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HomeMy WebLinkAbout2008/11/25 Item 11 CITY COUNCIL AGENDA STATEMENT ~~ CITY OF . -- - - CHULA VISTA SUBMITTED BY: NOVEMBER 25,2008, ItemL PRESENTATIONS BY PROPONENTS AND OPPONENTS REGARDING THE APPLICATION BEFORE THE CALIFORNIA PG'BLIC UTILITIES COMMISSION TO CONSTRUCT THE SUNRISE POWERLINK TRANSMISSION PROJECT DIRECTOR OF CONSERVATION & ENVIRONMENTAL SERVICES INTERIM CITY MANAGER S r 1Y) ITEM TITLE: REVIEWED BY: 4/5THS VOTE: YES D NO 0 SUMMARY Representatives of the proponents and opponents of the Sunrise Powerlink have been invited to present information on the proposed transmission project Staff has requested that the representatives limit any formal remarks and or presentations to approximately 10 minutes and that they be prepared to answer questions that Councilmembers may have regarding the project Attached for your information are copies of Frequently Asked Questions and a press release from the California Public Utilities Commission (CPUC) that describe the current status of the project before the CPUC ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed actIvIty, for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a "Project" as defmed under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060 (c )(3) of the State CEQA Guidelines the activity is not subject to CEQA Thus, no envirorunental review is necessary. RECOMMENDATION Council consider the presentations of the proponents and opponents of the project and determine if Council wishes to take a position on the project 11-1 NOVEMBER 25,2008, Iteml Page 2 of2 DECISION MAKER CONFLICT Staff has reviewed the property holdings of the Councilmembers and has found no property holdings within 500 feet of the boundaries of the property which is the subject of this action. FISCAL IMP ACT There are no direct fiscal impacts to the City as a result of the presentations. BOARDS/COMMISSION RECOMMENDATION Not applicable. ATTACHMENTS Exhibit A: CPUC Press Release Exhibit B: CPUC Frequently Asked Questions Exhibit C: CAlSO Response To Energy Sub Committee Regarding SBPP RMR Prepared by: Michael Meacham, Director, Conservation & Environmental Services 11-2 Exhibit A California Public Utilities Commission 505 Van Ness Ave., San Francisco FOR IMMEDIATE RELEASE Contact: Terrie Prosper, 415.703.1366, news@cpuc.ca.gov PRESS RELEASE Docket #: A.06-08-010 CPUC ISSUES PROPOSED DECISIONS IN SUNRISE TRANSMISSION LINE PROCEEDING SAN FRANCISCO, October 31, 2008 - The California Public Utilities Commission ECPUq today released an Administrative Law Judge Proposed Decision and a Commissioner's Alternate Proposed Decision regarding San Diego Gas and Electric Company's (SDG&E) proposed ISO-mile Sunrise Powerlink Transmission Project. The Proposed Decision sponsored by an Administrative Law Judge (ALJ) denies the Sunrise application, stating that the line is not needed to meet California's current renewable requirements, and that, if constructed, it could result in very significant costs to ratepayers and extensive environmental damage. Among other things, the AU's proposed decision states SDG&E's service area will not experience a reliability need or "shortfall" until 2014, and the shortfall may be met more economically and more reliably with generation-based alternatives. The Alternate Proposed Decision sponsored by Commissioner Dian M. Grueneich, the assigned Commissioner in the Sunrise proceeding, approves, with conditions, the Final Environmentally Superior Southern Route for Sunrise that is described in the Final Environmental Impact ReportlEnvironmental Impact Statement. This route avoids Anza- Borrego Desert State Park and all tribal lands. The Alternate Proposed Decision also concludes that Sunrise is not needed to meet California's current 20 percent by 2010 renewables requirement, but that it will be needed to meet California's greenhouse gas (GHG) reduction goals by facilitating renewable procurement at 33 percent levels. I fIlll~..~ California Public Utilities Commission 11-3 Exhibit A The Alternate Proposed Decision fmds that if Sunrise is used to deliver renewable power at 33 percent levels it will generate over $100 million per year in ratepayer benefits. Thus, the Alternate Proposed Decision requires SDG&E to prepare a "Sunrise Compliance Plan" for CPUC approval that will ensure that substantial amounts of Imperial Valley renewables will be delivered on the line. If SDG&E agrees to the condition, it will be permitted to engage in pre-construction activities prior to the CPUC's approval of its compliance plan, but it may not engage in any activities that could result in a material physical impact to the environment. In describing the Alternate Proposed Decision, Commissioner Grueneich said, "It is critical that we focus on our GHG goals. If Sunrise can deliver the Imperial Valley renewables promised by SDG&E, we can go a long way toward meeting those goals and provide hundreds of millions of dollars in ratepayer benefits." Oral argument in the proceeding will be held in the CPUC's Auditorium at 505 Van Ness Ave., San Francisco, on November 7,2008, at 10:30 a.m. Parties in the proceeding may also file comments on the Proposed Decisions and! or Alternate Proposed Decision by November 20,2008, and reply comments by November 25,2008. The CPUC's first opportunity to vote on the ALl Proposed Decision and the Alternate Proposed Decision is December 4, 2008. Any Commissioner may draft another Alternate Proposed Decision presenting differing conclusions or opinions for consideration by the full CPUC. Within 30 days after a decision is issued by the CPUC, parties can apply for rehearing. For further information on the CPUC's decision-making process, please call the CPUC Public Advisor at (866) 849-8390 or (415) 703-2074 or email publi c .advisor(a)cpuc. ca. gov. Electronic copies of the ALl Proposed Decision and the Alternate Proposed Decision are available at www.cpuc.ca.gov/PUClhottopics/lenergv/a05l20l4.htrn. For more information on the CPUC, please visit WWW.cpuc.ca.gov. tI11Ll.i'~~ California Public Utilities Commission 11-4 2 Exhibit B I California Public Utilities Commission 505 Van Ness Ave., San Francisco FREQUENTLY ASKED QUESTIONS AND ANSWERS October 31, 2008 Docket #: A.06-08-01 0 Sunrise Powerlink Transmission Project What is Sunrise? Sunrise is a transmission line proposed by San Diego Gas and Electric Company (SDG&E). SDG&E filed a Certificate of Public Convenience and Necessity (CPCN) seeking approval to construct Sunrise from the California Public Utilities Commission (CPUC). SDG&E's initial construction proposal, referred to as the proposed project, contemplates a new transmission line running approximately 150 miles from the EI Centro area of Imperial County through Anza-Borrego Desert State Park (Anza-Borrego) to northwestern San Diego County. The proposed project includes construction of91 miles of 500-kilovolt (kV) line and 59 miles of230 kV transmission line, replacement of transmission cable for several other lines, a new substation, and modification of several other substations. What is currently happening in the Sunrise case? The CPUC and the United States Bureau of Land Management published the Final Environmental Impact Report/Environmental Impact Statement (Final EIRIEIS) on October 13, 2008. On October 31,2008, the CPUC issued two proposals for CPUC consideration: a Proposed Decision sponsored by the assigned Administrative Law Judge (ALJ) in the case, and an Alternate Proposed Decision sponsored by Commissioner Dian M. Grueneich, the assigned Commissioner in the Sunrise proceeding. There will be oral argument in the case in the CPUC's auditorium at 505 Van Ness Ave., San Francisco, on November 7,2008, at 10:30 a.m. The public is welcome to attend. The CPUC may vote on either of the proposals, or may consider another Alternate, if one is sponsored by another Commissioner. The first opportunity for the CPUC Commissioners to vote on the two Sunrise proposals is at the CPUC's December 4, 2008, public business meeting. 1 flIl.../~,~ California Public Utilities Commission Exhibit B I What does the ALJ's Proposed Decision decide and why? The ALI's Proposed Decision denies SDG&E's application for a CPCN to build Sunrise because the ALl determined: · Sunrise will have many significant and unmitigable impacts on the environment; · Sunrise is not needed to meet SDG&E's renewables portfolio standard (RPS) obligation of obtaining 20 percent of its power from renewable sources by 2010; · Assuming a 20 percent RPS, Sunrise is not economic and will potentially generate significant ratepayer costs; · SDG&E' s service area will not experience a reliability need or "shortfall" until 2014; and . Other generation-based alternatives will meet SDG&E's eventual reliability needs more economically and with fewer significant and unmitigable impacts on the environment than Sunrise. What does Commissioner Grueneich's Alternate Proposed Decision decide and why? The Alternate Proposed Decision conditionally approves SDG&E's CPCN application to build Sunrise along the Final Environmentally Superior Southern Route based on CPUC approval of an SDG&E compliance plan to ensure that substantial amounts of Imperial Valley renewable resources will be delivered over Sunrise. The approved route, the Final Environmentally Superior Southern Route, avoids Anza- Borrego. Both the ALl's and Commissioner Grueneich's proposals fmd that any route through Anza-Borrego would have too many significant unmitigable environmental impacts and is infeasible. The Alternate Proposed Decision deviates from the Proposed Decision by assuming higher combustion turbine prices and focusing on the economic results assuming renewable procurement at 33 percent RPS levels. Under these assumptions, the Alternate Proposed Decision fmds: . Sunrise will generate over $100 niillion per year in ratepayer benefits, significantly more than the other alternatives; · The CPUC is committed to achieving greenhouse gas (GHG) reductions in the energy sector through, in part, renewable procurement at 33 percent RPS levels; · The other environmentally preferred alternatives are infeasible for meeting these broader policy goals; and · Sunrise - in the form of the Final Environmentally Superior Southern Route - is the highest ranked Alternative that will facilitate CPUC policy to achieve GHG reductions through renewable procurement at 33 percent RPS levels in the shortest time possible with the greatest economic benefits. 2 California Public Utilities Commission Exhibit B I What is the Alternate Proposed Decision's condition on SDG&E's construction of the Environmentally Superior Southern Route? The Alternate Proposed Decision finds that to the extent that the Final Environmentally Superior Southern Route is used to deliver substantial amounts of Imperial Valley renewables to consumers, it will contribute to meeting California's OHO goals and generate over $100 million per year in ratepayer benefits. Absent delivering substantial amounts of renewables, Sunrise could generate significant ratepayer costs, and may generate significant construction-related carbon dioxide emissions that will not be offset by its operation. To ensure the OHO emission reductions and economic benefits estimated for the Final Environmentally Superior Southern Route, the Alternate Proposed Decision conditions CPUC approval of Sunrise on SDO&E providing sufficient assurance that the Final Environmentally Superior Southern Route will be used to deliver substantial amounts of Imperial Valley renewable generation to the California market, including San Diego. If SDO&E agrees to such a condition, it would notify the CPUC of its agreement in a letter to the CPUC's Executive Director within 20 days of the decision. It would then submit a plan to the CPUC, in the form of an application that describes how it will ensure that Sunrise will be used to deliver substantial amounts of Imperial Valley renewable generation (Sunrise Compliance Plan). Prior to the CPUC's approval of the Sunrise Compliance Plan, SDO&E may engage in pre- construction activities, but it may not engage in any activities that could result in a material physical impact to the environment. What is the route of the Final Environmentally Superior Southern Route? The Final Environmentally Superior Southern Route is 123 miles long and stretches from the Imperial Valley Substation in the east ofSDO&E's service area to Sycamore Canyon Substation in the north west ofSDO&E's service area. The line would be 500 kV for 92.5 miles and then convert to 230 kV for 30.3 miles from the new Modified Route D Substation to the Sycamore Canyon Substation. From east to west, the line would follow 1-8 and the Southwest Powerlink route for nearly 36 miles in an area oflow fire risk, would loop north ofI-8 for 17 miles, and then south again, where it would rougWy parallel the Southwest Powerlink route for another 13 miles near the Hauser Wilderness Area with a separation of 3 to 5 miles between the two lines. The line would then cut north near the existing Barrett Substation and would travel underground in Alpine Boulevard to the west, returning to overhead adjacent to 1-8 and terminating at Sycamore Canyon Substation. The Final Environmentally Superior Southern Route would pass through 19.2 miles of Cleveland National Forest land within acceptable land use zones and the proposed federal Section 368 utility corridor. 3 iAli11Jlj'fJ~ California Public Utilities Commission Exhibit B I Does the Alternate Proposed Decision propose any conditions to respond to wildfire concerns? The Alternate Proposed Decision requires significant mitigation to address wildfires that could be ignited due to both the construction and operation of the line. Such mitigation includes: · Prohibiting construction during extreme weather conditions to reduce the risk of potentially catastrophic wildfire ignitions during construction; · Ensuring adequate removal of hazardous vegetation; . 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; . 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 . Requiring climbing inspections on 10 percent of the project structures annually to improve detection of imminent component failures that could result in wildfrre ignitions. When would the line, if built, be operational? SDG&E has projected that the line would be operational by 2011, but that estimate is overly optimistic. There is no reliability shortfall in SDG&E's service area until 2014, and that shortfall is projected to be very small. Consequently, there is sufficient time to develop Imperial Valley renewables and construct the line without an impact on SDG&E's quality of service. For more information, please contact the CPUC's News and Public Information Office at 415.703.1366 or news@cpuc.ca.gov. 4 iliJi111lll. .~. California Public Utilities Commission r~ f.;. ~ ~. ~~f 12 . 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" ~~: ",. !l i; ?' . t~ California ISO jIECCTPi?i7.\f c.r;'o;;f.~.wJr~m Operator Corporation JAN 3 I ',."q. ,1"",,,,,; Your Link to Power r"kout Mansour President & Chief E;cec:utive Officer January 28, 2008 Honorable Cheryl Cox Mayor City of Chuia Vista 276 Fourth Avenue, MS A-10t Chula Vista, CA 91910 Dear Mayor Cox: Thank you for your letter of January 7, 2008, regarding the future of the South Bay Power Plant ("SBPP"), The letter asks the California Independent System Operator (ISO) to respond to the following questions: 1) What is the function of the SBPP as it relates to reliability and transmission? 2) What needs to occur in order to reduce the reliability designation on the SBPP enough to allow the lattice towers and transmission lines to be removed by December 2008? 3) What needs to occur in order to eliminate the Reliability Must Run (RMR) designation on SBPP so that it can be decommissioned and removed by February 2011? I understand that the City of Chula Vista is in negotiations with various parties regarding the future use of the bay front that would require removal of the SBPP, Thus, the liming of the possible retirement of the SBPP is an important factor in these negotiations, As you know, the generating units at the SBPP are currently designated by the CAISO as Reliability Must-Run (RMR) units, This designation cannot be removed until local reliability requirements can be met without the SBPP, The CAISO is a non profit public benefit corporation chartered under the laws of the State of California for the purpose of operating and maintaining the reliability of the statewide electric transmission grid, The reliability of the transmission grid is dependent on a number of specific power plants located in specific areas, SBPP is, in fact, critical to maintaining the reliability of the San Diego area, In order to remove the RMR designation from SBPP, the Califomia ISO must find that reliability requirements can be met without SBPP units, In May 2007, San Diego Gas & Electric ("SDG&E") entered into an agreement with the operator of the SBPP to fill SDG&E's Local Capacity Area Resource requirement needs as mandated by the California Public Utility Commission (CPUC). This agreement runs through December 31, 2009 and l 151 Blue RavioeRoad i FOI50m.CA9S630~ r~391.4400 Mayor Cox January 2B, 200B Page Two will secure all of the 704-megawatt capacity from the SBPP to the region. Although this agreement will provide SDG&E more flexibility over the operation of the facility and will ensure that the output from the plant is available to the CAISO to support the local area needs, the CAISO concluded that continued RMR designation was required in order to ensure availability of the resource to meet local reliability needs. The CAISO is aware of the widespread interest that exists to see SBPP decommissioned and has been in discussions with SDG&E about the requirements necessary to remove the SBPP'S RMR designation. In order to remove the RMR designation, there are a number of modifications to the transmission and/or generation infrastructure that must happen first to ensure that local area reliability is maintained. Three projects are underway to meet this local area reliability requirement. First, with respect to the need for new resources, construction of the Otay Mesa Energy Center is currentiy underway. Second, SDG&E has filed an application with the CPUC to construct the Sunrise Powerlink Transmission Project that will enable SDG&E to substantially improve system reliability and provide access to renewable resources. Third, SDG&E has recently executed contracts with two developers for new peaking generation resources in its service territory. . From the CAISO's perspective, at least two out of three of these major modifications must occur before the RMR designation at the SBPP can be removed. In addition to these modifications, the new Silvergate 230 kV substation and its related upgrades (scheduled for December 200B) as well as the new Baja Norte natural gas interconnection (scheduled for January 200B) must both be in service. Given that the Otay Mesa Energy Center is under construction, the future addition of Sunrise Powerlink would satisfy the requirements for removal of RMR designation at SBPP. If Sunrise is delayed or not constructed, additional new peaking generation will be required within SDG&E's service territory. The amount of new capacity would be based on the CAISO's existing grid reliability standards, which are analyzed each year. Based on the current status of the previously noted projects, the RMR designation at the SBPP could be removed as eariy as 2010. However, delays in construction of the Sunrise Powerlink, lack of sufficient new peaking capacity, or delays in the in- service dates in implementing the new Baja Norte natural gas interconnection, would clearly delay this date. Once the RMR designation is removed, there should be no CAISO-related impediment to retiring and decommissioning SBPP. - 11-10 Mayor Cox January 28, 2008 Page Three I trust that this sheds some light on the California ISO's role in determining the generation and transmission infrastructure necessary to ensure grid reliability and its analysis of local reliability needs related to the SBPP. If you have additional questions, please call All Chowdhury, Director of Regional Transmission South, at (916) 608-1113. Sincerely, l(: ~~ ~ Yakout Mansour President & CEO cc: Ali Chowdhury (CAISO) Mike Niggli (SDG&E) Steve Castaneda (City of Chula Vista) David Garcia (City of Chula Vista) Scott Tulloch (City of Chula Vista) ........... Michael Meacham (Conservation & Environmental Services) 11-11 11125/08 Council Agenda Item #11 FOR IMMEDIATE RELEASE PRESS RELEASE Media Contact: Terrie Prosper, 415.703.1366, news(W,cpuc.ca.gOv Docket #: A.06-08-010 CPUC PRESIDENT RELEASES ALTERNATE PROPOSED DECISION IN SUNRISE PROCEEDING SAN FRANCISCO, November 18, 2008 - The California Public Utilities Commission (CPUC) today released an Alternate Proposed Decision by President Michael R. Peevey that approves San Diego Gas and Electric Company's (SDG&E) construction of the 1 50-mile Sunrise Powerlink Transmission Project in order to meet renewable power goals. President Peevey's Alternate Proposed Decision approves the Final Environmentally Superior Southern Route for the line in order to deliver renewable generation that would otherwise remain unavailable. "It is well recognized that the lack of transmission is the single biggest barrier to meeting renewable power goals and thus lowering greenhouse gas emissions," said President Peevey. "My Alternate Proposed Decision clears the way for a new renewable energy superhighway, allowing us to tap into the Imperial Valley's rich renewable resources without delay or unnecessary barriers." President Peevey's Alternate Proposed Decision follows Governor Schwarzenegger's Executive Order, signed yesterday, committing to increase the state's renewable energy goal to 33 percent by 2020 and clear the red tape for renewable projects. "Investors are lining up to pour hundreds of millions of dollars into developing the Imperial Valley's renewable potential, bringing high-paying new jobs to the region and clean energy to all Californians," said President Peevey. "But before they can break ground they need to know that they will be able to move the energy to market." President Peevey's Alternate Proposed Decision finds that the line will generate net benefits of over $125 million per year and is the best way to meet the Governor's goals of achieving greenhouse gas reductions through renewable procurement at 33 percent levels in the shortest time possible. "It is important to look at this issue ITom a statewide, long-term perspective," said President Peevey. "I believe my Alternate Proposed Decision will facilitate CPUC policy to achieve greenhouse gas reductions in the shortest time possible with the greatest economic benefits." President Peevey's Alternate Proposed Decision will be considered by the CPUC's five Commissioners along with two other proposals: an Administrative Law Judge Proposed Decision that denies the Sunrise application and an Alternate Proposed Decision sponsored by Commissioner Dian M. Grueneich that approves, with conditions, the Southern Route for Sunrise. President Peevey's Alternate Proposed Decision is available at: http://docs.cpuc.ca.gov/efile/ALT/93956.pdf. Parties may file comments on President Peevey's Alternate Proposed Decision. The CPUC's first opportunity to vote on the three proposals is December 18, 2008. For more information on the CPUC, please visit WWW.CDuc.ca.gQv.