BILL ANALYSIS
SB 1059
Page 1
Date of Hearing: June 26, 2006
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Lloyd E. Levine, Chair
SB 1059 (Escutia) - As Amended: May 16, 2006
SENATE VOTE : 34-1
SUBJECT : Electric transmission corridors.
SUMMARY : Authorizes the California Energy Commission (CEC) to
designate electric transmission corridor zones (TCZ), according
to a specified process, in which high-voltage electric
transmission lines may be built in the future. Specifically,
this bill :
1)Defines a TCZ as the geographic area necessary to accommodate
the construction and operation of one or more high-voltage
electric transmission lines typically no more than 1,500 feet
in width, with specified exceptions.
2)Permits the CEC to designate a TCZ on its own motion or by
application of a person, if the TCZ is consistent with the
needs and objectives set forth in the CEC's strategic plan
adopted for the state's transmission grid and included in the
Integrated Energy Policy Report (IEPR).
3)Designates the CEC as the lead agency for all TCZs under the
California Environmental Quality Act (CEQA).
4)Requires the CEC to confer with and coordinate with other
jurisdictions to identify long-term transmission needs of the
state.
5)Identifies actions and timelines which the CEC must abide by
regarding designating a TCZ, including holding public
hearings, receiving comments, soliciting information, and
conducting commission prehearing conferences and hearings.
6)Requires the CEC to regularly review and revise its TCZs as
necessary, and not less frequently than once every 10 years.
7)Requires each city or county to consider the designated
corridor when making a determination regarding a land-use
change within or adjacent to a TCZ that could affect the
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viability to accommodate a transmission line planned within
the corridor.
EXISTING LAW :
1)Requires the California Public Utilities Commission (PUC) to
certify the public convenience and necessity of a transmission
line before an investor-owned utility (IOU) may begin
construction (Certificate of Public Convenience and Necessity,
or CPCN). The CPCN process includes environmental review of
the proposed project under CEQA. The CPCN confers eminent
domain authority for construction of the project.
2)Requires the CEC to assess electricity infrastructure trends
and issues facing California and develop and recommend energy
policies for the state to address and resolve such issues as
part of its biennial IEPR.
3)Requires the CEC to adopt a strategic plan for the state's
electric transmission grid by November 1, 2005, which
recommends actions required to implement investments needed to
ensure reliability, relieve congestion, and meet future growth
in load and generation.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, the purpose of this bill is
to provide direction on electric transmission infrastructure and
to coordinate planning and permitting transmission projects
which is currently divided between a multitude of federal,
state, and local agencies, as well as private corporations, who
either own or manage pieces of the transmission grid.
1) Background : About 75% of the state's transmission grid is
owned by the IOUs. The California Independent System Operator
(CAISO), a not-for-profit public benefit corporation, is charged
with operating the IOUs' transmission grid and managing the flow
of electricity. (The CAISO also operates municipal utility's
transmission lines that have requested that service from CAISO.)
The CAISO plans for and recommends transmission projects within
its control area by soliciting information from the transmission
owners. The CAISO works with a variety of stakeholders and
performs engineering and economic studies on proposed projects
to determine the potential benefits.
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The CAISO provides the transmission plans to the Electricity
Oversight Board (EOB) for review. The EOB is statutorily
directed to provide oversight of the CAISO. The EOB conducts
reviews and monitors CAISO operations, and the CAISO's wholesale
markets and transmission grid services. The EOB participates on
behalf of California in western interstate regional market
monitoring and transmission structures and evaluates the CAISO
plan to ensure coordination. Because the Federal Energy
Regulatory Commission (FERC) authorizes the CAISO tariffs, the
EOB initiates regulatory actions and interventions when
necessary at the FERC to protect California consumers at
proceedings regarding electricity transmission, including cases
that set rates for use of the transmission grid. Due to the
EOB's participation in the western interstate regional
transmission structures and its oversight of the CAISO wholesale
transmission grid, the committee may wish to add the EOB to the
list of entities from which the CEC would request comments on
the suitability of the proposed TCZ.
The responsibility for actually building the transmission lines
lies with the transmission-owning utilities. Most of these
utilities need to obtain approval from the PUC before they can
construct new transmission lines. The PUC conducts a public
hearing process and issues a CPCN if it deems the project is
warranted. The utilities must then initiate a filing at the
FERC to request cost-recovery for both inter- and intra-state
transmission lines.
A significant share of the state's transmission grid is owned by
municipal utilities and outside the jurisdiction of the ISO or
the PUC. Similar to IOUs, municipal utilities possess eminent
domain authority to acquire rights-of-way for transmission
lines.
2) An integrated policy: The CEC's 2003 IEPR claims that the
state's bulk transmission system needs major upgrades and
improvements. The CEC says there's a gap between its policy
documents and the utilities' construction of high-voltage
transmission lines. The CEC claims that no one is identifying
the corridors needed for future transmission lines, nor is
anyone protecting these pathways from encroachment by
development.
In response to the fact that no specific state agency was
charged with planning for the future of the transmission system
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as a whole, SB 1565 (Bowen) (Chapter 962, Statutes of 2004) was
enacted to require the CEC to develop a strategic transmission
plan that recommends actions required to implement investments
needed to ensure reliability, relieve congestion, and to meet
future growth in load and generation. The strategic plan was
required to be included in the IEPR adopted on November 1, 2005.
As part of the SB 1565 process, the CEC identified and
evaluated potential transmission corridors to accommodate future
siting and construction of needed transmission lines. The CEC
transmission plan is only a recommendation and does not possess
the authority to formally designate such corridors to ensure
that they will be available when needed. The CEC plan
recommended legislation to give it authority to formally
designate TCZs, which led to this bill.
3) The federal TCZ planning process : The federal Energy Policy
Act of 2005 directs the Secretaries of federal departments,
including Energy, the Interior, and the Bureau of Land
Management to review, designate, and adopt major energy
corridors across 11 states. The goal is to avoid time-consuming
project-by-project reviews. Federal energy regulators also were
given authority to designate power lines in the national
interest, which would allow them to overrule federal agencies or
states or counties that withhold approval for segments of
projects.
The Energy Policy Act also provides the FERC with authority to
permit transmission projects which relieve transmission
congestion of national interest under certain conditions. If
states with permitting authority take longer than one year to
act after the application is filed or the state imposes
conditions on a proposal such that it will not significantly
reduce transmission congestion or it is not economically
feasible, the FERC can pre-empt the state and authorize a
permit.
This bill would require the CEC to immediately notify affected
cities, counties, state and federal agencies, California Native
American Tribal governments in the jurisdiction of the TCZ.
Within 45 days of receipt of the application, the CEC must
commence public informational hearings. Within 155 days of the
final informational hearing, the CEC is required to conduct a
prehearing conference. Within 15 days of the prehearing
conference, the CEC is required to issue a hearing order and
conduct hearings. After the conclusion of hearings and no later
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than 180 days after certification of the environmental impact
report, the CEC is required to issue a proposed decision.
4) Relationship to PUC process : Just as a local zoning
ordinance does not approve specific developments, the
designation of a TCZ pursuant to this bill would not constitute
approval in whole or in part of any specific transmission
project, nor would TCZ designation substitute for any of the
federal, state or local permits required to construct a
transmission line itself. Similarly, designation of a TCZ would
not give eminent domain authority to a project proponent, or
justify condemnation of specific properties necessary to
accommodate the construction of a transmission line. Those
procedures follow an application to construct a transmission
line with the relevant permitting agencies, like the PUC and
others, and not the CEC.
The PUC is opposed to this bill because currently the PUC is the
lead agency in the siting of all transmission lines and
substations for applications submitted by the IOUs. The PUC is
concerned that this bill would confuse and complicate this
arrangement by turning aspects of the siting of transmission
lines over to the CEC by allowing applicants to apply directly
to the CEC for transmission corridor designation, and by
requiring the CEC to be the lead CEQA agency.
5) NIMBY : The PUC is concerned that the bill's definition of
high-voltage transmission lines, defined as "at least 200
kilovolts or that is under the operational control of the
CAISO," is too broad and could affect more local jurisdictions
than may be necessary. The PUC believes that a worthwhile
effort to designate TCZs should focus on the need for very
large-scale transmission, such as lines with an operating
capacity of at least 500 kilovolts. Under this definition, all
large transmission lines, such as Sunrise, Devers-Palo Verde,
and the renewable resources transmission lines (Tehachapi, all
Phases) would qualify.
This bill would require the CEC to confer with cities and
counties, federal agencies and California Native American tribal
governments to identify appropriate areas within their
jurisdictions that may be suitable for a TCZ. These entities
would likely propose to minimize the extent of TCZ designation
in their jurisdictions, which may have a policing effect that
could impose a level prudence when designating corridors. As
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such, increasing the threshold may not be necessary; however,
the committee may wish to define high-voltage transmission as a
line that is not for the purposes of distribution to ensure the
TCZs are only designated for high-voltage transmission.
The original version of this bill provided the CEC with the
authority to pre-empt local land-use authority via the
designation of a TCZ. It required the affected cities and
counties to integrate the TCZ designations into their general
plans and specific plans. The author amended the bill to
require the each city or county to "consider the designated
corridor when making a determination regarding a land-use change
within or adjacent to the corridor that could affect its
continuing viability to accommodate a transmission line planned
within the corridor." This amendment addressed the local
jurisdictions' concerns and they are no longer opposed.
RELATED LEGISLATION:
AB 974 (Nunez) requires the PUC to streamline the transmission
permitting process by eliminating regulatory overlap and
duplication, reducing review time, and expediting review of
projects with designated transmission corridors. This bill will
be heard in Senate Committee on Energy, Utilities &
Communications on June 27, 2006.
REGISTERED SUPPORT / OPPOSITION :
Support
Governor's Office (sponsor)
Sempra Energy
Opposition
California Public Utilities Commission
Analysis Prepared by : Gina Adams / U. & C. / (916) 319-2083