May 11, 1994 Commission Decision Granting Certification

Project Manager: Gary Heath

Staff Counsel: Jeff Ogata

Hearing Officer: Gary Fay

Presiding Member: Commissioner Richard Bilas

Background

After SMUD's 913 MW Rancho Seco Nuclear Power Plant was closed by the voters in the June 6, 1989 election, SMUD conducted a competitive bidding and negotiation process with various powerplant developers in order to obtain replacement generation. In November 1991, SEPCO (Docket No. 92-AFC-2), Campbell Soup (Docket No. 93-AFC-3, Carson (Docket No. 92-SPPE-1), and Proctor & Gamble (Docket No. 93-AFC-2) were among the five local projects selected by SMUD for development.

SMUD also began to plan for its own natural gas line, which would provide fuel to the four cogeneration facilities listed above. The pipeline offered SMUD additional independence from PG&E, as SMUD-purchased natural gas could be delivered to SMUD powerplants through a SMUD pipeline. Control over its natural gas supply became an important SMUD objective, achievable through the SMUDGAS project.

The SEPCO Filing and Severance

When SEPCO, the first SMUD AFC, was submitted on September 3, 1992, SMUD’s pipeline planning remained incomplete. SEPCO initially had no fuel source, a significant data adequacy problem. On May 28, 1993, SMUD provided the fuel supply pipeline data for SEPCO that became the SMUDGAS filing.

The Energy Commission had jurisdiction over the SMUDGAS pipeline because it was appurtenant to SEPCO under the Public Resources code section 25120 definition of "thermal powerplant". However, SMUD was the pipeline applicant, not the SEPCO powerplant applicant, and SMUDGAS was intended to serve several facilities, not just SEPCO. SMUD therefore filed a motion on June 10, 1993, under section 1719 of the CEC regulations, to sever SMUDGAS from SEPCO.

CEC staff and SMUD negotiated a methodology for the severance, which was accepted by the Commission and reflected in their Order.

The Commission granted SMUD’s motion in a July 14, 1993 Order, which established two separate proceedings: SEPCO (Docket No. 92-AFC-2) and SMUDGAS (Docket No. 92-AFC-2P). However, as an appurtenant facility, the pipeline could not ultimately be licensed without a powerplant AFC. The July 14, 1993 Order therefore provided that SMUDGAS certification was contingent upon the prior or contemporaneous certification of either SEPCO, Proctor & Gamble, or Campbell, whichever occurs first. There could be no SMUDGAS construction without both a powerplant certification and CEC authorization of specific SMUDGAS segments serving individual powerplants. (Pages 1-3 of the CEC Decision.)

Project Description

The underground SMUDGAS pipeline was to be 64 miles long, starting from a connection north of Winters in Yolo County with the existing PG&E natural gas line. At the Carson-Ice Cogeneration Plant, there would be a second connection to the proposed Mojave Northward Expansion Project. SMUD could thus maximize its access to available natural gas at lower prices.

The main SMUDGAS transmission line (segment 1) would run 25 miles easterly into Sacramento, with 39 miles of lateral lines going to SEPCO (in the north, segment 2)) and Carson, Campbell, and Proctor and Gamble (located close together in the south, segments 3-6). (See Figure 3 on page 10 of the CEC Decision.)

Issues

CEC staff held approximately nineteen public workshops and site visits for SMUDGAS, leading to agreement with SMUD on all necessary mitigation measures, including proposed conditions of certification. The concerns of local governments and landowners in the area were also addressed. There were no disputed issues or adjudications in the SMUDGAS proceeding.

Adoption

The Commission Decision granting certification to the SMUD Cogeneration Pipeline Project was unanimously adopted on May 11, 1994, contemporaneously with approval of the SEPCO AFC, Docket No. 92-AFC-2. Thus, SMUDGAS was certified as an appurtenant facility to SEPCO, consistent with the Commission’s July 14, 1993 Order granting severance.

Neither SEPCO nor the SMUDGAS segment connecting to SEPCO have been constructed. All other portions of SMUDGAS were built.