0000004162.00000 Advice 4162-E
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Gary A. Stern, Ph.D. Managing Director, State Regulatory Operations February 11, 2020 ADVICE 4162-E (U 338-E) PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION SUBJECT: Request by Southern California Edison Company for Approval to Grant an Easement to Daggett Solar Power 1, LLC, a Delaware Limited Liability Company PURPOSE Southern California Edison Company (SCE) respectfully requests an order from the California Public Utilities Commission (Commission) authorizing SCE to grant to Daggett Solar Power 1, LLC, a Delaware limited liability company, its successors and assigns (collectively, “DSP1”), an easement for electric transmission lines (the “Easement”) on land owned by SCE in the County of San Bernardino, California (the “Property”) pursuant to Public Utilities Code (PUC) Section 851 and General Order (GO) 173.1 The form of the grant of the Easement is attached hereto as Exhibit A. BACKGROUND SCE owns land, buildings and other facilities in connection with its provision of electric services to its customers in southern and central California. The fee parcels that SCE owns include the Property. A portion of SCE’s Coolwater-SEGS-Tortilla 115kV interconnection transmission line is sited on the Property. The Property consists of three continguous land parcels that collectively total 394.79 acres. It is located in the Mojave Desert at the northeast quadrant of Santa Fe Road and Daggett Yermo Road approximately two miles outside the unincorporated town of Daggett, California. It is used as a utility right-of-way. The Property is located east of the site of SCE’s former Coolwater Electric Power Plant. It is bordered by Santa Fe Road to the south, the Mojave River to the north, the Sunray Energy 2 solar generation facility and private farms to the east and a Burlington Northern Santa Fe railroad track to 1 GO 173 makes permanent the former pilot program regulations for PUC Section 851 advice letters, as adopted or amended in the Commission Resolutions ALJ-186, ALJ-202, ALJ-244 and ALJ-272 (PUC Section 851 Pilot Program). The General Order authorizes regulated utilities to request Commission approval of PUC Section 851 transactions transferring interests in utility property valued at $5 million or less by advice letter. P.O. Box 800 8631 Rush Street Rosemead, California 91770 (626) 302-9645 Fax (626) 302-6396 ADVICE 4162-E (U 338-E) - 2 - February 11, 2020 the west. The Property is primarily vacant but is improved with SCE’s facilities and a paved roadway. DSP1, a subsidary of Clearway Energy Group, LLC, is seeking the Easement to support its Daggett Solar Power Facility (the “Project”). The Project is a 650 MW photovoltaic solar power generating facility, including 450 MW of battery storage. DSP1 will be constructing 115 kV and 220 kV interconnection transmission lines on the Easement, connecting the Project to SCE’s Coolwater substation. The Easement is approximately one hundred twenty (120) feet wide and is in two strips: the first strip runs north and south and measures 1,263.24 feet in length, while the second strip runs east and west and measures 9,608.61 feet in length. SCE operations at the Property are compatible with the construction and use of the DSP1 transmission line, which will cross SCE’s facilities in one place. The Easement is being granted subject to SCE’s right to construct its utility facilities on the easement area, should that be necessary in the future, as long as such installations do not unreasonably interfere with the rights that DSP1 is being granted in the Easement. The Easement requires DSP1 to maintain its facilities and to indemnify SCE for all claims arising out of the exercise of the rights granted in the Easement. SCE believes that the proposed transaction provides a public benefit that is not adverse to the public interest because the proposed transaction will support the operation of the Project, which SCE believes will benefit the community and will have no effect on SCE’s ability to provide safe and reliable service to its customers at reasonable rates. INFORMATION AS REQUIRED UNDER RULES 3 AND 4 OF GO 173 Rule 3 Requirements SCE is permitted to submit this advice letter seeking Commission approval under PUC Section 851 because it believes it has satisfied the eligibility requirements set forth in Rule 3 of GO 173: 3a: The activity proposed in the transaction will not require environmental review by the Commission as a Lead Agency under California Environmental Quality Act (“CEQA”). San Bernardino County reviewed the Project (State Clearinghouse No. 2018041007) and adopted its Environmental Impact Report pursuant to a Notice of Determination filed with the County Clerk for San Bernardino County on September 23, 2019, which is attached hereto as Exhibit B. 3b: The transaction will not have an adverse effect on the public interest or on the ability of the utility to provide safe and reliable service to customers at reasonable rates. ADVICE 4162-E (U 338-E) - 3 - February 11, 2020 SCE believes that the granting of the Easement will not have an adverse effect on the public interest because the construction and operation of the proposed DSP1 transmission line will not diminish the safety or reliability of SCE’s electric systems’ operations. 3c: Any financial proceeds from the transaction will either be booked to a memorandum account for distribution between shareholders and ratepayers during the next general rate case or be immediately divided between shareholders and ratepayers based on a specific distribution formula previously approved by the Commission for that utility. The financial proceeds received by SCE from the proposed transaction will be allocated between SCE’s shareholders and ratepayers through the Gross Revenue Sharing Mechanism as described in SCE’s response to Rule 4e below. 3d: If the transaction results in a fee transfer of real property, the property does not have a fair market value in excess of $5 million. Not applicable because there is no fee transfer of real property. 3e: If the transaction results in the sale of a building, the building does not have a fair market value in excess of $5 million. Not applicable because no building is being sold in this transaction. 3f: If the transaction is for the sale of depreciable assets, the assets do not have a fair market value in excess of $5 million. Not applicable because the transaction does not involve the sale of depreciable assets. 3g: If the transaction is a lease or a lease-equivalent, the total net present value of the lease payments, including any purchase option, does not have a fair market value in excess of $5 million, and the term of the lease will not exceed 25 years. Not applicable because the transaction does not involve a lease. 3h: If the transaction conveys an easement, right-of-way, or other less than fee interest in real property, the fair market value of the easement, right-of-way, or other interest in real property, the fair market value of the easement, right-of-way, or other interest in the property does not exceed $5 million. The fair market value of the Easement has been valued at $17,300, as described in SCE’s response in Rule 4(i) below. ADVICE 4162-E (U 338-E) - 4 - February 11, 2020 3i: The transaction does not materially impact the ratebase of the utility. The value of this transaction will not materially impact SCE’s ratebase. 3j: If the transaction is a transfer or change in ownership of facilities currently used in regulated utility operations, the transaction will not result in a significant physical and operational change in the facility. There will be no physical or operational change in the SCE facilities on the Property. 3k: The transaction does not warrant a more comprehensive review that would be provided through a formal PUC Section 851 application. SCE believes that this transaction does not contain any issues that would trigger a need for a more comprehensive review through a formal PUC Section 851 application. Rule 4 Requirements Rule 4 requires that the following information be included in advice letters submitted under GO 173: 4a: Identity and addresses of all parties to the proposed transaction: Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, CA 91770 Daggett Solar Power 1, LLC c/o Clearway Energy Group, LLC 5780 Fleet Street, Suite 130 Carlsbad, CA 92008 Attn: James Kelly, Senior Director, Development 4b: A complete description of the property including present location, condition and use: The affected Property is located in the County of San Bernardino and consists of three continguous parcels. It is undeveloped desert land except for SCE’s facilities and a paved roadway. It is bordered by Santa Fe Road to the south, the Mojave River to the north, the Sunray Energy 2 solar generation facility and private farms to the east and Burlington Northern Santa Fe railtrack to the west. ADVICE 4162-E (U 338-E) - 5 - February 11, 2020 4c: Transferee’s intended use of the property: DSP1 will construct overhead electric interconnection transmission lines on the Easement. 4d: Complete description of financial terms of the proposed transaction: DSP1 will pay SCE $17,300 for the Easement. DSP1 will also pay all special assessments or fees levied against its improvements located on the Easement. 4e: Description of how financial proceeds of the transaction will be distributed: D.99-09-070 approved a settlement between SCE and the Office of Ratepayer Advocates (“ORA”) concerning SCE’s application for a revenue sharing mechanism for certain other operating revenue. The adopted Gross Revenue Sharing Mechanism allocates revenues resulting from non-tariffed products and services between shareholders and ratepayers.