PROJECT DESCRIPTION AND LOCATION

Pursuant to California Public Utilities Code Section 1001, the CPUC General Order (GO) 131-D and the CPUC's Rules of Practice and Procedure, San Diego Gas & Electric Company (SDG&E) submitted an Application for a certificate of public convenience and necessity (CPCN) for the proposed Valley-Rainbow 500 kV Interconnect Project (Application No. 01-03-036, filed on March 23, 2001). The Valley-Rainbow 500 kV Interconnect (Project) is proposed to provide an interconnection between SDG&E's existing 230-kilovolt (kV) transmission system at the proposed Rainbow Substation on Rainbow Heights Road near the unincorporated community of Rainbow in San Diego County and Southern California Edison's (SCE) existing 500kV transmission system at the Valley Substation on Menifee Road in the unincorporated community of Romoland in Riverside County. The Project Area is in northern San Diego County and western Riverside County (Figure 1).

Figure 1 Project Area

The major elements of the Project are described below and illustrated on Figure 1:

500kV Transmission Line - A new single-circuit 500kV transmission line, rated at approximately 1,000 megawatts (MW), would interconnect the new SDG&E Rainbow Substation with SCE's existing Valley Substation. The right of way would be 170 feet wide (typical).

New Rainbow Substation - A new SDG&E 500/230/69kV substation would be located in northern San Diego County to interconnect the new 500kV transmission line with SDG&E's existing 230kV and 69kV transmission systems.

Valley Substation Modifications - SCE's existing Valley Substation would be modified to accommodate the new 500kV transmission line from the Rainbow Substation. All proposed modifications would occur on existing utility-owned land within the existing facility boundaries.

Talega - Escondido 230kV Line Upgrade - The 230kV line was originally licensed and constructed using double-circuit structures with only one circuit installed. Necessary transmission upgrades to support the Project import capability would include installing the second 230kV circuit on the existing transmission structures and modifying the existing substations at Talega and Escondido.

Rebuild of 69kV Transmission Line - A 7.7-mile section of the existing 69kV transmission circuit, currently installed on one side of the existing double-circuit Talega -Escondido 230kV transmission line structures and interconnecting SDG&E's existing Pala and Lilac substations, would be rebuilt on new 69kV structures. The 7.7-mile line, supported on wood and steel pole structures, would be constructed adjacent to the existing 230kV line along this section to allow installation of the 69kV circuit. The new section of the 69kV circuit would be constructed within the existing 300-foot-wide Talega - Escondido right of way.

System Voltage Support - A 230kV Static Synchronous Compensator (STATCOM) would be added at the existing Mission Substation. Shunt capacitors would be added at Miguel and Sycamore Canyon substations (230kV). The STATCOM would provide dynamic voltage support, and the shunt capacitors would provide continuous voltage support. Both continuous and dynamic voltage support would be required to allow the increased power import levels provided by the Project. The STATCOM and shunt capacitors would be installed at existing substations owned by SDG&E.

CONSTRUCTION SCHEDULE

SDG&E's general construction schedule for the proposed Project anticipates start of construction in 2002 with completion and operation by 2004.

PROJECT PURPOSE, OBJECTIVES AND NEED

The San Diego County and Southern Orange County regional economies have expanded rapidly and are placing increased demands on that area's transmission system. The ability of the existing transmission system to reliably meet near term requirements is uncertain without the addition of significant regional transmission or generation. The existing transmission system also limits the ability of new generation within the San Diego County region and to the southwest from being useful in mitigation of current supply problems within California. The proposed Project will provide the transmission capacity necessary to reliably meet regional loads should regional internal generating capacity be insufficient to meet regional demand and will also provide necessary export capability to the north for excess local generation, thus helping resolve the State's energy problems.

In addition to the above short-term benefits, long range transmission plans under development by the California Independent Systems Operator (CAISO) for the Southern California region indicate a potential need for development of additional transmission capacity into the San Diego region from the Southwest. In order for this new capacity to be useful in meeting the overall needs of the State, it will be necessary to increase current transmission transfer capability from the San Diego region to the remainder of the state. The proposed Project would therefore provide a critical element in meeting the overall needs of the State.

ENVIRONMENTAL EFFECTS

Based on the Initial Study/Environmental Checklist (see attached), review of documents submitted by SDG&E and other parties to the CPUC's CPCN proceeding, the CPUC and BLM have determined that the proposed Project may have a number of potentially significant environmental effects. The CPUC and BLM have determined that an EIR/EIS be prepared to fully analyze the existing environmental setting, the potential impacts resulting from Project implementation, and potential mitigation measures, if necessary, in the following areas: Biological Resources, Cultural Resources, Land Use, Visual Quality, Public Health, Safety and Nuisance, Traffic, Noise, Air Quality, and Hydrology/Water Quality.

The following is a brief description of the environmental effects to be addressed in the EIR/EIS:

1. Biological Resources

Construction and operation of the proposed Project could result in impacts to plant and animal life including but not limited to endangered, threatened, or rare species and/or their habitats.

1. Cultural Resources

A number of cultural resources sites are known to exist in the Project area, and therefore, Project construction could impact areas with archaeological and historical resources, as well as sites with Native American values.

1. Land Use

The EIR/EIS will address any instances of potential disruption of existing as well as planned land uses including residential, business, recreational uses and agriculture, as well as impacts to adopted environmental plans or policies (e.g., biological mitigation programs).

1. Air Quality

Short-term emissions of pollutants generated by Project construction would contribute to violations of state or federal air quality standards.

1. Noise

Construction and operational activities would increase noise levels for adjoining areas.

1. Traffic

Construction and/or operation-related traffic for the proposed Project would not create a substantial impact on traffic volumes. However, construction may temporarily affect traffic patterns and result in temporary traffic hazards. Therefore, the EIR/EIS will specifically address impacts to the following:

1. Closing access to any individual property
2. Closing a road and not providing an alternative route
3. Routing construction vehicles (heavy trucks) along residential streets
4. Changing traffic patterns in such a way that congestion and delay are increased on street segments or at intersections.

1. Hydrology/Water Quality

Construction of the Project may result in substantial erosion, affect drainage patterns, surface runoff rates and water quality.

1. Public Health, Safety and Nuisance

The EIR/EIS will address relevant concerns of the public with respect to health, safety and nuisance, focusing in three areas: electric magnetic fields (EMF), the safety of high voltage electric facilities, and radio, televison, or electric interference.

1. Visual Resources

The proposed 500 kV Interconnect transmission line as well as the proposed new SDG&E 500/230/69 kV substation to be located in northern San Diego County would affect the character and views in the Project study area.

MANDATORY DISCUSSION

In addition to the aforementioned issues, the following areas will be addressed in the EIR/EIS: Growth Inducement, Significant Irreversible Changes, Cumulative Impacts and Alternatives.

1. Alternatives

The alternatives discussion will describe the process employed to derive alternatives that are capable of meeting the stated Project's purpose and need and that are technically, economically and environmentally feasible. The alignments and alternatives originally studied by SDG&E, as well as those identified during review of SDG&E's application and as requested during public scoping will be discussed. Alternatives identified for inclusion into the EIR/EIS are listed below. The evaluation of other alternatives for inclusion in the EIR/EIS will consider their ability to achieve Project objectives, technical and economic feasibility, compatibility with public concerns, and ability to reduce identified significant environmental impacts.

The "No Project" Alternative will be analyzed as required.

SDG&E's Route E. As a possible alternative to SDG&E's proposed Valley to Rainbow 500 kV Interconnect route, the EIR/EIS will evaluate SDG&E's Route E. This route differs from the proposed route only on the southern seven to nine miles as it would travel east of the proposed Rainbow Substation south of the southern boundary of the Pechanga Indian Reservation. The route would turn north along the eastern boundary of the Pechanga Indian Reservation, which is also the western boundary of the Agua Tibia Wilderness and the Cleveland National Forest. The route would then pass to the west side of the Agua Tibia Wilderness Study Area, which is managed by the BLM for possible inclusion into the National Wilderness System. The route would continue north and turn to the northeast to cross Highway 79 before turning north across undeveloped lands where it would join the SDG&E's proposed route.

Pala Substation Site. As an alternative to the proposed Rainbow Substation site, the Pala Substation site north of Highway 76 on the San Luis Rey River, just west of the Pala Indian Reservation will be evaluated in the EIR. An additional 4.4 miles of 500kV transmission line within an existing 300-foot wide right of way would be required if the Pala Substation site were to be selected over the Rainbow Substation site. The site is an existing 160-acre parcel, most of which is currently being used as a citrus and avocado orchard.