmental ranking report
(see Table ES-1 and Table ES-3 showing that Imperial North-A geothermal and Baja California
Norte wind have economic rankings that are sixth and seventh out of the top 18 Competitive
Renewable Energy Zones (“CREZs”) in the British Columbia, Canada; Washington; Oregon;
California; Nevada; Arizona; and northern Baja California, Mexico areas. Further, the Imperial
North-A geothermal CREZ has the highest environmental ranking of all California CREZs.21

B. The PD’s conclusion that for purposes of evaluating the cost-effectiveness of

Sunrise, renewable procurement will not exceed 20% over the entire period
between 2010 and 2058 is meaningless and inconsistent with the objectives of
AB 32 and D.08-03-018

Without conceding PD’s erroneous conclusion that Sunrise is not cost-effective at a 20%
RPS, if SDG&E and the other California utilities are to comply with the emission reductions
required by AB 32, then they will need to reach a 33% RPS level by 2020. The Commission
recognized in D.08-03-018 (at 36) that a 33% RPS target would “contribute significantly to
attainment” of the requirements of AB 32. This PD conclusion should further be modified to
reflect Executive Order S-14-08, dated November 17, 2008, directing all State government
agencies “to take all appropriate actions to implement this target in all regulatory proceedings,
including siting, permitting, and procurement for renewable energy power plants and
transmission lines.” SDG&E has expressed its goal of reaching a 33% RPS target by 2020.
Avery, T.312:20-28 and T.313:1-7. Accord, Reed, T.6244:13-17. SDG&E has stated that with
Sunrise, SDG&E could get well beyond 20% RPS depending on the actual capacity factors of
solar and wind. Niggli, T.3248:22-23 and T.3249:14-17. In its comments on the AD, SDG&E

21
See, RETI, Phase 1B, Draft Report, November 2008 at: http://energy.ca.gov/reti/documents/2008-11-
05_RETI_Phase_1B_Draft_Report.pdf

14
commits that it will contract towards a voluntary goal of achieving 33 percent of retail sales from
renewables by 2020 on the basis described therein.
Moreover, the Commission’s RPS Quarterly Report, July 2008, states that 50 percent of
green energy projects are at risk for failure because of a lack of transmission and that to meet a
20% RPS two new major transmission lines are required. To meet a 33% RPS this report states
that seven new major transmission lines are required. Id., at 7-8. In this context, the PD’s
conclusion respecting the 20% RPS, which implicitly suggests SDG&E will not exceed the
statutory 20% RPS, is not useful for purposes of evaluating the cost-effectiveness of Sunrise.22

IV. THE PD COMMITS LEGAL AND FACTUAL ERRORS BY FINDING THAT

ALTERNATIVES OTHER THAN SUNRISE WILL MEET SDG&E’S
RELIABILITY NEEDS MORE ECONOMICALLY

A. The PD ignores the weight of the evidence by relying on the “updated”

compliance exhibit

In reaching its conclusion that other alternatives than Sunrise will meet SDG&E’s
reliability needs more economically, the PD utilizes the “updated” Compliance Exhibit. This
exhibit applies the Analytical Baseline assumptions (id., at 140-153) that, for the reasons
described supra, are defective, outdated, do not reflect the most recent facts in the record, and are
not consistent with Commission precedent for purposes of evaluating the cost effectiveness of
Sunrise. Moreover, other assumptions that flow into this Analytical Baseline are factually
erroneous:
• The PD errs in asserting that SDG&E’s estimate of O&M costs for the Sunrise
Powerlink “appears to exclude associated general and administrative costs.” PD at
97. SDG&E’s testimony is unambiguous that A&G expenses are included in its
estimate of Sunrise O&M costs. Ex. SD-35 at 3.26 and Attachments 3-1 through 3-4.

22
While SDG&E believes the PD factually errs in its Finding of Fact No. 13 that “Sunrise is not necessary
for SDG&E to meet its 2010 20% RPS goal, given SDG&E’s commitment to reach a 33% goal by
2020, as described in its Comments on the AD, SDG&E is not pursuing to this err other than to note
substantial evidence to the contrary. See, e.g., Allen, Ex. SD-35 at 6.28-29, “[g]iven … Sunrise will
add 1,000 MW of transfer capability out of Imperial Valley to San Diego, Sunrise is necessary for
SDG&E and the state to meet their respective RPS goals”; McClenahan, Ex. SD-37 at 2.5-2.6,
“SDG&E already has contracted with a number of developers in Imperial Valley that could provide
almost 10% of SDG&E’s expected retail sales in 2011”; and McClenahan, Ex. SD-34C at 12.11),
“further amounts in 2011, a non-Sunrise option would result in a net loss of renewable energy for
SDG&E’s portfolio”.

15
 • The PD’s use (id., at 99) of UCAN’s contrived $26.3 million O&M cost estimate is
arbitrary and capricious and should be rejected by the Commission. SDG&E’s Phase
2 estimate of $3.9 million per year (in 2010 $) resulted from substantially more
rigorous and detailed effort by people working for SDG&E with decades of
experience in undertaking its transmission operations and maintenance work.
Romero, Ex. SD-35 at 3.59-3.60.
• The PD erroneously asserts that there is a “likelihood that SDG&E has
understated ... the need for associated facilities to achieve the projected Local
Capacity Requirements reductions.” Id. at 99. To the contrary, the record states that
SDG&E performed a large number of technical powerflow studies that prove the San
Diego area Local Capacity Requirements will be reduced by 1000 MW when the
Sunrise Powerlink is energized (i.e., the G-1/N-1 import capability into the San Diego
area will be increased from 2500 MW to 3500 MW; this increase in San Diego area
import capability means that an additional 1000 MW of generating capacity from
outside the San Diego area can be used to reduce San Diego area Local Capacity
Requirements on a megawatt-for-megawatt basis). Strack, Ex. SD-36 at 12.14 and
Ex. SD-38 at 2.10. The entity responsible for grid reliability -- the CAISO -- concurs
in this finding. Sparks. Sparks, Ex. I-2 at 73.
• The PD erroneously states that “neither SDG&E nor CAISO establish that criteria
violations in the power flow and other technical modeling of Sunrise are
insignificant.” Id. at 124. The powerflow analysis upon which the Sunrise plan of
service was developed specifically identified potential reliability criteria violations
and confirmed that the identified facility additions would mitigate those violations.
[cite].
• The PD erroneously states that “no party modeled the energy benefits of…[DEIR]
alternative[s] in the CPCN portion of the proceeding.” Id. at 226 and 233. SDG&E
did provide estimated energy benefits for all of the highest ranked alternatives in the
DEIR. Strack, Exs. SD-36, Attachments 11-2 through 11-13 SD-142 and SD-142,
Attachment 11-2 through 11-20.
• The PD erroneously assumes “no future renewables from Mexico in the Analytic
Baseline.” Id. at 73. This assumption is incompatible with the FEIR (at, e.g., ES-1
and PD at 218) that 1250 MW of potential wind generation located in northern Baja
California, Mexico; SCE’s signed contract for 250 MW of wind power to be located
in northern Baja California, Mexico). Avery, T.249:19-23; McClenahan, Ex. SD-35
at 6.28; and McClenahan, T.4358:6-8. It is also inconsistent with the RETI draft
Phase 1B economic/environmental ranking report at ES-9 that characterizes the
Baja California Norte wind as “look[ing] particularly promising.”.
Utilizing facts in the record other than the Compliance Exhibit, as updated, demonstrates
a wide range of annual net economic benefits in comparison to alternatives. The CAISO’s
analysis concludes that the Environmentally Superior Southern Route provides net annual
levelized benefits over 58 years of between $155 million under its RPS Base Case and $320
million annually (not including the Environmentally Superior Northern Route), depending on the

16
comparison scenario assumptions – amounts substantially more than the other alternatives
examined by the CAISO. Ex. I-13 at 22. SDG&E’s analysis concludes that Sunrise provides net
annual levelized benefits over 58 years of between $145 million and $268 million in comparison
to the In-Area All Source and In-Area Renewable alternatives. Strack, Ex. SD-36, Table 11-6.
SDG&E’s conclusions were confirmed by analysis undertaken by SDG&E at the request of
UCAN late in the hearing process. Exs. SD-143 and SD-144., The analysis requested by the
ALJ utilizing a CT reference case, among other input changes, or the UCAN-requested
combination CT/CCGT reference case under different heat scenarios, also demonstrate that the
Modified Southern Route superior to these new “references cases although remaining slightly
less beneficial than the Environmentally Superior Southern Route.” See, ALJ Revised Table 11-6
in Ex. SD-142; ALJ Revised Table 11-6 in Ex. SD-143; and ALJ Requested Table 11-6 in Ex. SD-144.

B. It would violate due process to rely on the PD’s compliance exhibit “Update.”

The PD relies solely on its “Update” to a Compliance Exhibit required by the presiding
ALJ for finding that SDG&E cannot economically meet 20% RPS with Sunrise. The PD
describes the changes to the analytical baseline in the Compliance Exhibit that it incorporated in
its Update. Id., at149-152. It would be reversible error for the Commission to rely on the
Update at all. The Update, disclosed for the first time in the AD and PD, was apparently
prepared by the ALJ after the record closed, based on post-record economic modeling of an
unspecified extent by the ALJ’s consultant, and on assumptions that were not disclosed in the PD
nor provided in any workpapers to the parties. Id. at 149 (adjusted amount of in-area renewables
that changed to some unknown extent the distribution of renewables throughout the WECC,
consistent with the CAISO’s assumed supply curve; and subtracts $367 million per year from the
assumed capital cost of the All-Source Generation Alternative in each scenario to address the 37
MW of solar PV already paid for in the California Solar Initiative program contrary to what is
assumed in the FEIR. See, e.g., id., Table AP.1-12. The Commission cannot properly ground a
decision on an ALJ-manufactured analysis that has not been fully disclosed to the parties, much
less without the parties having the opportunity for discovery, cross-examination or briefing on
such evidence. Furthermore, neither SDG&E nor the CAISO accepted the assumptions in the
compliance exhibit. The exhibit consists of a limited analysis conducted by the CAISO at the
ALJ’s behest using inputs provided by project opponents.

17
V. THE PD ERRS BY IGNORING THE EVIDENTIARY RECORD ESTABLISHING
THAT SIGNIFICANT GHG EMISSION REDUCTIONS WILL RESULT FROM
SUNRISE

The PD (at 164, 169) concludes that Sunrise will result in “potentially significant”
construction-related CO2 emissions, and that there is considerable “uncertainty of delivering
renewables over this line” sufficient to offset these construction-related CO2 emissions. Based
on these conclusions, the PD determines (at 169) that approving Sunrise under 20% RPS
purportedly is contrary to GHG emission reduction goals, and may serve to undermine those
goals by facilitating the sale of coal fired generation to California. These conclusions contradict
the overwhelming record evidence in this proceeding, which shows that Sunrise reduces GHG
emission because it facilitates the transition from fossil fuel to renewable energy use.

A. Sunrise will facilitate the development and interconnection of renewable

power plants in Imperial Valley, which will reduce GHG emissions by
displacing fossil-fueled generation

The PD identifies the construction emissions that are expected to result from Sunrise
(109,000 tons of CO2 over two years), and repeatedly expresses doubt that Sunrise will generate
sufficient operational CO2 emission reductions to offset these construction-related impacts.23
There is no evidentiary basis for the PD’s concerns, as it is clear from the record that Sunrise’s
construction-related GHG impacts are trivial when compared to the reduction in operational
emissions derived from the use of renewable power in place of fossil fuels.
If Sunrise is not built, SDG&E will have to rely on additional fossil-based resources in
order to meet its reliability deficiency and satisfy its local area requirements. Anderson, Ex. SD-
37 at 2.2. Even the cleanest fossil fuel energy sources emit quantities of GHGs far in excess of

23
See, e.g., PD at 164 (concluding that “potentially significant construction-related GHG impacts from
Sunrise can only be justified if there is assurance that the line will deliver significant amounts of
renewables”); id. at 165 (“The Final EIR/EIS concludes that absent this projected level [26.5%] of
renewable resources, Sunrise may not offset the estimated 109,000 tons of construction-related CO2
emissions.”); id. at 168 (concluding there is “insufficient information” regarding “the amount of
operational CO2 emission reductions Sunrise will generate under 20% RPS and whether they will be
sufficient to offset Sunrise’s construction-related CO2 emissions”); id. (expressing “concern regarding
whether Sunrise will generate sufficient operational CO2 emission reductions to offset these
construction-related impacts absent an aggressive GHG reduction policy”).

18
what would be produced by Sunrise,24 whereas renewable sources of energy “have very low net
GHG emissions.” Held, Ex. SD-35 at 4.1. It therefore is certain, and simple common sense
indicates, that GHG reductions will result from SDG&E replacing existing in-basin fossil fuel
resources with renewable energy resources that would be made available by Sunrise.
SDG&E presented evidence that GHG emission reduction benefits from Sunrise will vary
depending on the quantity of emissions that would otherwise have been produced from
conventional resources in the absence of this project. Anderson, Ex. SD-37 at 2.1-2.2. SDG&E
presented evidence regarding the range of potential GHG reduction benefits depending on the
amount of renewable power obtained from Imperial Valley. An extremely low assumption of
only 1% incremental renewable energy facilitated by Sunrise demonstrates that even a very small
increase in renewable energy production would nevertheless easily outweigh the amount of
short-term GHG emissions generated during Sunrise’s construction. Anderson, Ex. SD-37 at
2.2-2.3, Table 2-1. SDG&E’s Director of Procurement and Portfolio Design, Michael
McClenahan, explained that SDG&E expects to obtain renewable power from the Imperial
Valley far more than 1% of its expected 2010 retail sales. McClenahan, Ex. SD-37 at 2.5-2.6.25
The evidence clearly demonstrates the obvious - that displacement of fossil fueled plants
by renewable plants rapidly will reduce GHG emissions far below any temporary construction
emissions associated with Sunrise. The PD errs by ignoring this evidence.

B. SDG&E will have sufficient renewables under contract to reduce GHG

emissions with Sunrise

The PD (at 168-69) concludes that there is too much uncertainty as to whether
renewables will be delivered over Sunrise, and suggests that SDG&E does not have any GHG
emissions reduction policy in place to facilitate this GHG reduction. The evidentiary record
contradicts the PD’s conclusions.

24
For example, a natural gas power plant delivering 750 MW of power, even while meeting the
Commission’s GHG emission performance standard of 1,100 lbs of CO2 per MWh, would emit 3.25
million metric tons of CO2/year operating at full capacity. Held, Ex. SD-35 at 4.16.
25
To put this 1% in perspective, a 22 MW geothermal power plant operating at 90% capacity factor
would provide about 1% of SDG&E’s forecast 2010 RPS requirement (one twentieth of the 20% RPS
goal for 2010). SDG&E currently has ~60 MW of geothermal capacity already under contract in the
Imperial Valley. Anderson, Ex. SD-37 at 2.2.

19
 Based on the evidentiary record, there is no doubt that a significant portion of Sunrise’s
transmission capacity will be used for renewable resources. The evidence shows that SDG&E
already has contracted with a number of developers in Imperial Valley that could provide almost
10% of SDG&E’s expected retail sales in 2011. McClenahan, Ex. SD-37 at 2.5-2.6. Beyond
already-established contracts, SDG&E also holds an option, a right of first refusal, and is
negotiating with additional renewable energy developers in Imperial Valley. McClenahan, Ex.
SD-37 at 2.6; Ex. SD-36 at 12.11. In addition, of the over 7000 MW for new generation in the
CAISO queue that wish to connect to the SDG&E system that are located in the Imperial Valley
region, 100% are for renewable resources and none is for fossil resources. Anderson, Ex. SD-37
at 2.4-2.5.
Although the PD states that “[r]eliance on a single 900 MW contract (the Stirling Energy
Systems contract) is too risky to ensure that Sunrise will deliver renewables sufficient to offset
its construction-related CO2 emissions” (PD at 169), Sunrise’s purpose of providing access to
Imperial Valley renewable energy is not dependent on the success or failure of Stirling.26
SDG&E has existing contracts for renewable energy from Imperial Valley beyond Stirling,27
SDG&E is negotiating with additional renewable energy developers in Imperial Valley
(McClenahan, Ex. SD-36 at 12.11), and there are over 7000 MW of renewable energy projects in
the Imperial Valley in the CAISO Interconnection Queue (Anderson, Ex. SD-37 at 2.4-2.5). The
existence of Sunrise’s transmission capabilities also will encourage future development of
renewable resources in Imperial Valley even beyond the sources already contemplated.
Anderson, T.4431:13-15. Even accepting some risk that some renewable projects may not be
built, SDG&E fully expects to receive significant amounts of renewable energy over Sunrise.
McClenahan, Ex. SD-37 at 2.6. SDG&E expects to meet its RPS and GHG obligations by

26
It should be noted however, that Stirling has met all of its contractual commitments to date.
McClenahan, T.4354:8-27. Even though Stirling remains viable, the sheer size of the renewable
potential in the Imperial Valley will fill any shortfall resulting from Stirling’s failure should that occur.
27
See McClenahan, Ex. SD-37 at 2.5-2.6 (describing the following contracts: (1) Stirling Phase 1 (300
MW); (2) Esmeralda San Felipe (20 MW); (3) Esmeralda Truckhaven (40 MW); (4) Bethel 1 (50 MW);
(5) Bethel 2 (50 MW)). SDG&E also is negotiating with additional renewable energy developers in
Imperial Valley. McClenahan, Ex. SD-36 at 12.11.

20
contracting with renewable power in Imperial Valley region, and the ability to develop such
renewable power depends on construction of Sunrise.28
In sum, the evidence establishes that there are vast amounts of renewable energy in
Imperial Valley that will be delivered by Sunrise and benefit California’s GHG reduction efforts.

C. The PD fails to acknowledge that Sunrise is far superior from a GHG

perspective compared to the all-source generation alternative

The PD (at 71) “rejects SDG&E’s attempts to quantify the GHG emission impacts of the
Sunrise alternatives” and concludes that the alternatives’ “emission impacts are difficult to
quantify accurately given the number of unknown variables.” This assertion demonstrates how
the playing field has been tilted in the analysis; construction and operational emissions are
attributed to Sunrise while neither construction nor operations emissions are quantified for
alternatives. Although SDG&E believes that it is possible to make limited quantitative and
qualitative evaluations of the GHG emissions associated with each project alternative based on
the available data in the FEIR and CAISO report, Sunrise is still superior from a GHG emissions
perspective even if the Commission rejects SDG&E’s attempts to quantitatively compare
alternatives (which the Commission should not do). As both the FEIR and AD correctly
conclude, the All-Source Generation Alterative “will greatly increase GHG impacts relative to
Sunrise.” AD at 171. See FEIR at §§ H.6.1-H.6.2; General Response to Comment 8 at 2-44
(“The New In-Area All-Source Generation Alternative . . . would cause substantially more GHG
emissions than the Proposed Project”).

VI. THE PD ERRS BY FINDING THAT P.U. CODE § 399.25 DOES NOT SUPPORT
ISSUING A CPCN FOR SUNRISE NOW

For the same reasons described in SDG&E’s Comments on the AD, the PD errs in that it
provides no coherent rationale for its construction of § 399.25, and it errs by ignoring the plain
statutory text “necessary to facilitate” and not merely “necessary,” as the PD suggests. Thus, the
AD errs as a matter of law in its construction of the statute by disregarding its plain language and

28
The PD (at 168) erroneously suggests that SDG&E lacks an aggressive GHG reduction policy. But
there is extensive evidence in this proceeding about SDG&E’s project objective of obtaining access to
Imperial Valley renewables, and that SDG&E has been aggressively pursuing contracts for renewable
energy on every front. And, it is misleading for the PD (id.) to cite Mr. Niggli’s testimony about

21
by reading out of the statute the term “facilitate. The Commission should reverse the PD on this
point and find that Sunrise in fact needed under § 399.25.

VII. SDG&E PROPOSES FINDINGS OF FACT TO THE PD THAT ADOPT A COST

CAP

For the reasons described in SDG&E’s comments on the AD, for one of the largest and
most complicated transmission projects in California’s history, the PD should adopt a cost cap
with a 10% adder to the total project cost estimante cost cap as a contingency against unforeseen
circumstances.

VIII. THE PD ERRS IN ORDERING SDG&E TO PURSUE TWO COLLATERAL

PROJECTS THAT DO NOT ADVANCE SUNRISE OBJECTIVES

A. UCAN’s proposed Miguel substation modifications do nothing for project

objectives

The PD adopts UCAN’s assertion that modifying Miguel substation to increase its inlet
and outlet capacity would further the Sunrise objectives of renewable access and economics, and
it grants UCAN’s motion to require SDG&E to implement the upgrade. Finding of fact 4(h),
ordering ¶ 6(c).29 The PD (at 80) errs by wrongly finding that SDG&E has “effectively
endorsed” this separate project. This is not accurate. SDG&E’s evidence is unrebutted that (1)
no matter what is done to increase the Miguel outlet capability, SDG&E's import capability will
not increase (in other words, it does nothing for the San Diego area reliability deficiency) (e.g.,
Brown, Ex. SD-15 at 22:15-18) and (2) such modifications will do nothing to eliminate the 1150
MW dispatch limit that discourages renewable development in the Imperial Valley. Brown,
T.519:20-520:12, T.666:23-26. The Commission should reject the PD’s finding in this regard as
arbitrary and unrelated to this proceeding, and deny UCAN’s motion.

SDG&E’s GHG reduction efforts (T.3255:26-3257:5) as evidence that SDG&E does not have a “plan to
reduce GHG emissions.”
29
The PD also assumes the Miguel upgrade in its Analytical Baseline.

22
 B. The record demonstrates that UCAN’s Path 44 rating increase is neither
feasible nor cost-effective.

The PD (ordering paragraph ¶ 7) directs SDG&E to take the necessary steps to institute a
review of Path 44’s rating, and to report within 90 days of the effective date of this decision on
the status of the review and to serve the report on the assigned commissioner. It makes this
directive, even though it finds:
[w]e are not convinced at this time that UCAN’s Path 44 proposal presents a
viable means to increase import capability into the SDG&E load area and do not
adopt it for the Analytical Baseline. However, we agree that a review of
Path 44’s rating is warranted, particularly since the last one occurred in 2001, and
UCAN presents credible evidence that an increase in Path 44’s rating may be
possible.

To make such a finding, without regard to Sunrise objectives, about a project unrelated to
Sunrise, not within SDG&E’s service area or control, that even the PD admits is likely not
viable, is arbitrary and capricious in the extreme. Nor is it supported by the evidence. As the PD
acknowledges (at 82):
CAISO opposes UCAN’s Path 44 proposal for several reasons. CAISO states that
increasing the path rating would result in transient frequency dips in Mexico
which would cause NERC criteria violations, specifically, and thermal overloads,
generally. CAISO also claims that UCAN’s Path 44 proposal might be
uneconomic because a decrease in SDG&E’s Local Capacity Requirements would
be offset by an increase in Local Capacity Requirements in the Los Angeles area.

Similarly, SDG&E’s Phase evidence showed that this alternative was infeasible and not cost-
effective, especially given the Barre-Ellis route – the likely path of any such upgrade – lies
through developed coastal areas in SCE’s service territory. See SDG&E’s Phase 1 opening brief
(Nov. 9, 2007) at 107-113. In sum, the Commission should reject the PD’s directive on Path 44
as arbitrary, capricious, and contrary to the evidence and to the PD’s own fact findings.

///

///

23
IV. CONCLUSION

For the foregoing reasons, the Commission should reject the PD and approve a decision
consistent with the appended proposed findings of fact and conclusions of law.

Respectfully submitted,

/s/ E. GREGORY BARNES

E. Gregory Barnes
James F. Walsh
SAN DIEGO GAS & ELECTRIC COMPANY
101 Ash Street
San Diego, CA 92101
Telephone: 619/699-5019
Facsimile: 619/699-5027
E-mail: gbarnes@sempra.com

Attorneys for Applicant

SAN DIEGO GAS & ELECTRIC COMPANY

November 20, 2008

24
 APPENDIX (Rule 14.3 (b))

PROPOSED FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDERING

PARAGRAPHS to PROPOSED DECISION OF A.L.J. VIETH

Findings of Fact
1. At the time the Commission’s Economic Methodology Decision issued, SDG&E’s 2005
Application had been pending for almost one year and CAISO’s Board already had approved
CAISO’s economic evaluation of the Proposed Project. The assigned Commissioner never
issued a ruling that elected to apply the rebuttable presumption in the Economic Methodology
Decision to the economic analysis approved by CAISO’s Board.
2. In the CPCN review at the Commission, at the direction of the Assigned Commissioner
and the ALJ in the Scoping Memo and later rulings, CAISO has presented additional economic
analyses, which it developed during Phase 1 and 2 hearings. The assigned Commissioner never
issued a ruling that elected to apply the rebuttable presumption in the Economic Methodology
Decision to this new economic analysis by CAISO.
3. For purposes of developing an Analytical Baseline for determining the energy benefits,
reliability benefits, and RPS compliance savings estimates generated by all of the Sunrise
alternatives, the ALJ adopted CAISO’s modeling approach to quantifying energy benefits,
reliability benefits, and RPS compliance savings and to use CAISO’s final Phase 2 modeling
assumptions with the following deviations:
(a) use the Energy Commission staff’s November 2007 Forecast of 1-in-10
peak demand, including its embedded assumptions for the California
Solar Initiative, energy efficiency, and other distributed generation;
(b) adjust the November 2007 Forecast by including the demand response
savings we approved in SDG&E’s most recent Long Term Procurement
Plan;
(c) assume that the existing South Bay Power Plant will retire by December
31, 2012 or the end of the year in which Sunrise comes online,
whichever is earlier;
(d) assume only 25% of the new coal fired generation identified in the SSG-
WI database will come online and that combined cycle resources will be
used to replace the canceled coal plants;
(e) assume that at least 50% of the out-of-state renewables identified by
CAISO for its RPS Cost Savings modeling will be available to
California;
 (f) adopt CAISO’s initial renewable cost estimates;
(g) assume the implementation of UCAN’s Miguel Import Limit Upgrade;
(h) assume Imperial Irrigation District’s Path 42 increased rating and
upgrades (reflecting a transfer capability of 1,200 MW) and its
Dixieland-Imperial Valley line;
(i) assume Rancho Peñasquitos’ proposed Coastal Link Alternative; and
(j) assume SDG&E’s estimated capital costs for all of the Sunrise
alternatives, and SDG&E’s 58-year amortization period for the Sunrise
transmission alternatives, but assume UCAN’s projected operating and
maintenance costs of $26.3 million per year, which will add $22.4
million per year to SDG&E’s projected costs for the various Sunrise
routes.

4. The CAISO’s analysis concludes that the Environmentally Superior Southern Route
provides net annual levelized benefits over 58 years of between $155 million under its RPS Base
Case and $320 million annually. SDG&E’s analysis concludes that Sunrise provides net annual
levelized benefits over 58 years of between $145 million and $268 million in comparison to the
In-Area All Source and In-Area Renewable alternatives. These conclusions are a reasonable
representation of the range of benefits that could be realized with Sunrise.
5. It is not reasonable to rely solely on the ALJ’s Analytical Baseline Assumptions to
determine project need, because these assumptions represent a single scenario in circumstances
where other reasonable scenarios have been presented by CAISO and SDG&E.
6. With respect to UCAN’s Miguel Import Limit Upgrade proposal, the evidence is
unrebutted that (1) no matter what is done to increase the Miguel outlet capability, SDG&E’s
import capability will not increase (in other words, it does nothing for the San Diego area
reliability deficiency) and (2) such modifications will do nothing to eliminate the 1150 MW
dispatch limit that discourages renewable development in the Imperial Valley. Accordingly,
UCAN’s motion should be denied.
7. The record shows that an upgrade of Path 44’s rating is infeasible and not cost effective,
and, in any event, would not accomplish project objectives.
8. Table 5 in Section 7.1.2 of the AD projects, based on the Analytical Baseline
assumptions, the “reliability need” for SDG&E’s service area: by 2014 and perhaps sooner.
9. Using reasonable assumptions based on Commission findings, SDG&E’s updated Phase 2
analysis shows a 2010 reliability deficiency of 103 MW without Sunrise growing over time.

2
 10. The CAISO analysis shows 133 MW reliability deficiency in 2010. Taken with the
Analytical Baseline and SDG&E’s analysis, it is reasonable to find that a reliability deficiency
that Sunrise could address will arise as early as 2010.
11. Without Sunrise, this deficiency must be met with new generation sited within the
constrained San Diego basin.
12. Even if one assumes that there will be no reliability deficiency until 2014, given the
uncertainties inherent in forecasting and the prospect of unforeseen delays in construction, it
would be reasonable to start construction of Sunrise as soon as possible in order to address the
reliability deficit.
13. The Compliance Exhibit energy benefits estimates of $5 million per year under 20% RPS
and $18 million per year under 33% RPS are within the range of reasonable estimates in the
record.
14. We find that the combustion turbine costs assumed by CAISO are reasonable; we adopt
CAISO’s modeling methodology for reliability benefits and the results of that modeling, which
show reliability benefits of $237 million per year, because CAISO’s assumptions are consistent
with our adopted Analytical Baseline assumptions.
15. Applying the CAISO’s compliance savings model, Sunrise will not generate RPS
compliance savings assuming a 20% RPS. Under 33% RPS, Sunrise generates significant RPS
savings.
16. CAISO’s RPS compliance savings modeling does not reflect the way in which the RPS
program currently operates in California. However, CAISO’s model is a useful tool to identify
potential cost savings from the construction of Sunrise.
17. Since 2002 the Commission has approved at least 95 contracts with renewable resources
for 5,900 MW including 61 contracts with new renewable projects, totaling 4,480 MW, all under
the existing RPS framework. These contracts have not been the same as the lowest cost
resources identified in CAISO’s analysis.
18. Our Update to the Compliance Exhibit corrects for discovered errors and makes
adjustments in response to comments by parties in order to reasonably analyze the Compliance
Exhibit’s 4 cases against the Analytical Baseline assumptions. The Update was prepared after
the record closed, based on post-record modeling. No workpapers documenting assumptions and
calculations have been provided, and no party has had the opportunity for discovery, cross-

3
examination or briefing on the Update. The Update makes the following adjustments to the
Compliance Exhibit:
(a) assumes CAISO’s Phase 2 combustions turbine costs for all cases;
(b) adjusts the amount of in-area renewables in the All-Source Generation
Alternative, thereby changing the distribution of renewables throughout
the WECC, consistent with CAISO’s assumed supply curves;
(c) subtracts $367 million per year from the assumed capital cost of the All-
Source Generation Alternative in each scenario to address the 37 MW of
solar PV already paid for in the California Solar Initiative program;
(d) adjusts the modeling of the All-Source Generation Alternative so that RPS
compliance savings cannot be negative.
19. 60% of the energy currently under contract that SDG&E needs to comply with the 20%
RPS mandate, or approximately 2,000 GWh, is located in Imperial Valley and contingent upon
Sunrise.
20. Imperial Valley supports an unparalleled diversity of potential renewable generation
technologies that would be facilitated by Sunrise, including 2,300 MW of baseload geothermal.
21. Since the Sunrise project was announced, there have been over 5,000 MW of new
renewable generator interconnect requests in the CAISO queue that would be facilitated by
Sunrise.
22. Without the Sunrise Powerlink there is a substantial likelihood that only a fraction of the
potential generating capacity in Imperial Valley will come online.
23. The Commission has already approved 4 RPS PPAs in the Imperial Valley that would be
facilitated by Sunrise.
24. In D.07-03-012 the Commission found that in order to rely on § 399.25 a project
proponent must demonstrate: (1) that a project would bring to the grid renewable generation that
would otherwise remain unavailable; (2) that the area within the line’s reach would play a critical
role in meeting the RPS goals; (3) that the cost of the line appropriately balanced against the
certainty of the line’s contribution to economically rational RPS compliance.
25. Assuming 33% RPS and CAISO Phase 2 combustion turbine costs, Sunrise will generate
over $125 million per year in net benefits, which significantly exceeds the $93 million per year
of net benefits estimated for the All-Source Generation Alternative.
26. Without a secure transmission path, no significant amount of new renewable generation
will be constructed in the Imperial Valley region. Developers will not risk their capital

4
investment without certainty that their projects’ generation will be deliverable to loads. We
agree with CAISO and SDG&E that the construction of Sunrise would encourage the
development of renewable resources in the Imperial Valley region, thereby facilitating
achievement of the state’s RPS goals.
27. There is a tremendous amount of uncertainty regarding conclusions reached by the
models used in this case.
28. The record in this proceeding demonstrates that SDG&E, or third parties such as
Southern California Edison, have contracted with new renewable energy projects from the
Imperial Valley region with a capacity output at least as great as the transfer capability of
Sunrise, and which require Sunrise for delivery to California markets.
29. Reinforcing the assurances from executed contracts in the record, SDG&E has made
commitments to the effect that, if the Commission approves Sunrise without a compliance plan
subject to prior Commission approval and with an appropriate cost cap (1) SDG&E will commit
to not contract with coal generators for the delivery of energy across the Sunrise Powerlink; (2)
SDG&E will commit that in event that a renewable resource that is deliverable by Sunrise and
currently under contract to SDG&E fails, it will seek to replace that energy with another
renewable resource from the same region; and (3) SDG&E will voluntarily commit to raise its
RPS target to 33 percent by 2020, and to work with the Commission, Legislature and other
stakeholders to develop a fair set of rules that will apply to all load serving entities. These
commitments were detailed in SDG&E’s comments on the Alternate Decision of Assigned
Commissioner Grueneich.
30. Anza-Borrego’s General Plan, which governs State Parks’ management of the Anza-
Borrego, does not provide an exemption from its mandate for construction and maintenance of a
major transmission line like the Proposed Project.
31. If State Parks determined that any Northern Route through Anza-Borrego was
inconsistent with the existing Anza-Borrego General Plan, the State Parks and Recreation
Commission would have to exercise its discretionary authority to adopt revisions to the General
Plan to allow the siting and construction of this kind of project before State Parks could issue any
permits, which would cause substantial delay.

5
 32. The Proposed Project’s Anza-Borrego Link will require de-designation of 50.2 acres of
state wilderness; other Northern Routes would have a lesser, direct impact on wilderness but still
might require de-designation of some wilderness land.
33. Because SDG&E, BLM, Imperial Irrigation District and State Parks contest the width and
continuity of the existing easement through Anza-Borrego, any approval of a Northern Route
likely would lead, at minimum, to a complex and significant debate over the legal status and
rights associated with easements through Anza-Borrego, and would cause substantial delay.
34. Any Northern Route would have massive significant and unmitigable environmental
impacts on Anza-Borrego; be contrary to community values – both those of the people who visit
Anza-Borrego, as well as the values embodied in our state laws protecting areas like Anza-
Borrego; be permanently detrimental to recreational and park areas within Anza-Borrego; and
have permanent and negative impacts on historical and aesthetic resources in Anza-Borrego.
35. Based on the fire history reviewed herein, 230 kV and 500 kV lines placed on steel
towers are highly unlikely to ignite fires. However, given the fire risks associated with any
transmission line route in San Diego County, approval of the Final Environmentally Superior
Southern Route must be conditioned upon the most rigorous, reasonable mitigation available to
reduce the risk of fire ignition; therefore, this Commission should impose all feasible mitigation
measures specified in the ordering paragraphs.
36. While the fire history reviewed herein suggests a concurrent outage involving the
Southwest Powerlink and the Environmentally Superior Southern Route is more likely than one
involving the Environmentally Superior Northern Route, a dual line outage could occur whether
or not a new transmission line is collocated with the Southwest Powerlink, since special
proximity is not the only indicator of a concurrent outage. Moreover, the 230 kV segments of
the Environmentally Superior Northern Route put more assets at risk of fire.
37. The All-Source Generation Alternative, the In-Area Renewable Alternative, and the
LEAPS Transmission-Only Alternative – the three alternatives that the Final EIR/EIS determines
to be environmentally superior to the Final Environmentally Superior Southern Route, are not
feasible when the Commission factors in certain other considerations, including meeting
California’s broader policy goals.
38. The Final Environmentally Superior Southern Route is the highest ranked Alternative that
will facilitate Commission policy to achieve GHG reductions through renewable procurement in

6
the shortest time possible with the greatest economic benefits; therefore, the Final
Environmentally Superior Southern Route is necessary to meet California’s GHG goals by
facilitating increased levels of renewable development.
39. Approval of Sunrise should be conditioned as specified in the ordering paragraphs to
address community values concerns raised by Mussey Grade and others.
40. The EIR/EIS has adequately considered the concerns of the affected agricultural
communities in siting the Final Environmentally Superior Southern Route; moreover, approval
of the Final Environmentally Superior Southern Route rather than a Northern Route significantly
mitigates impacts on agricultural lands.
41. SDG&E should notify the Commission of any changes in the final project development
schedule for the Final Environmentally Superior Southern Route.
42. The Final EIR/EIS was presented to the Commission, and the Commission has received,
reviewed, and considered the information contained in the Final EIR/EIS.
43. The Final EIR/EIS reflects the Commission’s independent judgment and analysis.
44. Significant and unavoidable environmental impacts will result from construction and
operation of the Final Environmentally Superior Southern Route; however, the Commission has
adopted all feasible mitigation measures; adopted certain alternatives that reduce the impacts of
the Final Environmentally Superior Southern Route; rejected as infeasible alternatives to the
Final Environmentally Superior Southern Route; recognized all significant, unavoidable impacts;
and balanced the benefits of the Final Environmentally Superior Southern Route against its
significant and unavoidable impacts.
45. The benefits of the Final Environmentally Superior Southern Route outweigh and
override its significant and unavoidable impacts, for the reasons set forth in the statement of
overriding considerations in Section 20.3 of today’s decision.
46. The proposed Mitigation Monitoring, Compliance, and Reporting Program (Mitigation
Monitoring Program) in the Final EIR/EIS is designed to ensure compliance with the changes in
the project and mitigation measures imposed on the authorized project during implementation
and recommends a framework for implementation of the Mitigation Monitoring Program by this
Commission as the CEQA lead agency.
47. SDG&E should amend its EMF Management Plan as needed to apply its no-cost EMF
management techniques to the Final Environmentally Superior Southern Route.

7
 48. As discussed herein, the Commission requires periodic reports in order to implement and
monitor established procurement policies and, in addition, has multiple avenues to monitor,
evaluate, influence and enforce utility compliance with those policies. Further, the Commission
can seek sanctions should SDG&E deviate from the stated purposes of Sunrise – especially with
respect to the development of renewable resources. No additional compliance requirements are
necessary to guarantee that renewable generation is delivered via Sunrise.
49. As it has proposed, SDG&E should seek expeditiously to replace any Sunrise dependent
RPS contract that is determined to no longer be viable.

50. The reasonable maximum cost for the Final Environmentally Superior Southern Route
pursuant to § 1005.5(a) is $1.883 billion ($2012), based on estimates as calculated in Section 22
of President Peevey’s Proposed Alternate Decision. Given the magnitude of the uncertainty and
risk attendant to project completion, it is reasonable, consistent with other Commission decisions
approving large projects, to add 10% to this maximum cost to establish the project’s cost cap.
51. The exhibits specified in the ordering paragraphs were identified at hearing but
inadvertently, were not received in evidence. The CAISO Workpapers specified in the ordering
paragraphs should be identified and received in evidence as CAISO Exhibit I-15. To ensure the
completeness of the record, the complete EIR/EIS should be made a reference exhibit as
indicated in the ordering paragraphs.

Conclusions of Law
1. The Commission has jurisdiction over the proposed transmission project pursuant to
§ 1001 et seq.
2. The preponderance of the evidence standard, the default standard in civil and
administrative law cases, is the applicable standard of review here.
3. Neither the CAISO Board-approved economic evaluation nor the subsequent CAISO
economic evaluation should be granted a rebuttable presumption under the Commission’s
Economic Methodology Decision.
4. Consistent with the Commission’s Valley Rainbow and Jefferson-Martin decisions and
the CAISO Grid Planning Committee Guidelines, and prudent transmission planning principles
for a five year planning horizon, it is reasonable to assume for planning forecasts only generation
that is under construction and has a planned in-service date within that planning horizon should
be considered as in-service for reliability analysis. In ten-year planning cases, only generation

8
under construction or that has received regulatory approval should be assumed in a reliability
analysis.
5. The range of reasonable scenarios presented shows Sunrise is needed to fill a reliability
deficit beginning as early as 2010.
6. Sunrise will bring to the grid renewable generation that would otherwise remain
unavailable.
7. The area within Sunrise’s reach would play a critical role in meeting RPS goals.
8. The cost of Sunrise is appropriately balance against the certainty of the line’s
contribution to economically rational RPS compliance.
9. Economically rational RPS compliance necessarily depends upon the “least cost best fit”
evaluation process and ongoing Commission oversight.
10. Sunrise is “necessary to facilitate achievement of the renewable power goals” pursuant
to § 399.25. Therefore, we need not reach the question of what other economic benefit the line
may provide and could grant the CPCN on this basis alone.
11. Anza-Borrego is subject to the California Wilderness Act.
12. The Final EIR/EIS has been completed in compliance with CEQA and should be
certified.
13. The Mitigation Monitoring Program in the Final EIR/EIS should be adopted.
14. Consistent with our interpretation of § 625 in D.01-10-029, the appropriate standard of
notice for Sunrise is that prescribed by § 625(a)(1)(B), which only requires notice to the
Commission Calendar.
15. The Commission has jurisdiction and responsibility pursuant to § 1005.5(a) to specify a
“maximum cost determined to be reasonable and prudent” for the Sunrise project. If, as
specified in the ordering paragraphs, the cost estimates for the Final Environmentally Superior
Southern Route should prove to be materially lower than or higher than the adopted cost cap,
SDG&E shall request an adjustment to the cost cap.
16. Since no party will be prejudiced thereby, the exhibits specified in the ordering
paragraphs should be received in evidence and the complete EIR/EIS should be made a reference
exhibit.
17. UCAN’s motion regarding its Miguel Import Limit Upgrade proposal should be denied.
Since no party will be prejudiced thereby, these motions should be granted: all pending motions

9
of the CAISO for leave to file late and leave to submit additional testimony; all pending motions
to adopt transcript corrections; the motion of Powers Engineering Requesting Permission for
Late Filing of Brief and Reply Brief. Today’s decision on the merits of Sunrise renders all other
pending motions moot.

ORDER
IT IS ORDERED that:
1. The request of San Diego Gas & Electric Company (SDG&E) for a certificate of public
convenience and necessity to construct the proposed Sunrise Powerlink Transmission Project
(Sunrise) is granted for the routing alternative identified in the Final Environmental Impact
Report/Final Environmental Impact Statement (Final EIR/EIS) as the Final Environmental
Superior Southern Route
2. The Final EIR prepared for Sunrise is certified.
3. SDG&E shall notify the Commission of any changes in the final project development
schedule for the Final Environmentally Superior Southern Route.
4. The Mitigation Monitoring Program for the Final Environmentally Superior Southern
Route in the Final EIR/EIS is adopted and all feasible mitigation measures identified in the Final
EIR/EIS are imposed upon construction of the Final Environmentally Superior Southern Route,
including:
(a) requiring fire-safe construction practices to reduce the risk of wildfire
ignitions during construction;
(b) prohibiting construction during extreme weather conditions to reduce the
risk of potentially catastrophic wildfire ignitions during construction;
(c) ensuring adequate coordination for emergency fire suppression to avoid
project personnel and equipment interference with firefighting operations;
(d) ensuring adequate removal of hazardous vegetation;
(e) requiring annual contributions to a Defensible Space Grants Fund that will
assist in the maintenance of defensible space requirements and in the
implementation of other fire-safe measures at the private residences most
at risk of a project-related wildfire;
(f) requiring the replacement of existing 69 kV wood poles that are within
100 feet of the project with steel poles to mitigate the potential fire hazard
of a wood pole being knocked into the adjacent conductors;

10
 (g) requiring annual contributions to a Firefighting Mitigation Fund that will
improve fire prevention measures and help improve fire protection
equipment and services;
(h) requiring a Memorandum of Understanding between SDG&E, Cal Fire,
and Cleveland National Forest to coordinate effective fire plans and
emergency procedures;
(i) requiring weed abatement and controls for invasive weeds to prevent
establishment of non-native plants that have a high ignition potential and
carry fires at a high rate of spread; and
(j) requiring climbing inspections on 10% of the project structures annually to
improve detection of imminent component failures that could result in
wildfire ignitions.
5. SDG&E shall amend its Electro Magnetic Field (EMF) Management Plan as needed to
apply its no-cost EMF management techniques to the Final Environmentally Superior Southern
Route.
6. The reasonable maximum total project cost of $1.883 billion ($2012), plus a 10% adder is
adopted as the cost cap for the Final Environmentally Superior Southern Route. SDG&E shall
apply to the Commission for an adjustment of the cost cap in the following instances:
(a) Once SDG&E has developed a final, detailed engineering design-based construction
estimate for the Final Environmentally Superior Southern Route, if this estimate is
one percent or more lower than the authorized maximum, SDG&E shall within 30
days file an advice letter to show cause why the Commission should not adopt a
lower amount as the maximum reasonable total project cost to reflect the final
estimate.
(b) If SDG&E's final, detailed engineering design-based construction estimate for the
authorized project exceeds the authorized maximum cost, SDG&E shall, within 30
days, file an advice letter to seek an increase in the approved maximum cost pursuant
to § 1005.5(b).
7. The documents that constitute the Final Environmental Impact Report/Environmental
Impact Statement (Final EIR/EIS) are received as Reference Exhibits on the effective date of this
decision, as follows:
(a) Draft EIR/EIS – Reference Exhibit A;
(b) Recirculated Draft EIR/Supplemental Draft
EIS – Reference Exhibit B;

11
 (c) Final EIR/EIS – Reference Exhibit C; and
(d) Revisions to the Final EIR/EIS – Reference Exhibit D.
8. The following exhibits are received in evidence on the effective date of this decision:
Conservation Groups Exhibit C-15; Imperial Irrigation District Exhibit ID-4; Mussey Grade
Exhibit MG-32; Powers Engineering Exhibit Powers-1; and Rancho Peñasquitos Exhibits R-9,
R-10, R-11, R-12, R-13, and R-14.
9. CAISO Workpapers with the file names CAISO3 SD&LA v5.xls, CAISO3 SD&LA v5
less LCR case.xls, and CAISO3 SD&LA v4.xls are identified as CAISO Exhibit I-15 and
received in evidence on the effective date of this decision.
10. CAISO’s data request response to the Commission’s environmental consultant, entitled
“Information Request #2 to California Independent System Operator,” as subsequently updated
by CAISO to correct fuel oil emissions rates and then served on the parties to this proceeding by
email on August 4, 2008, is identified as CAISO Exhibit I-16 and received in evidence on the
effective date of this decision
11. Pending motions are resolved as follows:
(a) All pending motions of the CAISO for leave to file late and leave to
submit additional testimony are granted;
(b) All pending motions to adopt transcript corrections are granted;
(c) The June 5, 2007 Motion to Compel SDG&E to Upgrade its Import
Capability at Miguel Substation filed by Utility Consumer’s Action
Network (UCAN) is denied;
(d) The September 24, 2008 motion of Powers Engineering Requesting
Permission for Late Filing of Brief and Reply Brief is granted;
(e) UCAN’s June 5, 2007 Motion to Enjoin SDG&E from Entering Into a
Permanent Cross-Trip Arrangement with CFE is denied as moot; and
(f) All motions or portions of motions that have not otherwise been resolved
are denied as moot.
12. SDG&E shall take the necessary steps to institute a review of Path 44’s rating and,
within 90 days of the effective date of this decision, shall report on the status of that review and
shall serve (but not file) the report on the assigned Commissioner and the service list for A.06-
08-010, the other four Commissioners, and the Director of the Commission’s Energy Division.
The Energy Division’s Director will require additional reports as deemed necessary.

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 13. The issues in the Assigned Commissioner and Administrative Law Judge’s Scoping
Memo and Ruling, November 1, 2007, and Revised Scoping Memo and Ruling of the Assigned
Commissioner and Administrative Law Judge, June 20, 2008, have been addressed and this
proceeding is resolved for the purpose of compliance with Public Utilities Code Section 1705.1.
However, the proceeding remains open to address, as an adjudication, the issues raised by the
Assigned Commissioner’s Revised Scoping Memo and Ruling Regarding Possible Rule 1.1 and
Rule 8.3 Violations; Order to Show Cause, August 1, 2008.
This order is effective today.

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 CERTIFICATE OF SERVICE

I hereby certify that I have this day served a copy of the foregoing COMMENTS OF

SAN DIEGO GAS & ELECTRIC COMPANY ON ADMINISTRATIVE LAW JUDGE

VIETH’S PROPOSED DECISION on all parties identified in Docket No. A.06-08-010 by

U.S. mail and electronic mail, and by Federal Express to the assigned Commissioner(s) and

Administrative Law Judge(s).

Dated at San Diego, California, this 20th day of November, 2008.

/s/ JOEL DELLOSA

Joel Dellosa