ML020450394

Declaration of Garrett Timothy Grider in Support of Debtors Motion for Order Approving Construction of Tri-Valley Project

ML020450394
Person / Time
Site:	Diablo Canyon
Issue date:	01/24/2002
From:	Grider G Howard, Rice, Nemerovski, Canady, Falk & Rabkin, Pacific Gas & Electric Co
To:	Office of Nuclear Reactor Regulation, US Federal Judiciary, Bankruptcy Court, Northern District of California
References
01-30923 DM, 94-0742640
Download: ML020450394 (6)

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16 17 18 In re PACIFIC GAS AND ELECTRIC COMPANY, a California corporation, Debtor.

Federal I.D. No. 94-0742640 No. 01 30923 DM Chapter 11 Case Date:

February 8, 2002 Time:

2:30 p.m.

Place:

235 Pine St., 22nd Floor San Francisco, -California Judge:

Hon. Dennis Montali DECLARATION OF GARRETT TIMOTHY GRIDER IN SUPPORT OF DEBTOR'S MOTION FOR ORDER APPROVING CONSTRUCTION OF TRI-VALLEY PROJECT

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DECL. OF G. GR.DER ISO OF DEBTORS MOT. FOR APPROVING CONSTRUCTION OF TRI-VALLEY PROJECT WD 012402/1-1419948/gff'9694SVV4 JAMES L. LOPES (No. 63678)

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JEFFREY L. SCHAFFER (No. 91404)

SARAH M. KING (No. 189621)

HOWARD, RICE, NEMEROVSKI, CANADY, FALK & RABKIN A Professional Corporation Three Embarcadero Center, 7th Floor San Francisco, California 94111-4065 Telephone:

415/434-1600 Facsimile:

415/217-5910 Attorneys for Debtor and Debtor in Possession PACIFIC GAS AND ELECTRIC COMPANY UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 19 20 21 22 23 24 25 26 27 28

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9 10 11 12 HOVARD 13 S14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I, Garrett Timothy Grider, declare as follows:

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I am a Project Manager at Pacific Gas and Electric Company ("PG&E") of major transmission, substation and distribution projects. I have been employed by PG&E for over 20 years, 15 years of which were with project cost controls and 8 years in project management. I am the Project Manager for the Tri-Valley 2002 Capacity Increase Project

("Tri-Valley Project"). I make this Declaration based upon my personal knowledge of project management, project cost control, and upon my review of PG&E's records concerning the matters stated herein. If called as a witness, I could and would testify competently to the facts stated herein.

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The purpose of the Tri-Valley Project is to build electric transmission and distribution facilities to meet the projected electric demand in the cities of Dublin, Livermore, Pleasanton, and San Ramon, and in portions of unincorporated Alameda and Contra Costa Counties near these cities (collectively the "Tri-Valley area").

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The electric distribution system in the Tri-Valley area currently consists of both 12 kilovolt ("kV") and 21 kV systems. The 12 kV system is served off the 60 kV system and supplies the Vasco, Livermore, Radum, Parks and Sunol substations, which at peak conditions are loaded at capacity.

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The Tri-Valley area is currently served by both 230 kV and 60 kV transmission facilities. Nine 230 kV transmission lines run along the perimeter of the Tri Valley area with 230 kV distribution substations at San Ramon and Las Positas. Four 60 kV transmission lines run through the center of the Tri-Valley area and converge at the Vineyard and Radum 60 kV distribution substations. The 60 kV transmission facilities at peak conditions are currently operating at or above their maximum load-serving capability.

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Electric load in the Tri-Valley area is expected to double over the next 15 to 20 years, growing at a rate of 27 megawatts ("MW") per year, due to (in part) several major residential and commercial developments that currently are in the planning, approval, or construction phases.

DECL. OF G. GRIDER ISO OF DEBTOR'S MOT. FOR AUTH. TO CONSTRUCT TRI-VALLEY PROJECT WD 012402/1-1419948/gff'969452/v4 1

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To support the load growth, the California Independent System Operator

("ISO") has found that substantial additions to PG&E's transmission and distribution systems will be required to be in place by summer 2003 and 2004 to meet demand and ensure system reliability.

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PG&E has designed the Tri-Valley Project to solve the projected transmission and distribution deficiencies in the Tri-Valley area. The Tri-Valley Project is composed of a Northern and Southern Component.

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To complete the Northern Component of the Tri-Valley Project, PG&E will: construct two new 230/21 kV distribution substations, one in North Livermore and the other in North Dublin, along with the necessary distribution circuits; and construct approximately 8.2 miles of 230 kV double circuit transmission line (5.4 miles of underground and 2.8 miles of overhead) from the Contra Costa-Newark No. 2 circuit to the new distribution substations.

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To complete the Southern Component of the Tri-Valley Project, PG&E will: convert the Vineyard substation from 60 kV to 230 kV service along with constructing the necessary distribution circuits; and construct 5.7 miles of 230 kV underground double circuit transmission line from the Contra Costa-Newark No. 2 230 kV circuit to Vineyard substation.

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PG&E originally scheduled construction on the Tri-Valley Project to begin in June 2001 so that the Project would become.operational in June 2002. Due to delays in proceedings of the California Public.Utilities Commission ("CPUC"), the Tri-Valley Project currently is behind schedule. To meet the operational deadlines of summer 2003 and 2004, pre-constructio iIactivities must beginno later than March 1, 2002 and construction must begin'no laterthan June 1, 2002. If this Court-grants PG&E the authority to expend funds to

-.... construct the Tri-Valley Project, PG&E intends to start construction on June 1, 2002 on the "Vr/ai'd: substation,.August 1, 2002 on the North Livermore substation and June 1, 2003 on the North Dublin substation.

"DECL. OF G. GRIDER ISO OF DEBTOR'S MOT. FOR APPROVING CONSTRUCTION OF TRI-VALLEY PROJECT WD O1240211-14199481gff/969452/v4 1

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PG&E currently estimates that it will cost approximately $135.8 million to 2

construct the Tri-Valley Project. The overall Tri-Valley Project has an estimated negative 3

net present value ("NPV") of -$99.4 million (-$71.5 million for transmission cost 4

components and -$27.9 million for distribution cost components), and a present value of 5

revenue requirements ("PVRR") of $167.8 million ($120.7 million for transmission cost 6

components and $47.1 million for distribution cost components) over the 20-year study 7

period.

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If this Court grants PG&E the authority to expend funds to construct the 9

Tri-Valley Project, PG&E is expected to include the cost of the Tri-Valley Project's 10 transmission facilities in PG&E's base utility revenue requirements and seek authorization 11 by the Federal Energy Regulatory Commission ("FERC") to earn a rate of return on such 12 costs. PG&E is expected to include the cost of the Tri-Valley Project's distribution facilities Y

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in PG&E's base utility revenue requirement and seek authorization by the CPUC to earn a

'CAMM' 14 MR rate of return on such costs.

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In October 1999, PG&E's Board of Directors approved an appropriation of 16

$81 million to fund the Tri-Valley Project.

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In November 1999, PG&E submitted Application No. A.99-11-025 (the 18 "Application") to the CPUC for a Certificate of Public Necessity and Convenience (a 19 "CPCN") to construct the Tri-Valley Project.

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In January and February 2001, PG&E submitted written and oral testimony 21 of witnesses testifying to, among other things, the current and projected electric demand in 22 the Tri-Valley area, the need for the Tri-Valley Project to ensure system reliability under 23 state and federal standards, the proposed locations of the Project's transmission lines and 24 facilities, the estimated cost of construction based on the preliminary design and the PG&E 25 proposed locations for the Tri-Valley Project improvements, and the estimated costs of 26 various alternative Project routes being evaluated by the CPUC.

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On January 27,2000, the ISO Governing Board approved the Tri-Valley 28 DECL. OF G. GRIDER ISO OF DEBTOR'S MOT. FOR APPROVING CONSTRUCTION OF TRI-VALLEY PROJECT WD 012402/1-1419948/gff/969452/v4 vnfii. L-r LVVL

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Project as the preferred transmission alternative to address the identified reliability concerns on the ISO Grid,

17. In February 2001, the CPUC held several weeks of hearings regarding the Tri-Valley Project

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On July 24, 2001, the CPUC issued a proposed draft decision.

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On October 11, 2001, the California Public Utilities Commission ("CPUC")

7 issued Decision No. 01-10-029, which grants PG&E a CPCN to construct the Tri-Valley Project. Attached hereto as Exhibit A is a true and correct copy of Decision No. 0 1-10-029.

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To PG&E's knowledge, the CPUC has not granted a CPCN for any other 10 project to provide the electric transmission and distribution capacity required to serve the projected loads in the Tri-Valley area.

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On November 27, 2001, PG&E's Management Committee proposed to the S

13 Board of Directors authorization of updated capital expenditures in the aggregate amount of M0 14 15M

$135.9 million to construct the CPUC-approved Tri-Valley Project. On December 19,2001,

.15 the Board of Directors approved the revised capital expenditure amount, subject to 16 16 Bankruptcy Court approval.

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22. Attached hereto as Exhibit B is a true and correct copy of PG&E's 18 Application for Rehearing of Decision No. 01-10-029.

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23. As of the date hereof, the CPUC has not ruled on the Rehearing Application.

21' I declare under penalty of perjuryuwnder the laws of the United States of America 22 that the foregoing is true and correct. Executed this 240 day of January, 2002, at Walnut 23 Creek, California.

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26, Garrett Timro"...i.en 27 28 D)ECL. oP 0. GRIDER ISO OF D6-3TOR'S t'O POR APPROVINO CONSTRUCTION OF TKI-VALLEY PROJECT WD 013021l/96945v3 Exhibits are not attached to the service copies of this document.

You may obtain copies of the Exhibits in one of the following ways: through the "Pacific Gas & Electric Company Chapter 11 Case" link accessible through the Bankruptcy Court's website (www.canb.uscourts.gov), or by written request to Howard, Rice, Nemerovski, Canady, Falk & Rabkin, Attn: Racquel Lopez, Three Embarcadero Center, 7th Floor, San Francisco, California 94111-4065 WD 071801/I-1419901/gff/932202/vl