text: STATE OF CALIFORNIA ENERGY RESOURCES CONSERVATION AND DEVELOPMENT COMMISSION In the Matter of: ) Docket No. 97-AFC-1 ) Application for Certification ) for the High Desert Power Project ) ) COMMITTEE CONFERENCE California Energy Commission 1516 Ninth Street First Floor Hearing Room A Sacramento, California 95814 Wednesday, May 20, 1998 10:00 a.m. to 2:11 p.m. Reported and Transcribed by: Ramona Cota Capitol Electronic Reporting (916) 967-6811 2 A P P E A R A N C E S Commissioners Present: JANANNE SHARPLESS, Presiding Member ROBERT A. LAURIE Staff Present: STANLEY W. VALKOSKY, Chief Hearing Officer ROBERTA MENDONCA, Public Adviser ROSELLA SHAPIRO, Advisor to Commissioner Sharpless For the Staff of the Commission: RICHARD K. BUELL, Siting Project Manager CARYN J. HOUGH, Senior Staff Counsel TUAN NGO, P.E. ELLEN TOWNSEND-SMITH CHRISTOPHER TOOKER, Ph.D. For the Applicant: MICHAEL J. CARROLL, Latham & Watkins AMY CUELLAR, RMI ALLAN J. THOMPSON, Law Office of Allan J. Thompson ANDREW C. WELCH, P.E., High Desert Power Project LLC R.L. (RICK) WOLFINGER, High Desert Power Project LLC Capitol Electronic Reporting (916) 967-6811 3 A P P E A R A N C E S (C O N T I N U E D) For the Intervenor: MARC D. JOSEPH, Adams Broadwell & Joseph On behalf of California Unions for Reliable Energy (CURE) For the Public: OSCAR HELLRICH, Mojave Desert Air Quality Management District ALAN DE SALVIO, Mojave Desert Air Quality Management District Capitol Electronic Reporting (916) 967-6811 4 I N D E X Page Proceedings 5 Transmission Applicant 7 Staff of the Commission 8 Intervenor 9 Water Applicant 10 Staff of the Commission 17 Intervenor 24 Waste Treatment Applicant 34 Staff of the Commission 37 Intervenor 45 FAA Applicant 58 Staff of the Commission 59 Gas Pipeline Applicant 60 Staff of the Commission 64 Intervenor 73 Air Quality Applicant 87 Mr. Oscar Hellrich 90 Mr. Alan De Salvio 91 Staff of the Commission 98 Intervenor 101 Schedule Chief Hearing Officer Valkosky 106 Applicant 110 Staff of the Commission 110 Intervenor 111 Afternoon Session 87 Adjournment 117 Certification and Declaration of Transcriber 118 Capitol Electronic Reporting (916) 967-6811 5 1 P R O C E E D I N G S 2 WEDNESDAY, MAY 20, 1998 SACRAMENTO, CALIFORNIA 10:11 A.M. 3 COMMISSIONER SHARPLESS: Good morning, I'd like to 4 welcome you all to the Energy Commission's Committee 5 Conference on the High Desert Power Project. I'd like to 6 start with introductions. To my left is Commissioner -- 7 COMMISSIONER LAURIE: Moore. 8 COMMISSIONER SHARPLESS: Laurie. I'm sorry, Bob, 9 I'm having a little problem here this morning. Commissioner 10 Laurie. To his right is Stan Valkosky who is the Hearing 11 Officer for this project. I am the Presiding Member, Jananne 12 Sharpless, at least I remember my name. I'd like to go 13 through introductions of the parties starting with the 14 applicant and going around the table. Would you like to 15 start, please. 16 MR. CARROLL: Yes. Mike Carroll with Latham and 17 Watkins on behalf of the applicant. 18 MR. WOLFINGER: Rick Wolfinger, Project Manager, 19 High Desert Power Project. 20 MR. THOMPSON: Allan Thompson on behalf of the 21 applicant. 22 MR. BUELL: Rick Buell, Energy Commission Staff, 23 Project Manager. 24 MS. HOUGH: Caryn Hough, Staff Counsel. 25 MR. JOSEPH: Marc Joseph on behalf of the Capitol Electronic Reporting (916) 967-6811 6 1 California Unions for Reliable Energy. 2 COMMISSIONER SHARPLESS: Thank you very much. As I 3 said, this is one of the many Committee Conferences that we 4 have scheduled to look at the status and progress of this 5 project. This particular public conference was scheduled in 6 a notice that was Dated May 4th so hopefully you all received 7 that. 8 Today's conference will provide each party an 9 opportunity to inform the Committee on the status of the High 10 Desert case, including any potential delays; to update the 11 Committee regarding the status of information still needed 12 for the analysis of various topic areas; and third, discuss 13 out-scheduling and any other matters relevant to the 14 proceedings. We have our Public Adviser in the back of the 15 room, Roberta Mendonca, and she has blue cards for those of 16 you in the audience that would like to at some point in time 17 comment on any of the topics that we will be discussing 18 today. 19 In its May 4th Notice and Order the Committee 20 specified due dates for the submission of various information 21 and directed the parties to propose scheduling alternatives, 22 which would include completion of the analyses for various 23 topic areas. The Committee would prefer that the applicant, 24 then staff, then CURE summarize their concerns in each 25 individual topic area, then we'll have an opportunity to do a Capitol Electronic Reporting (916) 967-6811 7 1 round table discussion. 2 We will begin with the topic of Transmission 3 followed in turn by Water and then other topics including the 4 Department of Toxic Substance Control permits, the second 5 natural gas pipeline and finally Air Quality. We have 6 reversed somewhat from what we did the previous time. After 7 these topical areas are discussed each party will have an 8 opportunity to address the scheduling concerns. So unless 9 there are any other questions by the parties here we can 10 begin. Perhaps we can start with the applicant discussing 11 the status of the transmission study. 12 TRANSMISSION 13 MR. WOLFINGER: I'd like to ask Andy Welch my 14 Project Director, he was with Southern California Edison 15 yesterday, to address that. 16 MR. WELCH: Just briefly, the draft of that report 17 was finished and circulated internally at Edison, we're 18 hoping to submit that to the Docket on Friday of this week. 19 They're hoping to send that out to us -- to ship that out at 20 the close of business on Thursday. 21 COMMISSIONER SHARPLESS: If my recollection serves 22 me that was to have been out on, was it May 15th? 23 MR. WELCH: That was what they had targeted for but 24 they didn't make that. 25 COMMISSIONER SHARPLESS: So now the draft will be Capitol Electronic Reporting (916) 967-6811 8 1 out, did you say this coming Friday? 2 MR. WELCH: This Friday, yes, so they're one week 3 late. 4 COMMISSIONER SHARPLESS: Okay. So we have had a 5 week slippage? 6 MR. WELCH: Yes. 7 COMMISSIONER SHARPLESS: And that means that the 8 ISO is going to have a week less or a week more depending on 9 how the process works. 10 MR. WELCH: Right. I don't know how it is going to 11 impact them. They are roughly familiar with the study that 12 has been done but they do not have it yet. 13 COMMISSIONER SHARPLESS: Okay. So you're saying 14 that the ISO has indicated that they need two weeks, okay. 15 So we'll keep that in mind as we talk about the schedule. 16 Staff, do you have any additional comments on the 17 transmission? I think your status report said that sometime 18 in the first part of June you anticipated, if they were on 19 schedule, to be holding a workshop on Transmission. 20 MR. BUELL: Yes. Staff had previously discussed 21 with the parties a possible date for a workshop of June 9th. 22 Based upon the delay in receiving the interconnect study we 23 have proposed delaying that another week. It would probably 24 be advisable to allow the ISO to complete their review. I 25 had received an e-mail yesterday from the ISO indicating that Capitol Electronic Reporting (916) 967-6811 9 1 they still need two weeks to renew the interconnect study so 2 that would mean their analysis would not be available until 3 around June 6th, I believe. So it would be reasonable to 4 delay that workshop to allow others to review what the ISO 5 has concluded and have a productive workshop. 6 COMMISSIONER SHARPLESS: Fine, thank you. 7 MR. BUELL: One last thing I would like to iterate 8 is that the applicant should serve the interconnect study on 9 all the parties. 10 MR. WELCH: That's what we plan to do. 11 MR. BUELL: Okay. 12 COMMISSIONER SHARPLESS: Okay, fine. Right, the 13 interconnect study that will be coming out on Friday. We can 14 assume that perhaps all parties will be receiving it on 15 Friday the 22nd? 16 MR. WELCH: Well, it will be mailed to all parties 17 on Friday the 22nd. 18 COMMISSIONER SHARPLESS: Okay, fine. 19 MR. WELCH: And served on the Docket Office on that 20 day. 21 COMMISSIONER SHARPLESS: Okay, great. And let's 22 see. We have Mr. Joseph. 23 MR. JOSEPH: I have nothing further to add. We'll 24 work with the staff to schedule a workshop one week after we 25 had previously anticipated. Capitol Electronic Reporting (916) 967-6811 10 1 COMMISSIONER SHARPLESS: Okay, fine. Well, we knew 2 that one would be rather quick. Moving right along we'll go 3 to Water. Mr. Wolfinger, would you like to cover the water 4 issue? 5 WATER 6 MR. WOLFINGER: I believe on the 15th -- And I tell 7 you, the unfortunate part is none of us here on this side 8 have got actually what we submitted to you on the 15th 9 because it came out of another office and we haven't got our 10 copies. But I do believe we answered, I believe it was the 11 five questions on the water; is that right? We did? 12 MR. BUELL: Yes. 13 MR. WOLFINGER: We're working from our draft. 14 Basically there was a technical memorandum showing some 15 sensitivities of water draw-down, that will be out by the 16 22nd. We approved that, and in fact it went out yesterday to 17 Diane Gilchrist who then serves it on the Commission. 18 The models for the well draw-down were already 19 submitted and that was a request that was requested. The 20 annual consumption for the simple cycle, there seems to be -- 21 Although it's important it's a clarification. We don't use 22 that much water on simple cycle but we've given some 23 conflicting data and we'll have the correct data on the 22nd 24 on that. There was a question of the storage tank in the 25 draft water report. The consultant said we should have as a Capitol Electronic Reporting (916) 967-6811 11 1 surge a 1.4 million gallon surge tank. Our application that 2 we originally submitted had a 2.3 million gallon tank in 3 there and that 1.4 is included in that tank so we answered 4 that question. 5 We also answered the aspect of when the supply -- I 6 believe it was conditions for certification of -- Conditions 7 from the water supplier so that they could be included in the 8 certification. I have to say we're a little fuzzy on that 9 one and the reason for that was that we're still trying to 10 determine who actually is going to be the lead agency down 11 there. They haven't decided if it's going to be -- we're 12 going to get a group called the Victor Valley Economic 13 Development Authority, if they're going to be the lead agency 14 or if the Victor Valley Water District is going to be. 15 So we do agree that we do have to have the 16 conditions and some sort of a will-serve letter or some sort 17 of an obligation to supply water is going to be required 18 before we construct but at this point in time we're saying 90 19 days prior to the Energy Commission's scheduled certification 20 we'll have all the conditions at least lined up. 21 COMMISSIONER SHARPLESS: Can you go into a little 22 bit more detail about how they're going to resolve the lead 23 issue on water. Do you know anything more? 24 MR. WOLFINGER: Only in an anecdotal manner. We 25 were up with them yesterday and I think what it is is these Capitol Electronic Reporting (916) 967-6811 12 1 various agencies have got to get together amongst themselves 2 and decide. That's basically what is going to happen. We're 3 waiting for their direction to figure out -- And I think they 4 are still trying to determine which one of these agencies, 5 whether it's Mojave Water Agency, Victor Valley Economic 6 Development Authority or Victor Valley Water District, who 7 has got scopes of work and who should be doing what. I don't 8 think they have decided that amongst themselves yet. 9 COMMISSIONER SHARPLESS: Okay. I believe I read 10 somewhere, I don't know whether it was in your document or 11 perhaps staff's document, that Victor Valley Water District 12 was planning on holding or having a meeting on the water 13 issues. 14 MR. WOLFINGER: Yes. 15 COMMISSIONER SHARPLESS: Has that occurred? 16 MR. WOLFINGER: We are having -- Andy went up and 17 talked to them. Why don't we get Andy to -- He's been 18 dealing with it. Andy, why don't you come up and -- 19 MR. WELCH: We appeared at their board meeting 20 about two weeks ago and they asked us if we could do a 21 further presentation in detail of the water plan. They have 22 got a consultant that is looking into -- to verify the 23 numbers that we had submitted as part of that water plan and 24 they just wanted the opportunity for the board to hear the 25 discussion of those. Capitol Electronic Reporting (916) 967-6811 13 1 MS. SHAPIRO: When is that? 2 MR. WELCH: That's Tuesday. 3 COMMISSIONER SHARPLESS: The fact that they are 4 having this meeting, is that any indication that they might 5 be the lead? 6 MR. WELCH: No. I think that what they are is that 7 they would be the ones that would be potentially impacted by 8 the plan, whether they become the lead agency to supply us 9 water or they supply it through someone else. They had the 10 concerns. They just need to verify that we won't impact 11 their plans. 12 COMMISSIONER SHARPLESS: I guess what I'm 13 struggling with is I don't understand why there is an issue 14 on who is going to be the lead. 15 MR. WOLFINGER: The Victor Valley Economic 16 Development Authority is the organization that controls the 17 airport area and the base area. They have the franchise to 18 serve water, they have the service of water. The Victor 19 Valley Water District will supply water. The intent, at 20 least at this time, is for the Victor Valley Water District 21 to supply groundwater when we need groundwater and that the 22 Mojave Water Agency will supply Victor Valley Economic 23 Development Authority with state water project water when 24 we're taking state water project water. 25 The question is, though, Victor Valley Economic Capitol Electronic Reporting (916) 967-6811 14 1 Development Authority is more of just an intermediary in 2 supplying of local transmission of water within this base and 3 they're trying to decide if it's better for us to negotiate 4 directly with the Victor Valley Water District to the 5 conditions of how we're going to pay for the groundwater and 6 simply work it directly with them or we go through Victor 7 Valley Water District who then goes -- Victor Valley Economic 8 Development Authority who then goes to the Victor Valley 9 Water District and negotiates. 10 So the question is, do they want us to go directly 11 to these end suppliers, Mojave Water Agency and Victor Valley 12 Water District and negotiate directly with them, or do they 13 want to take it. And they haven't decided politically what 14 they want to do. 15 COMMISSIONER SHARPLESS: Well, what is the 16 decision-making process and what do you think the timing is? 17 Do they have to do this in a board meeting? Are they in 18 charge? Do they have a time frame? 19 MR. WOLFINGER: We did not -- I have not determined 20 if they -- They are all discussing it but it's simply a 21 matter of discussing amongst the parties. 22 MR. WELCH: It is board decisions on the part of -- 23 COMMISSIONER SHARPLESS: And they do understand the 24 difficulty that this puts you in, in terms of your schedule 25 here? In that as long as it takes them to sort through these Capitol Electronic Reporting (916) 967-6811 15 1 issues the longer your delay, the more difficult it makes it 2 for us to process this application. So I'm just wondering if 3 someone needs to know what the situation is to get moving on 4 this. 5 MR. WOLFINGER: The water plan that we have 6 submitted does detail where we're going to get the water, has 7 identified exactly where the water is coming from. It talks 8 about what the issues are. The question actually is where we 9 negotiate. It's much more in the neighborhood of financial, 10 what we're going to pay for it and how we're going to put it 11 in. From the standpoint of a CEQA process and that, I 12 believe we have submitted the information required to make a 13 decision. It's really now a matter of contractually how much 14 money we're going to pay for this or that. But I think the 15 water plan in order to come to a decision has been well 16 established by the applicant. 17 COMMISSIONER SHARPLESS: Well, I'm not sure that 18 that's going to be adequate, you know. 19 MR. WOLFINGER: Well, it may not be but -- 20 COMMISSIONER SHARPLESS: They're going to negotiate 21 what they are going to allow you to have. You have submitted 22 your proposal, right? What is the negotiation about, the 23 price of the water or what you're going to have? How much of 24 what you're going to have -- 25 MR. WOLFINGER: It's more -- Probably it's like -- Capitol Electronic Reporting (916) 967-6811 16 1 COMMISSIONER SHARPLESS: -- and what mitigation 2 measures. 3 MR. WOLFINGER: It's things like who is going to be 4 the lead agency that I talk to, actually, and then do I pay 5 for the infrastructure up front and then maybe an O and M 6 charge for them to pump water and move it or do they charge 7 me an annual fee of capacity? Do I pay as I use the water? 8 It's things like that that they haven't decided, you know. 9 Is Victor Valley Water District going to be a wholesaler to 10 VVEDA and I do this through VVEDA? Those are the questions. 11 The fact that the pipe is in the ground and the wells are 12 going to be where they are, that's established. 13 COMMISSIONER SHARPLESS: This is the way I see the 14 problem. 15 MR. WOLFINGER: Okay. 16 COMMISSIONER SHARPLESS: The problem is that in 17 order for us to issue a certification you have to meet all 18 the laws, orders, ordinances, rules, regulations of all 19 pertinent agencies. Water is a big issue in this area. The 20 negotiations will help determine how those rules, laws, et 21 cetera are going to be met. We know what your proposal is. 22 We know what you would like. But we don't know where the 23 negotiations are going to take you. That leaves a detail 24 that is important for us to have I think at the Final Staff 25 Assessment level, not later. Capitol Electronic Reporting (916) 967-6811 17 1 But I haven't heard from staff. I'm speaking as 2 one Commissioner who has been trying to stay on top of this 3 project who knows that she has to do an adjudicatory hearing, 4 who knows that she has to make her decisions based on a 5 record and I want the strongest record possible. Perhaps we 6 can go to staff on the water issues. Would you like to speak 7 on the water issues? 8 MR. BUELL: Yes. A couple of things. The first 9 one is that regarding -- There seems to be a miscommunication 10 with regard to what staff is requesting regarding the spread 11 sheet, a copy of a spread sheet that was number two listed in 12 our May 8th letter, on page six under Water Resources as a 13 data requirement. At the workshop, I believe it was on April 14 30th, we had talked about the applicant providing a copy of, 15 an electronic copy of the spread sheet that was actually used 16 to do the modeling. We were looking for that to be provided 17 in response to number two. Although the details of the 18 modeling were presented in the March 15th not all the 19 details, and specifically the fiscal -- 20 MR. WOLFINGER: That was the Excel sheet that 21 you're looking for? 22 MR. BUELL: Yes. 23 MR. WOLFINGER: Okay. 24 MR. WELCH: You did not receive a disk with that 25 data request filing? Capitol Electronic Reporting (916) 967-6811 18 1 MR. BUELL: I have not seen it yet. 2 MR. WOLFINGER: Not with the data -- 3 MR. WELCH: Back in March you didn't? 4 MR. BUELL: Not that I -- 5 MR. WELCH: I believe we submitted a disk with 6 that, at least we intended to. 7 MR. BUELL: We will check Dockets but I do not 8 recall seeing that. 9 MR. WOLFINGER: We think that the spread sheets 10 came with it. 11 MR. BUELL: Dockets a few times has not told me 12 about things that have come in so there is a possibility they 13 received it and I was unaware that we had received it. 14 COMMISSIONER SHARPLESS: Okay, so the only problem 15 is we have got to track down what happened to the stuff that 16 was sent. 17 MR. WELCH: Right. 18 COMMISSIONER SHARPLESS: Right. 19 MR. WOLFINGER: Let me know and we'll submit 20 another copy of the Excel disk. 21 MR. BUELL: Certainly. 22 MR. WOLFINGER: A copy of the disk then. 23 MR. WELCH: The reason that we didn't submit it 24 again is because we wanted to make clear that everything in 25 the March 15th submittal was consistent with the work that Capitol Electronic Reporting (916) 967-6811 19 1 was done for the water plan. 2 MR. BUELL: Okay, very good, we'll check on that. 3 The last item -- Actually, the last item that had to be 4 identified is number five on staff's list regarding Water 5 Resources. We had identified that the applicant should 6 provide will-serve letters that contain the conditions which 7 the various water agencies would place upon serving water for 8 the project. And we said that that should be provided prior 9 to certification and that we also said it would be ideally 10 provided prior to issuing the Final Staff Assessment. 11 In retrospect I think staff used the wrong word 12 when we said ideally. I think we concurred with Jan 13 Sharpless, Commissioner Jan Sharpless' characterization of 14 needing that prior to the FSA. That it is mandatory that we 15 have that information so that we can include in our FSA those 16 conditions that the agencies may want to place upon serving 17 water for this project and additionally to have a complete 18 understanding of the environmental impacts that would be laid 19 out in our Final Staff Assessment. So with that correction 20 we have no other comments on water. 21 COMMISSIONER LAURIE: Commissioner Sharpless, a 22 question on one point. 23 COMMISSIONER SHARPLESS: Yes, Commissioner Laurie. 24 I got it right. 25 COMMISSIONER LAURIE: On that, question, Mr. Buell. Capitol Electronic Reporting (916) 967-6811 20 1 Will-serves may in fact contain conditions to service; is 2 that right? 3 MR. BUELL: That is my understanding, yes. 4 COMMISSIONER LAURIE: And is it also your 5 understanding that those conditions may by themselves have an 6 environmental impact which must be analyzed? 7 MR. BUELL: Certain aspects, certain things that 8 those districts may require, yes, may result in environmental 9 consequences. 10 COMMISSIONER LAURIE: So is it staff's position 11 that CEQA mandates that the conditions in a will-serve be 12 analyzed as part of your CEQA analysis? 13 MR. BUELL: Yes. 14 COMMISSIONER LAURIE: If the applicant disagrees 15 with that I'd be interested in knowing that, thank you. 16 MR. WOLFINGER: We do. 17 COMMISSIONER LAURIE: You do? 18 MR. WOLFINGER: Disagree. 19 COMMISSIONER LAURIE: I would be most interested in 20 examining the issue. I think it's an important point. If it 21 is of -- If the timing is of concern to you I'd certainly be 22 most interested in the rationale behind your position. 23 MR. WOLFINGER: You want to talk about that now? 24 COMMISSIONER SHARPLESS: Yes, of course. 25 MR. WOLFINGER: Okay, okay. Our point is a will- Capitol Electronic Reporting (916) 967-6811 21 1 serve letter usually has an -- 2 COMMISSIONER LAURIE: I'm sorry, I did not intend 3 to take up the Committee's time at this point, unless you 4 wanted to, Commissioner Sharpless. I just wanted to make it 5 clear that it is clearly a legal issue and I wanted to make 6 sure all parties had an opportunity to submit at some point 7 argument. If you wanted to listen to it today I would be 8 more than happy to listen to it but I certainly don't need to 9 take the Committee's time today. 10 COMMISSIONER SHARPLESS: I'm going to let it stand 11 with the applicant. If the applicant feels that it can make 12 its argument today, please do so. 13 MR. WOLFINGER: Well, we made an argument basically 14 in the response and that is that will-serve letters sometimes 15 have very significant--in order to actually have them signed 16 and documented--very significant financial obligations. And 17 prior to our getting a certification deciding to go ahead we 18 think it is an undue burden on the project to actually have a 19 signed will-serve letter to incur those kind of obligation. 20 Because there is an obligation on the part of the 21 agency also to supply in a certain period of time and they 22 often will ask for money to be posted ahead of time, bonds, 23 things like this. And to the extent -- And I mention it in 24 the letter. To the extent that we are into significant, non- 25 cancelable obligations we think it's a burden on the project. Capitol Electronic Reporting (916) 967-6811 22 1 To the extent that we can enter into agreements or other 2 types of things that don't have predetermined obligations 3 prior to us receiving a certification from the State here to 4 build a plant and to go on ahead then I don't have as big a 5 problem with it. But that was my concern. 6 COMMISSIONER LAURIE: Well, I -- 7 COMMISSIONER SHARPLESS: Go ahead. 8 COMMISSIONER LAURIE: I'm sorry. 9 COMMISSIONER SHARPLESS: No, go ahead, Commissioner 10 Laurie. 11 COMMISSIONER LAURIE: Every will-serve letter that 12 I have ever seen, a thousand of them, basically say, we, the 13 below-signed district hereby indicate to you that we are 14 going to serve you water under these conditions, or, we will 15 assure the delivery of water under these conditions. Those 16 conditions may have an environmental impact attached to it, 17 which in my understanding needs to be analyzed as part of our 18 CEQA analysis. I'm not satisfied that a will-serve is a 19 legally binding document that binds you to do anything other 20 than informing you of the terms and conditions under which 21 you will receive a water supply. So if my understanding is 22 different than yours I'd be interested in knowing about it. 23 MR. WOLFINGER: Well, under your definition I don't 24 have a problem. Victor Valley Water District, when we talked 25 to them a year and a half ago--and I have to say the Capitol Electronic Reporting (916) 967-6811 23 1 management has changed in that period of time--was very 2 insistent that a will-serve letter was a legal obligation and 3 they required a lot of things of us. And that's what makes 4 me skittish in this environment. That I'm concerned that the 5 definition of a will-serve letter is going to require me to 6 get into an obligatory contract. And that's why I couched 7 my -- I don't -- Your kind of a will-serve letter -- But to 8 the extent that I have significant, non-cancelable 9 obligations the will-serve letters are really directed by the 10 water districts, not by -- 11 COMMISSIONER LAURIE: I understand. 12 MR. WOLFINGER: So I'm concerned about definition 13 in this. 14 COMMISSIONER LAURIE: What is staff's definition of 15 a will-serve? 16 MS. HOUGH: I think that we are focusing on perhaps 17 the wrong thing, which is the title of what the letter is. 18 What we need to is what conditions, under what conditions is 19 this project going to get water. If the district can tell us 20 that without a will-serve letter that's fine, if they can't 21 tell us that unless they have got a will-serve letter then 22 that is what we're going to need. But we need to be able to 23 look at the conditions that will apply to this project 24 receiving water and then analyze those and make sure that our 25 FSA analysis is consistent with those. Capitol Electronic Reporting (916) 967-6811 24 1 COMMISSIONER LAURIE: All right. 2 MR. WOLFINGER: I don't have a problem with that. 3 COMMISSIONER SHARPLESS: Good. It would probably 4 be well if at some point when the staff -- I know the staff 5 has some workshops set up. If you could pursue this issue to 6 find out precisely what kind of document we can get that has 7 the conditions in that. And if it is something other than a 8 will-serve letter that I think will serve the purposes. We 9 understand about the financial obligation. Commissioner 10 Laurie has a great deal of experience in permits and siting 11 in a county that has very difficult water problems so I yield 12 to his expertise in this area. 13 COMMISSIONER LAURIE: That experience comes despite 14 my extremely young age. 15 COMMISSIONER SHARPLESS: That too. Wrong place, 16 wrong time for Commissioner Laurie. Okay, Mr. Jacobs. 17 MR. JOSEPH: Thank you, Commissioner. 18 COMMISSIONER SHARPLESS: Mr. Joseph, sorry. Why 19 break my record today of screwing up everybody's name. 20 MR. JOSEPH: Our position on this is fairly similar 21 to the staff's position. I think we start out with the 22 proposition that there still is no firm water supply for this 23 project. Mr. Wolfinger said that, you know, the fact that 24 there will be wells and pipes on the ground is established. 25 Well, that is not established. Victor Valley Water District Capitol Electronic Reporting (916) 967-6811 25 1 is the one that can establish that, whether that will or will 2 not happen, and that hasn't happened yet. 3 Commissioner Laurie, as you pointed out, if they do 4 succeed in obtaining a secure supply of water, a firm supply 5 of water, there could well be environmental and socioeconomic 6 impacts with that, which the Commission has to analyze. The 7 Commission can't analyze the impacts of obtaining the water 8 supply and possible mitigation measures other than what the 9 water district suggests. The Commission may well decide that 10 there is going to be a significant impact due to the large 11 amount of use of fresh water in the desert and decide that 12 you need to look at mitigation measures such as dry cooling. 13 You need that information and the staff needs that 14 information to be able to do their assessment of impacts and 15 potential mitigation measures. 16 I think there is now general agreement that all of 17 the information and the security and the firmness of that 18 water supply is something I think we all agree on has to be 19 part of the analysis. But I think it's clear that whether or 20 not the letter is called a will-serve letter there has to be 21 a commitment for a firm water supply or you don't have a 22 solid record to proceed on. If that is widespread agreement 23 then I think we have an issue resolved in concept. 24 COMMISSIONER SHARPLESS: Thank you, okay. We're 25 not doing too badly today here, we're speeding right through. Capitol Electronic Reporting (916) 967-6811 26 1 HEARING OFFICER VALKOSKY: I just have two 2 questions. 3 COMMISSIONER SHARPLESS: Yes, I'm sorry. Stan. 4 HEARING OFFICER VALKOSKY: Mr. Buell, just to 5 clarify for my understanding. Aside from a missing disk do 6 you agree that applicant has submitted the information that 7 you requested concerning water? 8 MR. BUELL: There's the one item that will be filed 9 on Friday. 10 HEARING OFFICER VALKOSKY: Right, there are two 11 items that I believe are coming in on the 22nd. 12 MR. BUELL: Two items. 13 HEARING OFFICER VALKOSKY: But aside from those and 14 aside from the missing disk have they satisfied your 15 information requests? 16 MR. BUELL: I guess Caryn wants me to echo the need 17 for the will-serve letters or something that is functionally 18 equivalent to that as being one outstanding item -- 19 HEARING OFFICER VALKOSKY: Right. I believe the 20 understanding the Committee is proceeding on is that the 21 conditional parts of the will-serve letter are something that 22 have to be available for inclusion into the Final Staff 23 Assessment. 24 MR. BUELL: Right. 25 HEARING OFFICER VALKOSKY: At least that is my Capitol Electronic Reporting (916) 967-6811 27 1 understanding of it. 2 MR. BUELL: As has been tradition, staff would 3 prefer having that information submitted at least 45 days 4 prior to issuing the FSA. 5 COMMISSIONER SHARPLESS: Which information is 45 6 days before the FSA? 7 MR. BUELL: The will-serve letters or the -- 8 COMMISSIONER SHARPLESS: The equivalent. 9 MR. BUELL: The equivalent thereof, yes. 10 MS. HOUGH: The conditions. 11 HEARING OFFICER VALKOSKY: The conditions, yes. 12 COMMISSIONER SHARPLESS: Okay. 13 HEARING OFFICER VALKOSKY: I have one final 14 question. Mr. Wolfinger or Mr. Welch, in your submittal you 15 have got a sentence that I would really like explained to me. 16 I'll quote the sentence, it is on page three. And the 17 sentence reads: 18 "The project does not plan to enter into 19 a binding agreement prior to certification if 20 significant non-cancelable obligations are 21 incurred by the project." 22 Could you explain to me what that means. 23 MR. WOLFINGER: That was basically the conversation 24 I had with Commissioner Laurie here and that is, is that in a 25 previous conversation with the Victor Valley Water District Capitol Electronic Reporting (916) 967-6811 28 1 in order for us to sign -- before them being willing to sign 2 a will-serve letter which they felt was a binding, a legally 3 binding obligation to them, they require a potentially 4 posting of bonds or posting of money and doing things like 5 that. There was a financial obligation. 6 And they explained to me that that's what they 7 require, for example, of developers who were putting in a 60 8 home development and they got a will-serve letter. That 9 builder before he got a will-serve letter had to post the 10 money ahead of time, had to put the money into the account of 11 the Victor Valley Water District before they would provide 12 the will-serve letter. So that was my concern, is that at 13 that point in time they were espousing that same thing. 14 Before they supplied a will-serve letter they wanted to see, 15 you know, $5 million or whatever the case may be. And that 16 was -- That was the issue. 17 COMMISSIONER LAURIE: Did they explain the 18 reasoning for that? Is it that in order to provide the will- 19 serve they want to specifically dedicate a specified amount 20 of water supply? And that having been paid for -- That 21 amount is not yours if not paid for and then they have a 22 number of will-serves out there without a specific amount set 23 aside. Was that their rationale? 24 MR. WOLFINGER: This conversation occurred about a 25 year ago and to tell you truth I don't remember. I remember Capitol Electronic Reporting (916) 967-6811 29 1 we discussed some of those issues and they gave their 2 explanations but I don't remember the specifics. I do 3 remember that they were asking for some pretty significant 4 binding obligations and that's what I'm, you know, I'm 5 concerned about. 6 COMMISSIONER LAURIE: Basically you're telling us 7 that the district is telling you you're not going to get a 8 will-serve unless you put your money up. 9 MR. WOLFINGER: Well -- 10 COMMISSIONER LAURIE: Because only that way they 11 know you're serious. 12 MR. WOLFINGER: There was--and I say was because it 13 doesn't exist now--a group that ran that organization that 14 have since -- There's been a reelection, the general manager 15 is gone. I do not know and I have not -- Because this is 16 happening I don't know what the present feeling is of both 17 the management of the Victor Valley Water District and the 18 Board as to whether they would enter into will-serve letters 19 with or without this at this point in time. That's simply 20 the way I answered this question the best I could. 21 COMMISSIONER LAURIE: I'm just concerned about 22 time, Commissioner Sharpless, water is a critical issue. 23 It's clearly required for our CEQA analysis. I'm not willing 24 to go as far as Mr. Joseph states at this point, that CEQA 25 requires a firm commitment of total and complete water Capitol Electronic Reporting (916) 967-6811 30 1 supply. I am not satisfied today that that's the rule, I 2 know the issue has been raised in other instances. But 3 that's just something that we need. 4 MR. WOLFINGER: Commissioner Laurie, we did supply 5 a water supply plan that showed where the wells are going to 6 be, what the draw-down is, the ability of the aquifer to 7 support the pumping requirements, the corridors where the 8 pipelines go, paleontology, cultural, botany, biology. So 9 the physical aspects of how the water is gotten, those have 10 been established; what hasn't been established is, in fact, 11 who is going to do it, who is going to pay for it. 12 COMMISSIONER LAURIE: Pipes are pipes and water is 13 water. 14 MR. WOLFINGER: And so I think that the physical 15 aspects of the process we have established. What we haven't 16 established is, will Victor Valley Water District own those, 17 will VVEDA own them, will the project own them. Those are 18 some issues -- 19 COMMISSIONER SHARPLESS: And I think the water 20 districts have to agree with your proposal. 21 MR. WOLFINGER: Absolutely, and that's the answer. 22 COMMISSIONER SHARPLESS: They know that you are not 23 the only user in town. If they are looking at economic 24 development they are looking at what uses, other uses might 25 come in. I think this power plant is going to be very Capitol Electronic Reporting (916) 967-6811 31 1 important to the community but so are -- so are businesses 2 that create jobs. 3 MR. WOLFINGER: Recognize that the adjudication -- 4 COMMISSIONER SHARPLESS: They need water. 5 MR. WOLFINGER: Yes. Recognize the adjudication 6 there, that every gallon of water that is used in that 7 valley, and has been for the last five years and will 8 continue, will be imported water. That in fact, as long as 9 there is imported water development will go on. Whether it 10 is used in a power plant, for a house, for a McDonald's or 11 whatever it is the aquifers, the underlying aquifers are 12 really just storage areas for water and they go up and down 13 with percolation ponds. That in fact, an industrial project 14 coming in, an expansion of the airport or whatever, it is all 15 predicated on imported water. That's how that entire process 16 up there works. It's not a matter of delaying one over the 17 other or saying, you can't build houses because you have a 18 power plant, it is all 100 percent imported water for 19 incremental usage. 20 COMMISSIONER SHARPLESS: Yes, but everybody has got 21 a straw in that pond and you are just one of many straws. 22 MR. WOLFINGER: And that's the critical issue and 23 that is, you know, one of the things that, you know, the 24 imported water. 25 COMMISSIONER SHARPLESS: That's what I'm saying. Capitol Electronic Reporting (916) 967-6811 32 1 I'm saying that I think the water agencies are going to have 2 to look at imported water as well as their own water table 3 and decide what is going to be best for their area. So, you 4 know, it is just not a case of what is in your proposal, it 5 is a case of where those water districts see their future in 6 water. 7 MR. WOLFINGER: Right. And the water master is the 8 Mojave Water Agency. We had considerable conversations with 9 Mr. Rowe and they are in agreement that this is the proper 10 type of water plan to do. So, I mean, it is not as if this 11 is, you know, that this hasn't all been discussed and talked 12 about down there. The idea of who takes the lead and does 13 what is still up in the air financially, who owns the pipes 14 and the wells. But where the water is coming from, is there 15 sufficient water, does the Mojave Water Agency who is the 16 water master up there, do they have the water, it's there, 17 they believe it's -- And that's the case. 18 COMMISSIONER SHARPLESS: Well, we've all had to 19 deal with water issues, were it so easy. 20 MR. JOSEPH: I would just point out two things: 21 One, the water district might say, no, it is not a given yet. 22 They might say, no. They might say, we would prefer 4,000 23 acre/feet a year or more than 25 percent increase in our 24 obligations to go someplace else that is better economically 25 for this area. So I just have to take issue with the Capitol Electronic Reporting (916) 967-6811 33 1 statements that, you know, all the pipes and wells are all 2 established, all the physical things are all established, 3 we're just talking about money. They're not just talking 4 about money, they might say, no. 5 Second, Mr. Valkosky, you asked about information 6 requirements. I would just note that we served a set of data 7 requests on May 8th; a substantial portion of those deal with 8 water issues. 9 HEARING OFFICER VALKOSKY: And has there been any 10 objection to those data requests? 11 MR. THOMPSON: The data requests while styled 139 12 to 151 were actually some seventy-plus separate questions and 13 we are evaluating those now and will be -- I think we have 14 until Tuesday because the 15 day time limit from when we 15 received the data requests runs somewhere over this three day 16 weekend, I think it's Saturday or Sunday. So we will be 17 responding on Tuesday, but there's a lot of requests there. 18 COMMISSIONER LAURIE: Just as long as I understand 19 the rules. Is there a procedure available to object to 20 requests and what is that time period? 21 MS. HOUGH: Fifteen days. 22 COMMISSIONER LAURIE: Okay. Is that the 15 days 23 you were referring to? 24 MR. THOMPSON: It is. 25 MS. HOUGH: And then the party that asks the data Capitol Electronic Reporting (916) 967-6811 34 1 requests can either come to the Committee for a Motion to 2 Compel or drop the issue. 3 COMMISSIONER SHARPLESS: Okay, fine. Anything more 4 on Water by the parties? Anybody in the audience? 5 Okay, let's then move to topics that deal with the 6 FAA Visual, the Department of Toxic Substance Control Permit, 7 that grouping. 8 MR. WOLFINGER: I'm sorry, I'm sorry, I was 9 conferring with my -- 10 COMMISSIONER SHARPLESS: The grouping in your 11 letter that deals with the FAA issues, the visual issue, the 12 Department of Toxic Substance Control permit. Sort of 13 everything that we have got left on the table except for the 14 Pipeline and Air Quality and Scheduling. We'll just cover 15 everything else. 16 MR. WOLFINGER: Which one do you want to start 17 first with, Waste Treatment? 18 COMMISSIONER SHARPLESS: If you would like, that 19 would be a good one. 20 WASTE TREATMENT 21 MR. WOLFINGER: We submitted a document. We don't 22 believe that we are required to supply a -- it will be 23 classified as a hazardous waste. I have to read my notes 24 here, I'm sorry, here. Let me just -- That we are recycling 25 and that we have stated that we believe that there is no Capitol Electronic Reporting (916) 967-6811 35 1 hazardous waste permit required for our proposed recycling 2 operations, which is what we are. Because basically what 3 this does is it takes the water out of there. We recycle the 4 water and we come up with a solid waste. So it's not as if 5 we're recycling -- 6 COMMISSIONER SHARPLESS: I understand, I have read 7 your paper. I understand that you have had meetings with the 8 Department of Toxic Substance Control. 9 MR. WOLFINGER: I think we've met -- We've talked 10 to them, we haven't met with them. 11 COMMISSIONER SHARPLESS: Okay, you have talked to 12 them. And I believe that in order to resolve this issue what 13 you need to do is apply for the exemption; is that not right? 14 That is my understanding of how we resolve this issue. Do 15 you have a different understanding? 16 MR. WOLFINGER: Just leave me a minute, let me read 17 what I brought along. 18 COMMISSIONER SHARPLESS: Sure. 19 MR. WOLFINGER: I am not sure. Do you know, Mike? 20 Step in here, don't be bashful. 21 MR. CARROLL: Let me try to answer the question. 22 It is a little outside of my area of expertise but another 23 lawyer in our office did step in and I was participating in 24 the calls. I am not sure that that is the case. And let me 25 back up, there is -- In addition to the recycling exemptions, Capitol Electronic Reporting (916) 967-6811 36 1 if you read through the analysis, there is some question 2 about whether or not this, what we're talking about here 3 would be a waste in the first place. And our response to the 4 issue is sort of a tiered response. 5 The first question is, first of all, we don't think 6 this is a waste and therefore we don't think it's regulated. 7 Even it was a waste we have some question about whether or 8 not it would be hazardous waste. Some of the analysis that 9 was submitted by CURE, I believe, indicated that it could 10 exceed the toxicity limits, other analysis that we have seen 11 indicates that it doesn't exceed the toxicity limits. But 12 even if you assume it is a waste and it is a hazardous waste 13 then the recycling exemptions, and there are two of them that 14 could possibly apply, would kick in. So it's sort of a, we 15 don't think it's this but if it is we don't think it's this, 16 but if it is then ultimately the recycling exemptions -- 17 COMMISSIONER SHARPLESS: Well, in order for us to 18 resolve what the legalities are would it not be best to 19 submit that issue to the appropriate agency and have a 20 response on the record rather than, we don't think? 21 MR. CARROLL: I don't believe that if an exemption 22 applies you are required to apply for an exemption. I think 23 perhaps if you determine based on your analysis that you 24 qualify for the exemption, that's it, you don't need to go to 25 the agency and say, we believe we qualify for this exemption Capitol Electronic Reporting (916) 967-6811 37 1 so we're applying for it. 2 COMMISSIONER SHARPLESS: I think the only way you 3 can get an exemption is to go through the process and 4 actually get an exemption. Otherwise you're saying, our 5 project does not apply, period. 6 And I'm not saying that reading either what I got 7 from the applicant and what I got from staff has led me to 8 the conclusion that that issue has been resolved in a final 9 way. I think we're still unresolved on that issue. Perhaps 10 what I ought to do is move to staff and to the intervenor and 11 let them set their positions on the table. 12 MR. BUELL: Staff has been in contact with the 13 Department of Toxic Substance Control and we have received 14 similar information that I think the applicant has received, 15 that the project is likely to qualify for an exemption. We 16 specifically asked the Department to provide us a letter to 17 that effect and the Department was reluctant to do that to a 18 third party, to respond to a third party's request. They 19 have indicated that they would require a letter or a request 20 from the Applicant in order to respond to whether or not the 21 project actually qualifies for an exemption. 22 And I believe that that would be the most 23 expeditious way to proceed in this case, is for the applicant 24 to submit the information. Which I believe the Department 25 already has a copy of the AFC and has CURE's letter so they Capitol Electronic Reporting (916) 967-6811 38 1 have the information, it's simply a request for them to in 2 writing identify that the project qualifies for the 3 exemption. 4 COMMISSIONER SHARPLESS: And what about USEPA? 5 MR. CARROLL: I believe the answer to that is that 6 the state has delegation from USEPA to administer the 7 hazardous waste program. 8 MS. HOUGH: That's correct. 9 MR. BUELL: That's correct. I wanted to confirm 10 that with my staffers and apparently -- 11 COMMISSIONER SHARPLESS: Is that true? Because 12 your status report leaves the issue still open. 13 MR. TOOKER: My name is Chris Tooker, I'm the 14 supervisor of the staff person addressing this issue. Based 15 on discussions with her and her consultation with the USEPA 16 there is a possibility that there could be a question of 17 defining the status of the waste under USEPA. I believe that 18 there needs to be some consultation there as well between the 19 applicant and USEPA to confirm that in fact it is not a RCRA 20 waste and therefore wouldn't require some special treatment 21 or classification as I think asserted by CURE at this point. 22 MR. BUELL: I would also add that most recently I 23 have heard, as the applicant has indicated, that EPA has 24 deferred to the Department of Toxic Substance Control so 25 their determination may be all that is needed in this case. Capitol Electronic Reporting (916) 967-6811 39 1 But certainly it wouldn't hurt to touch bases with EPA. We 2 have been unable to contact them directly, as our memorandum 3 had indicated, prior to issuing our last status report. 4 MR. CARROLL: Well, I guess I would object to 5 having to touch bases with EPA given that they don't have any 6 jurisdiction over it. I mean, the State of California has 7 delegation to administer the hazardous waste program in the 8 state of California and we're perfectly happy to go back to 9 them and -- But I have problems going to the EPA since they 10 don't really have any authority over the program. It just 11 doesn't seem necessary and it is an extra step for us. 12 MR. BUELL: Staff volunteers to make that contact. 13 COMMISSIONER LAURIE: I'm sorry? 14 MR. BUELL: The staff will make that contact with 15 USEPA and make sure. 16 COMMISSIONER LAURIE: Okay, now explain to me why. 17 Do you believe the EPA has jurisdiction? 18 MR. BUELL: To clarify whether or not they have 19 jurisdiction, which it is my understanding at this point in 20 time that they delegated that to the state, to identify 21 whether or not they have any concerns regarding this matter. 22 COMMISSIONER SHARPLESS: But isn't that delegation 23 specified somewhere? Is it specified? Can you give us a 24 citation right now of where that delegation is specified? 25 MR. CARROLL: Not right now. Capitol Electronic Reporting (916) 967-6811 40 1 COMMISSIONER SHARPLESS: Or if you can't right now 2 could you provide it to us? 3 MR. CARROLL: Yes. 4 COMMISSIONER SHARPLESS: So we can just clear the 5 matter up. 6 MR. CARROLL: The other point that I wanted to make 7 in terms of getting some written verification from the agency 8 that the exemption applies. It is my belief that you do not 9 need to apply for the exemption. The way the hazardous waste 10 regulations work is if you determine based on your analysis, 11 and of course you're operating under your own risk, if you 12 make a mistake you're exposed. But if you determine under 13 your own analysis that you qualify for one of the exemptions 14 you are free to proceed. 15 I think that what DTSC is saying is that if we ask 16 them to analyze and verify our own analysis they would write 17 us a letter saying, yes, we concur with your analysis. But I 18 think that's different from some sort of a formal application 19 process for the exemption and I don't think that that latter 20 process is required or necessary. Now we are happy to go and 21 try to get the letter from them basically saying, we have 22 looked at your analysis and yes, we concur, but I just want 23 to make it clear that I don't think that that's required 24 under the regulations and it is more of an informal 25 concurrence than it is a formal application process. Capitol Electronic Reporting (916) 967-6811 41 1 COMMISSIONER SHARPLESS: Well, you may be well 2 right, I am just going on what I saw in the staff's write-up, 3 which explained the process, the three-tier process. It 4 indicated that the certified/unified program agency is the 5 Victorville Fire Department and that somehow you would need 6 to get an exemption from them. So I have on the one hand you 7 saying that you proceed at your own risk and on the other 8 hand I have staff's status report that says there is a three- 9 tier process and that you must apply for an exemption. I am 10 just trying to find the resolution in this issue. 11 Staff, would you like to present your position on 12 that issue? 13 MR. TOOKER: With respect to the three tiers: I 14 reviewed this issue also with technical staff and it appears 15 that there might be, that there is language in their rules or 16 in their regulations which talks about a -- 17 COMMISSIONER SHARPLESS: Who is their, their 18 regulations? 19 MR. TOOKER: DTSC's. 20 COMMISSIONER SHARPLESS: Okay. 21 MR. TOOKER: Which talks about a conditional 22 exemption and another exemption which is kind of 23 unconditional. But it doesn't talk about an exemption, 24 period, and it may be that the exemption -- 25 COMMISSIONER SHARPLESS: It doesn't say anything Capitol Electronic Reporting (916) 967-6811 42 1 about an applicant can do their individual analysis and make 2 this determination on their own at their own risk and satisfy 3 all laws and ordinances that pertain to this project? 4 MR. TOOKER: No, it doesn't. What it implies is 5 that they have two, two conditional exemptions that they can 6 issue. But the overall, you know, exemption from the program 7 may be outside of that process and may be the result of an 8 applicant inquiring as to whether their conclusion is 9 consistent with the agency's. Which seems to be what the 10 applicant is suggesting that they would do, to write a letter 11 and ask them to confirm and agree with their conclusion that 12 in fact an exemption, that they are exempt from the process. 13 COMMISSIONER LAURIE: Are we talking about 939? Is 14 that what we're talking about? 15 MR. TOOKER: I'm sorry, I don't know the number. 16 COMMISSIONER SHARPLESS: Is that a Section, a Code? 17 COMMISSIONER LAURIE: Yes. 18 COMMISSIONER SHARPLESS: A Code reference? 19 COMMISSIONER LAURIE: That's the recycling section. 20 When we're talking about an exemption, exemption from what? 21 MR. CARROLL: From the requirement to obtain a 22 permit for the treatment of hazardous waste. 23 COMMISSIONER LAURIE: Okay. 24 COMMISSIONER SHARPLESS: Because your contention is 25 that the crystallizer is really a recycling process which Capitol Electronic Reporting (916) 967-6811 43 1 precludes that from being a waste in the first place. Is 2 that your contention? 3 MR. CARROLL: Well, that's one of our contentions. 4 But remember, our other contentions are: first of all, it is 5 not a waste; and second of all, even if it is a waste it is 6 not hazardous. So assuming for the moment, and we are not 7 conceding on these points, but assuming that those two points 8 are true then yes, we are saying we would qualify for one of 9 the recycling exemptions, one or both of the recycling 10 exemptions. 11 COMMISSIONER SHARPLESS: Maybe you can clarify for 12 me. Mr. Buell just said, or Mr. Tooker, I can't remember 13 which, that he had understood that you said you would be 14 going to the Department and asking in writing whether or not 15 you would be -- 16 MR. CARROLL: Well, I think we are willing. 17 COMMISSIONER SHARPLESS: -- covered or not. 18 MR. CARROLL: I think we are willing to do that, in 19 fact, we already did that verbally. And I believe, at least 20 the draft that I'm looking at has a footnote to that effect, 21 that Norman Riley of DTSC confirmed verbally over the 22 telephone our analysis. We are willing to try to get that 23 confirmation in writing as well. The only caveat that I 24 would point out is that until the system is up and running it 25 is impossible to answer the first two or at least it's Capitol Electronic Reporting (916) 967-6811 44 1 impossible to answer the second question, which is, whether 2 it is a hazardous waste. 3 COMMISSIONER SHARPLESS: How can you claim that it 4 is and then say you have to wait until it runs to determine 5 it? 6 MR. CARROLL: We don't believe that is a hazardous 7 waste at this point. 8 COMMISSIONER SHARPLESS: But you won't know unless 9 you have it in operation? 10 MR. CARROLL: Once it is in operation then we'll do 11 testing to confirm that. If it turned out that it was 12 hazardous waste then we would qualify for one of the 13 recycling exemptions. But we won't know, we won't be able to 14 answer the first -- the first and the second questions about, 15 is this a waste or is it a hazardous waste until it is up and 16 running. But I think that what we can say to the Department 17 is we would like confirmation that assuming once the system 18 is up and running it turns out to be a hazardous waste, would 19 we qualify for the recycling exemptions? 20 COMMISSIONER SHARPLESS: Doesn't that kind of 21 weaken your case? If I were DTSC I would have a level of 22 discomfort on writing you a letter and saying you were, you 23 know, your process was not a hazardous waste given that you 24 are not really going to really know that until you have 25 tested it in operation. Capitol Electronic Reporting (916) 967-6811 45 1 MR. CARROLL: I don't think they will write us a 2 letter saying it is not a hazardous waste. I think they 3 would be willing -- I mean, I don't know what they will be 4 willing to do. We will ask them to write us a letter saying, 5 look, we don't think this is hazardous but we would like you 6 to confirm for us that if it turned out to be hazardous waste 7 that we would qualify for the recycling exemption. 8 HEARING OFFICER VALKOSKY: And your letter will 9 address one of the basic concerns, i.e., do you need a permit 10 from DTSC. 11 MR. CARROLL: Yes, assuming we qualified for the 12 recycling exemption. 13 HEARING OFFICER VALKOSKY: Right. 14 MR. CARROLL: We would not -- 15 HEARING OFFICER VALKOSKY: Because that is the 16 fundamental question, I think, that has to be answered. 17 MR. CARROLL: Right. 18 MR. JOSEPH: Perhaps I can join this discussion. I 19 feel sort of like the person at the party that everybody is 20 talking about and they don't know the person is there. 21 COMMISSIONER SHARPLESS: I'm sorry, we know you're 22 here, I guess we just assumed we know how you feel. But go 23 ahead, state it. 24 MR. JOSEPH: Perhaps you do. First, I wanted to 25 start with the last page of the applicant's May 15th status Capitol Electronic Reporting (916) 967-6811 46 1 report which says, and this is an important admission. It 2 says: 3 "It is possible that concentrations in 4 the brine stream heading into the crystallizer 5 would exceed the applicable hazardous waste 6 criteria." 7 First of all, as a procedural matter, this document was filed 8 in the Docket Office, it was served on the parties. Then a 9 day or two later we get a letter saying, we're withdrawing 10 that, and it's that paragraph which is deleted from the 11 document. We don't accept the notion that one can make an 12 admission on the record and say, oops, I wish I hadn't said 13 that, I'll take it back. We intend to rely on that admission 14 if necessary. 15 COMMISSIONER SHARPLESS: Are you referring to the 16 May 15th letter? 17 MR. JOSEPH: Yes, the very last page. 18 COMMISSIONER SHARPLESS: On the attachment. 19 MR. JOSEPH: Right. 20 COMMISSIONER SHARPLESS: Okay, I've got it. 21 MR. JOSEPH: The top paragraph in there has that 22 statement that I just read. 23 COMMISSIONER SHARPLESS: Okay. 24 MR. JOSEPH: Second, with respect to the process. 25 It is true that DTSC does have delegated authority over this. Capitol Electronic Reporting (916) 967-6811 47 1 But as with other delegated authority, EPA maintains a 2 continual oversight to be sure that their delegation is being 3 properly exercised. Commissioner Sharpless, I'm sure you're 4 familiar with this in the air quality area. 5 As a result, EPA and DTSC are consulting and will 6 make a determination as to whether or not the brine which 7 goes into the crystallizer and the crystallizer itself then 8 qualifies for the recycling exemption or not. At this point 9 I think it is too soon to say how that is going to turn out, 10 it could go either way. I think the process that has been 11 suggested of submitting a letter to DTSC to get a resolution 12 is a good way to resolve the issue so that we'll know either 13 it does or it does not qualify in DTSC's eyes with EPA's 14 oversight. 15 COMMISSIONER SHARPLESS: I think that there's some 16 unanswered questions and the only way that we're going to 17 resolve them -- They are answered to you but there seems to 18 be issues which you feel can be dealt with. We need to show 19 a way to address those and resolve them in our record. And 20 perhaps the best way is to write this letter to the 21 Department and get some response. 22 MR. THOMPSON: If I may, Commissioner. It is 23 gratifying to know that the unions believe we are infallible 24 but in actual fact we do make mistakes. We would intend to 25 sponsor into the record when the appropriate time comes the Capitol Electronic Reporting (916) 967-6811 48 1 correct language that reflects our views and reflects what we 2 believe to be true and will not sponsor things that we don't 3 believe to be true. So we will be revising the -- 4 COMMISSIONER SHARPLESS: Okay, I appreciate that. 5 MR. THOMPSON: Second of all, while we have some 6 control over what we write to DTSC we don't really have any 7 control over whether or not DTSC will respond to us, we hope 8 they do, or when they will respond. And this goes to a 9 timing issue. In the staff's update the staff was 10 recommending, as I read it, that they want us to provide 11 documentation of the findings by DTSC by June 15th. 12 Keeping this in the perspective that apparently 13 both the staff and ourselves believe that a recycling 14 exemption is available we think that is a little harsh. We 15 can certainly write the letter to DTSC and talk to them as 16 soon as we can but I guess I would be surprised if we can get 17 a letter back from DTSC in -- And to hold us to that June 18 15th time frame as the staff is suggesting we think is a 19 little restrictive. 20 COMMISSIONER SHARPLESS: Okay, we haven't gotten to 21 the scheduling issues yet. I appreciate what you're saying 22 and that, again, we are dealing with multiple agencies that 23 are all on a sort of a time frame but we're going to try to 24 keep as much on track as we can. But I think we do need to 25 deal with the issues to make the record as strong as Capitol Electronic Reporting (916) 967-6811 49 1 possible. It seems to me that the only way that we can 2 really deal with this issue is to write that letter to the 3 Department of Toxic Substance Control. Commissioner Laurie, 4 did you want to add anything on that issue? 5 COMMISSIONER LAURIE: I have a question. I'm 6 unsure as to -- I don't have a good sense as to what specific 7 information we're requesting that we haven't received. Is it 8 information we need for our environmental analysis? Is it 9 approval from a state agency that has jurisdiction? Can you 10 more carefully define for me or just define for me what is 11 missing that we think we need. 12 MR. JOSEPH: Commissioner Laurie, since I opened 13 this Pandora's box maybe I can give you a succinct answer. 14 COMMISSIONER LAURIE: I'd rather hear from my staff 15 first, Mr. Joseph, thank you. 16 MR. BUELL: Specifically what we're looking for is 17 identification of whether or not a permit is required for the 18 hazardous waste. Excuse me, I'm presuming something not in 19 evidence here at this point. For the crystallizer system. 20 COMMISSIONER LAURIE: Okay. If a permit is 21 required would that be imposed as a condition on the project? 22 Is that how that would be treated? 23 COMMISSIONER SHARPLESS: Yes. 24 MR. BUELL: Yes. 25 COMMISSIONER LAURIE: Okay. So we need the Capitol Electronic Reporting (916) 967-6811 50 1 information to know whether or not we have to impose this 2 condition on the project? 3 MR. BUELL: Yes. 4 COMMISSIONER LAURIE: Thank you. 5 COMMISSIONER SHARPLESS: Now, Mr. Joseph, do you 6 have anything to add? 7 MR. JOSEPH: I should know better than to have any 8 lack of trust in the staff's answers, that was a perfect 9 answer. 10 COMMISSIONER SHARPLESS: Okay, thank you. Anything 11 more that you would like to add? 12 MR. WOLFINGER: I would just like to say for the 13 purposes of the Commissioners to understand what's going on 14 here. What occurs in this whole thing is water in the 15 cooling tower ends up building up impurities in it and you 16 take a slip stream of that off. And first what you do is you 17 heat it up to drive off some of the moisture and concentrate 18 it in a concentrator and then it goes in closed pipes and 19 tanks into a crystallizer which then takes all the water out. 20 Our original -- So it never comes out. I mean, it never is 21 disposed of. 22 COMMISSIONER LAURIE: Yes, but at that point you're 23 left with stuff. 24 MR. WOLFINGER: You're left with a solid. And that 25 is never -- That is not a discussion at this point in time, Capitol Electronic Reporting (916) 967-6811 51 1 there is no discussion. We have always characterized that as 2 a non-hazardous, five tons a day that is going to go off. 3 COMMISSIONER LAURIE: And we know what that stuff 4 is? 5 MR. WOLFINGER: Yes. 6 COMMISSIONER LAURIE: We can define it? 7 MR. WOLFINGER: Right. We have postulated what it 8 is. You don't really know, like Mr. Carroll said, until you 9 actually test it, but we have postulated what we believe it 10 is and it's being non-hazardous, okay. But the point of it 11 is that we're making up as if there is a waste stream between 12 when you're concentrating this down through a continuous 13 process. And one of the fundamental questions is, is it even 14 a hazardous waste at all when it is on a continuous process. 15 And that is a federal area and that was one of the things 16 that was earlier -- we talked about it. We don't even 17 believe this is a hazardous waste because it's not a waste, 18 it's part of a continuous operating process. It has steps in 19 the process. 20 COMMISSIONER SHARPLESS: Then it should be a really 21 easy letter for the Department to write. I mean, extremely 22 easy for the Department to write. 23 MR. WOLFINGER: Well, you will not get these people 24 to answer that kind of a question but that is what we believe 25 is the real key. We believe it's a red herring. That in Capitol Electronic Reporting (916) 967-6811 52 1 fact this is part of a continuous process and doesn't even 2 establish itself as a waste, a hazardous waste or any waste. 3 It is not a waste, it is part of a continuous, operating 4 process. So I want to make sure you understand what is going 5 on. 6 COMMISSIONER SHARPLESS: We do. 7 MR. WOLFINGER: We're saying this is a solid that 8 comes out the back end. 9 COMMISSIONER SHARPLESS: I do. 10 MR. WOLFINGER: I'm sorry? 11 COMMISSIONER SHARPLESS: I do. I have read your 12 papers, I have read your analysis and I do. What I am trying 13 to do is set the record straight and address all of the 14 issues that are raised and put them aside. 15 MR. CARROLL: And we will try to follow. Let me 16 just say, we thought we had done that. We did the analysis 17 which is all any other facility would be required to do. We 18 backed that up by calling the agency and running it through 19 with them and getting verbal confirmation that yes, you have 20 done the analysis right. So we thought we had done that, but 21 we will go the next step and try to get what we have gotten 22 verbally in writing. 23 COMMISSIONER SHARPLESS: Okay. Well, we obviously 24 have staff who has raised some concerns about wanting -- 25 Since the Department of Toxic Substance Control is the agency Capitol Electronic Reporting (916) 967-6811 53 1 with that expertise, if you have done the analysis and they 2 review the analysis and they sign off on it then that is one 3 less thing on the checklist for this Committee to deal with. 4 And unless Staff tells me today that they absolutely have no 5 concerns, they have read your analysis and they have no 6 concerns, we don't even have to deal with the letter. But I 7 don't get that out of staff. 8 MR. BUELL: Staff is concerned that, basically that 9 the Department has not been willing to put their findings in 10 writing. It is just a matter of documenting. If they aren't 11 willing to put it in writing, why not. It seems like a -- 12 The phraseology, it seems like a slam dunk to do so based 13 upon what they have identified at this point but we would 14 like to see it -- 15 COMMISSIONER SHARPLESS: Do you feel yourselves 16 experts in this area? 17 MR. BUELL: We have staff that are experts. Ellen 18 Townsend-Smith is here that -- 19 COMMISSIONER SHARPLESS: Could you make this 20 analysis and that determination on your own without the 21 Department of Toxic Substance Control? 22 MS. TOWNSEND-SMITH: No, we can't. 23 MR. BUELL: The answer I got was, no. 24 COMMISSIONER SHARPLESS: Okay. 25 MR. CARROLL: I guess I would just add that -- I Capitol Electronic Reporting (916) 967-6811 54 1 mean, it puts us in a difficult -- I mean, we have done the 2 analysis, we went to the agency with jurisdiction, they said, 3 yes, you did the analysis right, but that is not good enough. 4 I mean, we will try to get a letter but we can't control the 5 DTSC. If they say, no, I'm sorry, our practice is not to put 6 that kind of thing in writing, I mean. We're going to try to 7 get it but, you know, we feel like we're being really backed 8 into a corner. I mean, we have done the analysis, we have 9 confirmed the analysis with the agency with jurisdiction over 10 this. They have said yes, you did it right. It's sort of 11 like, when, you know. What does it take to convince, you 12 know, those with concerns? 13 COMMISSIONER SHARPLESS: Isn't DTSC a -- We're the 14 lead agency. Are they like a -- What is the terminology? 15 MS. HOUGH: A responsible agency. 16 COMMISSIONER SHARPLESS: A responsible agency. Are 17 they not a responsible agency? 18 MR. BUELL: Yes. 19 COMMISSIONER SHARPLESS: Are they not a responsible 20 agency? Don't they have certain requirements under CEQA? 21 MS. HOUGH: Yes. 22 COMMISSIONER SHARPLESS: Okay. Well if you -- 23 COMMISSIONER LAURIE: Well -- I'm sorry. 24 COMMISSIONER SHARPLESS: Commissioner Laurie. 25 COMMISSIONER LAURIE: Responsible agencies are not Capitol Electronic Reporting (916) 967-6811 55 1 obligated to respond. Responsible agencies -- 2 COMMISSIONER SHARPLESS: But if they are asked. 3 COMMISSIONER LAURIE: If they are asked, that's 4 right. And so the question in my mind is, should we ask. If 5 we need information, certainly normally it is the applicant's 6 burden to go out and get it. But if we are looking for 7 specific information and we need clarification I certainly 8 don't mind asking. 9 A question again is, are we permitted -- and this 10 is directed to staff. If the reasons for all these 11 communications are to allow us to reach a determination of 12 whether or not a permit is required as a condition to the 13 project can the project be conditioned on obtaining a permit 14 as may be required? Can you do that? The permit is not 15 going to be obtained until after certification so is there 16 anything unlawful in your view, staff, about imposing a 17 condition requiring a permit be obtained if required? 18 MS. HOUGH: You have to be able to make findings 19 about compliance with laws and that would include those laws 20 and regulations that apply to permits. And typically the way 21 -- In fact, there have been situations in the past where 22 there have been federal permits that have been not been 23 obtained prior to the Commission issuing an AFC. 24 The last couple of siting cases that I have been 25 involved in the Committees have been very much strongly in Capitol Electronic Reporting (916) 967-6811 56 1 favor of pulling that all into this process so that they have 2 a more, that they have the big picture. That they know 3 exactly what conditions are going to apply to the project 4 from each agency that is involved. So we're trying to do 5 that in this case based on our experience in the more recent 6 cases where attempts to put off -- And in those cases they 7 were federal permits, not other state agency permit 8 conditions, were met with disfavor from the Commission. 9 COMMISSIONER LAURIE: Well, I don't have -- 10 Commissioner Sharpless, I don't have a problem. I don't know 11 that everybody likes the protocol or not but if the parties 12 can agree on the correct question I don't mind having us ask 13 another state agency the question and hopefully they would 14 respond. I certainly don't have a problem with that. 15 COMMISSIONER SHARPLESS: I think Mr. Buell said 16 that he would do that. Did you say that, Mr. Buell? Or did 17 you say you were following up on USEPA? Perhaps I jumped the 18 gun here. 19 MR. BUELL: We had made a verbal request of the 20 Department to put in writing their findings and the 21 Department was reluctant to do so, to respond to a third 22 party. Basically, they deal with applicants that are 23 responsible for their projects rather than other state 24 agencies and responding to state agencies. Certainly we 25 could attempt to do that again, make a request to the Capitol Electronic Reporting (916) 967-6811 57 1 Department in writing requesting their findings on the 2 exemption. 3 COMMISSIONER SHARPLESS: So they have already told 4 you that they would prefer to have it direct from the 5 applicant. 6 MR. BUELL: A request to do so, yes. 7 MR. THOMPSON: We intend to make that request. 8 MR. CARROLL: We'll do it. 9 COMMISSIONER SHARPLESS: Okay. That would be very 10 helpful, I think. Then we can put that one aside. 11 MR. BUELL: Yes. 12 COMMISSIONER SHARPLESS: Because otherwise, when 13 you get into the adjudicatory process and issues are 14 identified that are unresolved, you swear under testimony 15 about the facts of the case and we look at the expertise and 16 the background of those witnesses. I would prefer to have 17 the state department who is responsible for this issue area 18 to have signed off on that issue. I think it just makes for 19 a stronger case and allows the applicant to go forward with 20 one less issue hanging over their head. It saves money in 21 the long run, Mr. Wolfinger. 22 MR. WOLFINGER: We were always willing to write the 23 letter, our point was, we're not sure we can get an answer. 24 COMMISSIONER SHARPLESS: When you're going to get 25 it, yes. We'll try to help along those lines. Capitol Electronic Reporting (916) 967-6811 58 1 MR. WOLFINGER: We may need the muscle of the 2 Commission. 3 COMMISSIONER SHARPLESS: That is a sister agency, 4 we'll see what we can do. 5 FAA 6 Okay, let us go -- I think this is a relatively 7 easy one. Why don't we try the FAA. Can you all smile and 8 say, job well done? 9 MR. WOLFINGER: I'd like to ask Andy Welch to 10 respond to the questions on the land use and visual for the 11 FAA. And also talk about the letter for the lights. 12 MR. WELCH: Okay. There's several issues from the 13 FAA. Basically, the FAA submitted the letter on May 5th that 14 I think was reflected in the staff's report number four dated 15 May 8th. It indicated that all the questions that have 16 arisen were reviewed again by that agency and that they 17 believe -- Their phrase is that they -- No changes to the 18 condition, that they are not changing their original, no 19 hazard designation. 20 Further, there was a question raised on the visual 21 issue about the lighting for the poles. There was a 22 misunderstanding, I believe, on the part of the staff that 23 dealt with the poles along El Evado Road. That since they 24 are on the former Air Force Base that they would fall under 25 the requirement that all lighting on airport property -- that Capitol Electronic Reporting (916) 967-6811 59 1 all electric transmission poles on airport property have 2 lighting on them, construction lighting. 3 They missed a distinction. The airport property 4 under the FAA is a smaller area than the entire former Air 5 Force Base and it basically in the area of our project goes 6 from along Phantom Street up toward the railroad and 7 therefore the El Evado portion of the poles are not on 8 airport property. So they were not referred to. 9 COMMISSIONER SHARPLESS: It sounds as though we 10 have dealt with that issue. 11 MR. BUELL: Yes. 12 COMMISSIONER SHARPLESS: Any other issues, staff? 13 MR. BUELL: Staff would just like to point out that 14 our Preliminary Staff Assessment that was filed last Friday 15 does not incorporate or reference the letter from FAA or 16 discuss the visual aspects of the lighting requirements. We 17 have a workshop scheduled on the 28th where Visual will be a 18 topic for discussion. We can talk in greater detail at that 19 time. 20 COMMISSIONER SHARPLESS: A topic for discussion, I 21 guess. It's fairly well-resolved. 22 MR. BUELL: Yes. 23 COMMISSIONER SHARPLESS: From everything I read 24 this is fairly well-resolved. 25 MR. BUELL: Yes. Capitol Electronic Reporting (916) 967-6811 60 1 COMMISSIONER SHARPLESS: Good job. Anybody else? 2 Mr. Joseph? 3 MR. JOSEPH: (Nodded). 4 COMMISSIONER SHARPLESS: No? Okay. Stan, is there 5 any other issues in that broad topic area? 6 HEARING OFFICER VALKOSKY: Yes, that's it. 7 COMMISSIONER SHARPLESS: Those are they. Okay, 8 fine. Let's go next to the Gas Pipeline. 9 GAS PIPELINE 10 MR. WOLFINGER: Do you want us to talk? 11 COMMISSIONER SHARPLESS: Yes. 12 MR. WOLFINGER: Okay. 13 COMMISSIONER SHARPLESS: Please. 14 MR. WOLFINGER: Let me just start off and then I'll 15 ask Amy Cuellar from RMI to discuss. When we got into this 16 project we had looked at where some existing pipelines were 17 going north out of the project and they were owned by 18 Southwest Gas; there is an existing pipeline on the 19 Hillendale Road. There is also on this road that was going 20 north, directly north from our project to intersect with two 21 major pipelines, PG&E and Kern River Mojave lines, there was 22 also cable along -- fiber optic cable and those type of 23 things. 24 So we had assumed, and it turned out to be an 25 incorrect assumption, that placing another pipe along this Capitol Electronic Reporting (916) 967-6811 61 1 road would not be a significant problem, an issue. Well, and 2 that was the route that we discussed and had laid out in 3 front of the staff and the Commission. 4 It turns out that in fact that although there are 5 utilities along this road in the interim between--and I don't 6 know how the cable got in there because that's new but the 7 pipeline is like 40 years old or 30 years old--they have 8 redesignated that area as being prime habitat for the desert 9 tortoise. And in fact they have allocated -- Because there 10 is a need for north/south corridors in that area of the state 11 they have allocated other areas to be what is called utility 12 corridors where they--this is the BLM and US Fish and 13 Wildlife--where they would like to see utilities placed in 14 these utility corridors recognizing that there is a need to 15 cross the desert and prime habitat in north/south commerce. 16 As a result we have changed where we are building 17 that pipeline. And I made a phone call but we have not laid 18 out the route to put it into a map which we will try to do 19 shortly. But basically we're going over and using an 20 existing BLM corridor along what is called Route 395. It's 21 about another five or six miles to go over to that corridor 22 and go up. So we are in the process of surveying that 23 corridor and doing that. 24 In addition we also felt that because we were 25 making this change and the fact that the permitting Capitol Electronic Reporting (916) 967-6811 62 1 consultant, who we believe is a good consultant but was not 2 familiar with the territory where we were at, that if we were 3 going to meet a timetable of June the 15th they were not able 4 to muster the resources nor have the background and those to 5 accomplish the tasks that needed to be accomplished. So RMI 6 has taken over the permitting responsibility for that and 7 they are the ones that have permitted the other linear 8 facilities along with the facility itself at the High Desert. 9 So I want to give you that preamble because there 10 are some changes that have occurred there. And Amy is the 11 Project Manager for that and, Amy, it is now your turn. 12 MS. CUELLAR: Again, I'm Amy Cuellar, I'm a 13 consultant for the project. We intend to supply on June 15th 14 the required 125 copies of all the engineering and 15 environmental information for this new gas pipeline route. 16 The information contained in that submittal will not only 17 meet the CEC's regulations but as well as what was addressed 18 as informational requirements in the staff's status report 19 number four. 20 In the next week the project intends to file with 21 the Bureau of Land Management the official right of way grant 22 permits with that agency. That kind of starts off the 23 official process with the Bureau of Land Management. We have 24 been in consultation informally both with BLM and formally 25 with Fish and Wildlife Service and are in the process now of Capitol Electronic Reporting (916) 967-6811 63 1 trying to get a meeting with both those agencies. We're 2 still throwing around some tentative dates but anticipate a 3 meeting being scheduled in the next few weeks to talk about 4 each of those agencies' federal requirements, permitting 5 requirements, and how best to streamline those processes. 6 COMMISSIONER SHARPLESS: Do I understand from what 7 Mr. Wolfinger just said that it is now on a different 8 project? The information that you are going to submit, is 9 that going to be on the -- 10 MR. WOLFINGER: A different route. The route -- 11 COMMISSIONER SHARPLESS: It's on a different 12 route -- 13 MS. CUELLAR: Yes. 14 COMMISSIONER SHARPLESS: -- than the one that 15 currently is in the application. 16 MR. WOLFINGER: That's correct. 17 COMMISSIONER SHARPLESS: So when you submit the 18 information that has been requested by CEC staff it will be 19 based on this new route? 20 MR. WOLFINGER: That's correct. 21 MS. CUELLAR: Yes. 22 COMMISSIONER SHARPLESS: And as I understand it 23 this new route is within corridors that have been designated 24 for utilities. 25 MS. CUELLAR: Yes, completely within. Capitol Electronic Reporting (916) 967-6811 64 1 COMMISSIONER SHARPLESS: Okay. That puts a 2 different slant on the issues that you have been dealing 3 with. I guess the other issue would be that certainly you 4 have dealt with some of the questions of location, you have 5 dealt with the data issues, you have dealt with starting the 6 process under federal agencies. But is there still a need to 7 have an MOU between us and BLM to do a joint document, 8 Mr. Buell? 9 MR. BUELL: Yes, it is my understanding that if the 10 pipeline does cross BLM land, and it is likely to do so, that 11 we would need to enter into an MOU to iron out the details of 12 joint environmental documentation for the project. 13 COMMISSIONER SHARPLESS: And when do we take that 14 step? 15 MR. BUELL: We will do so as soon as we have a 16 slightly better understanding of where the -- of what the 17 proposal is. 18 COMMISSIONER SHARPLESS: So that would be when the 19 information came in on June 15th? 20 MR. BUELL: I think we would like to try doing that 21 -- meeting with those agencies prior to that. 22 MR. WOLFINGER: We'll supply a map, I mentioned 23 earlier. We'll supply a map earlier. I don't have it today 24 because the corridor is like 400 feet wide and we're not sure 25 if we are on the right side of the corridor or the left side. Capitol Electronic Reporting (916) 967-6811 65 1 We would like to -- When we present something we'd like to 2 have it. So I'm thinking we're looking by the end of this 3 week to have a definitive. 4 MS. CUELLAR: Yes. Actually, the engineers working 5 on this project are really out there today flagging this 6 pipeline so our specialists can go out and continue on with 7 their surveys. 8 MR. WOLFINGER: And we'll supply that information. 9 COMMISSIONER SHARPLESS: And are the owners of the 10 pipelines -- You mentioned who would be the owners of this 11 pipeline. Would those be the same owners? 12 MR. WOLFINGER: We're suspecting that Southwest -- 13 Yes, our intention is Southwest Gas is going to be the owner 14 as they are the owner of the other pipeline, we are just 15 doing the permitting for it. And Steve Frankiewich back here 16 from Southwest Gas, he's the Project Manager and his people 17 are engineering it. They have a company that is engineering 18 it and we're providing the environmental permitting for that 19 work. 20 COMMISSIONER SHARPLESS: Commissioner Laurie. 21 COMMISSIONER LAURIE: Question, clarification as to 22 process. You have indicated that your environmental 23 documentation will be submitted by June 15th. 24 MS. CUELLAR: Yes. 25 COMMISSIONER LAURIE: That is good news to me but Capitol Electronic Reporting (916) 967-6811 66 1 let me ask staff. You have indicated that your understanding 2 is you have to enter into an MOU with the feds, to do what? 3 MR. BUELL: To establish what needs to be included 4 in our environmental document and in essence in our FSA in 5 order to ensure that it is compatible with federal, I believe 6 it's NEPA requirements. 7 COMMISSIONER SHARPLESS: Isn't it like a joint 8 environmental impact? 9 MS. HOUGH: Yes. 10 MR. BUELL: Yes. 11 COMMISSIONER SHARPLESS: So rather than having the 12 feds do one and us do another we combine our efforts. Ask 13 the same questions, do the same analysis so it becomes a 14 combined document for that stretch. 15 MR. BUELL: Yes. 16 COMMISSIONER LAURIE: Did the feds do an 17 environmental analysis when they created this utility 18 corridor? 19 MS. HOUGH: We don't know. 20 MR. BUELL: One thing that I wanted to point out is 21 we -- 22 COMMISSIONER SHARPLESS: Well, let me ask something 23 along what Commissioner Laurie did. They do something called 24 a Habitat Conservation Plan or, you know. Was the Habitat 25 Conservation Plan done for that particular corridor? Capitol Electronic Reporting (916) 967-6811 67 1 MS. CUELLAR: That I don't know but I do believe we 2 will be required to do a Habitat Conservation Plan for this 3 project to meet Fish and Wildlife Service requirements. 4 COMMISSIONER SHARPLESS: Okay, because that was 5 kind of getting to Commissioner Laurie's question. If this 6 has already been designated as a utility corridor, assuming 7 that the feds understood that there might be a need for 8 utilities to pass over that land, then they must have done 9 something to designate that corridor. 10 COMMISSIONER LAURIE: I would anticipate that. 11 COMMISSIONER SHARPLESS: And I think that's 12 precisely why the applicant has reconsidered the location. 13 MR. WOLFINGER: Partly, but I think it's more of a 14 physical designation then it is saying -- We still have all 15 the requirements to go out and study the botany and what's 16 there so I don't think it does anything particularly to 17 reduce it. It's just that if you go into a prime habitat 18 place then they don't want to do it. So they want you to put 19 them all there but I don't think it resolves the ability for 20 RMI's staff to go out there and still study, you know, 21 tortoises and desert squirrels and the botany, right. 22 COMMISSIONER LAURIE: Have you folks -- Have you 23 folks already done that or will you do that before June 15th? 24 MS. CUELLAR: We are in the process of doing that 25 now. Capitol Electronic Reporting (916) 967-6811 68 1 COMMISSIONER LAURIE: Okay. So you believe that 2 your submittal will basically be complete as far as you folks 3 are concerned regarding an environmental analysis of the 4 pipeline. 5 MS. CUELLAR: Yes, with the possible exception of 6 the wildlife portion of the biological resources section. We 7 do intend to have all the data sheets submitted by the June 8 15th deadline but those surveys are quite intensive and are 9 going to take quite a long time period to complete with this 10 long pipeline. So there is a question as to whether or not 11 the write-up for the wildlife portion of the biology will be 12 completed by the 15th but we will supply all the field data 13 sheets. 14 COMMISSIONER SHARPLESS: Aren't there also 15 limitations on lands like these for when you can do surveys 16 and isn't there a survey deadline of May 31st? 17 MS. CUELLAR: Yes. Well, there was a survey 18 deadline of May 31st and we have been in coordination with 19 all the agencies on that issue. And because it has been such 20 a wet year that survey window has been expanded. So we 21 believe we're still in that window. 22 COMMISSIONER SHARPLESS: Expanded to when? Do you 23 know how far? 24 MS. CUELLAR: Their estimate is mid-June. The 25 wildlife surveys for desert tortoise and Mojave ground Capitol Electronic Reporting (916) 967-6811 69 1 squirrel, actually the window for those surveys ends at the 2 end of June so we're still fully in that window as well. 3 It's the botanical that has a smaller window but it's been -- 4 COMMISSIONER SHARPLESS: I guess El Niño helped 5 somebody. 6 MS. CUELLAR: Yes, it did. 7 COMMISSIONER SHARPLESS: Okay. 8 HEARING OFFICER VALKOSKY: Do you have any idea of 9 how long the federal review process will take? Both the 10 right-of-way process and the environmental assessment 11 process. 12 MS. CUELLAR: I think staff estimated in one of 13 their status reports possibly taking as long as 150 days to 14 complete that process. What we're hoping is getting these 15 meetings scheduled with both federal agencies in the next few 16 weeks is we're going to be able to streamline that process 17 and meet both their requirements but only supply them with a 18 limited amount of actual documents. 19 HEARING OFFICER VALKOSKY: Okay. And will staff be 20 involved in this process pursuant to an MOU, or even before 21 the MOU just informally? 22 MR. BUELL: Certainly staff will be in contact with 23 US Fish and Wildlife and Department of Fish and Game 24 coordinating our review of what needs to be conducted in 25 terms of surveys but also with BLM. Capitol Electronic Reporting (916) 967-6811 70 1 HEARING OFFICER VALKOSKY: So the answer is, yes. 2 MR. BUELL: Yes. 3 HEARING OFFICER VALKOSKY: Yes, okay. Will there 4 be any landowner identification and noticing wrinkles in the 5 new pipeline route? Part of the information requirements 6 indicate that you have to provide a list of the landowners 7 within I believe 500 feet of the center line. 8 MS. CUELLAR: Yes, all the information that we 9 intend to supply on June 15th will be a combination of the 10 environmental requirements as well as the engineering 11 requirements. Part of that does include the landowner 12 information. 13 HEARING OFFICER VALKOSKY: Landowner 14 identification, okay. Then staff, I assume your position is 15 that will require supplemental noticing of the landowners? 16 MR. BUELL: Yes. 17 HEARING OFFICER VALKOSKY: Okay. And either a 18 workshop or an informational presentation by the Committee on 19 the landowners affected by the new pipeline route? 20 MR. BUELL: That's a possibility. 21 HEARING OFFICER VALKOSKY: Okay. Procedurally does 22 staff have -- What is staff's position as to the procedural 23 mechanism for including or introducing the pipeline into this 24 particular AFC? Is it your position that this is something 25 that will require a separate data adequacy review and Capitol Electronic Reporting (916) 967-6811 71 1 acceptance by the Commission or is it something that the 2 Committee will just, once the data is submitted, treat as 3 part of the project? 4 MR. BUELL: It is our position that it would not 5 require a data adequacy review. We have based our 6 informational requirements on our data adequacy guidelines 7 but it does not require a determination by the full 8 Commission. 9 HEARING OFFICER VALKOSKY: Okay. Does it require a 10 determination by staff? 11 MR. BUELL: I think -- 12 MS. HOUGH: We'll let you know if we don't have 13 enough information to do the analysis. 14 HEARING OFFICER VALKOSKY: That's exactly where I'm 15 going, Ms. Hough. When will you let the Committee know? 16 MS. HOUGH: Well, after you get the information on 17 June 15th. You're asking for a certain number of days after 18 June 15th -- 19 HEARING OFFICER VALKOSKY: Yes, I am. 20 MS. HOUGH: -- to get some sort of a status report? 21 HEARING OFFICER VALKOSKY: Yes. And the same will 22 obviously go for CURE too as to whether they view the need 23 for any additional information after we see the submittal. 24 (Thereupon, tape 1 was changed 25 to tape 2.) Capitol Electronic Reporting (916) 967-6811 72 1 COMMISSIONER SHARPLESS: I just heard that she is 2 not going to be able to get absolutely everything, all the 3 survey data by June 15th. So we already know that the answer 4 is going to be they won't have everything. 5 MS. CUELLAR: You will have the survey data sheets 6 but we can't guarantee you will have the complete write-up at 7 that point, no. 8 MR. WOLFINGER: The data will all be in. 9 MS. CUELLAR: But I also wanted to mention that we 10 are in the process of preparing these documents going back to 11 data requests that we have received both from staff and from 12 intervenors and taking those into account when we're doing 13 the write-ups for this gas pipeline. So there's things we 14 had to address for other linears on the project, we are 15 intending to address those at this point as well. 16 COMMISSIONER SHARPLESS: When beyond June 15th 17 might we get the write-ups? 18 MS. CUELLAR: It would only be the write-up for the 19 wildlife portion of the biological resources section and it 20 would be prior to June 30th, July 1st. You will have the 21 complete botany portion of that section by the 15th of June. 22 COMMISSIONER SHARPLESS: Right. 23 HEARING OFFICER VALKOSKY: So, Mr. Buell, I'm still 24 waiting for an answer. 25 MR. BUELL: Okay. The question being, when could Capitol Electronic Reporting (916) 967-6811 73 1 staff provide an indication of whether or not we believe the 2 information is complete. 3 HEARING OFFICER VALKOSKY: Correct. 4 MR. BUELL: I'm going to take a stab and say within 5 three weeks of receiving that information. So that would be 6 June 15th plus three weeks. 7 HEARING OFFICER VALKOSKY: Plus three weeks, okay. 8 MR. BUELL: Which would be the first week in July, 9 I believe. 10 HEARING OFFICER VALKOSKY: Mr. Joseph, is that a 11 good approximation of the time that CURE would anticipate for 12 being able to review the information? 13 MR. JOSEPH: I'm willing to say three weeks is a 14 good estimate. It's a little hard to say without seeing how 15 much volume of information we're going to get. 16 HEARING OFFICER VALKOSKY: I understand that, I 17 understand that, but for the purpose of present discussion. 18 MR. JOSEPH: For the purpose of present discussion 19 three weeks seems like a reasonable estimate. I did want to 20 address a couple of other things that have come up in the 21 discussion along the way here. I think Ms. Cuellar said that 22 they will need a Habitat Conservation Plan and they are 23 hoping to shorten the 150 day estimate that staff had. I 24 would first note that that's 150 days after the Habitat 25 Conservation is prepared and the environmental analysis is Capitol Electronic Reporting (916) 967-6811 74 1 done. And having some experience with these HCP's it is 2 inconceivable that if they have to do an HCP that it won't 3 affect the schedule in this case. These things take a long 4 time. 5 COMMISSIONER SHARPLESS: Yes. And I think we are 6 going to be dealing with the realities of the schedule a 7 little bit later. 8 MR. JOSEPH: Right. I think there is one other 9 item which is related to this but somewhat different. We 10 have talked so far about the BLM and Fish and Wildlife 11 Service approval of this linear corridor for the new gas 12 pipeline. At the April 30th workshop, two days after our 13 last Committee Conference, the applicant stated that they had 14 not yet applied for permits under Section 10 of the 15 Endangered Species Act for any of the other linears. 16 Now the conversations with that may have started 17 since that time but the other linears also need to receive 18 approvals and apparently that process as of three weeks ago 19 had not even begun. So I think that has to be part of the 20 scheduling discussion because those aspects will require a 21 substantial amount of time from Fish and Wildlife Service. 22 COMMISSIONER SHARPLESS: Staff, do you have any 23 comment on that? I didn't see that notation in your status 24 report. 25 MR. BUELL: I'm looking at our May 15th status Capitol Electronic Reporting (916) 967-6811 75 1 report, page three, and I believe we did discuss the need for 2 the applicant to provide information for the 10(a)(1)(b) 3 permit and/or the Section 7 consultation by BLM, depending 4 upon exactly what regulations would apply in this case or 5 what agencies would assume responsibility for review of the 6 project, either in part or in total. So we concur that there 7 is a need to file information with the US Fish and Wildlife 8 Service and it is not just for the additional pipeline but 9 for other linears. 10 COMMISSIONER SHARPLESS: Did you calculate that 11 into your schedule that you outlined in your May 15th? 12 MR. BUELL: I believe that we had identified that 13 as a -- that the applicant needed to provide it by June 15th. 14 The information to the agencies that was required for those 15 permits and consultations. We did not require the applicant 16 to actually have provided those agencies analysis at that 17 point in time but to actually provide the information to the 18 federal agencies. 19 COMMISSIONER SHARPLESS: And when in your schedule 20 did you calculate the analysis being included in our process? 21 MR. BUELL: I believe the footnote on page three 22 indicates that it -- the last sentence. Footnote number two 23 indicates that it could be as much as 150 days for that 24 process. That would place it very late in staff's schedule 25 for this project. Post-hearings, perhaps. Capitol Electronic Reporting (916) 967-6811 76 1 This goes again to the issue, I think, that Caryn 2 Hough raised earlier about there being a desire of past 3 committees to have some indication that federal agencies are 4 likely to make affirmative findings on projects. There is no 5 specific regulation requiring that that happen but it's a 6 matter of the Committee's preference on when or what level of 7 information they need from those agencies that the project 8 would likely be approved. Obviously, if those agencies were 9 to deny the permit then the project couldn't be constructed. 10 Caryn, do you have something you want to add? 11 MS. HOUGH: Just that in addition if the federal 12 agencies were to impose permit requirements that the Energy 13 Commission didn't impose they would still be required of the 14 project, which would make our permit and the federal permits 15 inconsistent, which is something that we would recommend that 16 you avoid. 17 COMMISSIONER SHARPLESS: I thought that we were 18 required to look at all the applicable federal, state and 19 local and somehow this is like -- 20 MS. HOUGH: You are required to do so and to make 21 findings about whether or not the applicant is going to be 22 able to comply with them. What has happened in past siting 23 cases with federal permits is that the application process is 24 started and the Committee has gone ahead and held hearings 25 and taken evidence that the process has started and that Capitol Electronic Reporting (916) 967-6811 77 1 everything is going well. And they use that, the Commission 2 uses that as a basis for a conclusion that the project is 3 likely to comply. 4 You typically have a good sense of what conditions 5 may or may not apply at the time that you write your final 6 decision. It gets back to that question of, do you have 7 evidence in the record that indicates to you that a project 8 is likely to be able to comply and if so under what 9 conditions. 10 COMMISSIONER SHARPLESS: Well, have these been 11 projects that have been dealing with the Endangered Species 12 Act? 13 MS. HOUGH: The specific permits that I'm aware of 14 are water permits and PSD permits, which now, of course, are 15 largely delegated back to the state and to the individual 16 districts. Mr. Valkosky may be able to provide you with 17 more -- 18 COMMISSIONER SHARPLESS: I think that is a whole 19 different story than the Endangered Species Act myself 20 because the Endangered Species Act, as we know, is one of 21 those issues that can be very contentious. 22 MS. HOUGH: That's correct, it can be, and that's 23 why we encourage -- 24 HEARING OFFICER VALKOSKY: Typically it would also, 25 if an endangered species is involved, have in the record at Capitol Electronic Reporting (916) 967-6811 78 1 the time of our evidentiary hearings a biological opinion if 2 appropriate from the California Department of Fish and Game. 3 I cannot recall a case where you have had issues other than 4 the PSD permit and the final permit from the regional water 5 quality control board outstanding at the time of 6 certification and also at the time of hearings. 7 COMMISSIONER SHARPLESS: And as you say, Prevention 8 of Significant Deterioration permits are something that are 9 generally delegated back, especially in California if you are 10 in any district that is non-attainment. 11 MS. HOUGH: Right. I'm referring back to cases 12 that happened a number of years ago before there was as much 13 delegation as there has been. 14 COMMISSIONER SHARPLESS: But I think it leaves 15 altogether the wrong impression if we hold out the 16 possibility that we could go forward on a project without 17 resolving these issues. 18 MS. HOUGH: We would prefer to if -- Again, it is 19 the same sort of issue that we talked about, letters of 20 intent and letters to serve. We want to have confidence that 21 the agencies that are involved are going to issue the permit 22 and we want to have confidence that we know what the 23 conditions are because they will have an effect on staff's 24 assessment of environmental impacts. 25 MR. JOSEPH: For the Committee's benefit, in the Capitol Electronic Reporting (916) 967-6811 79 1 other pending siting case, the Sutter Power Project Case, all 2 of this Endangered Species Act and coordination with the 3 federal agency was done at the beginning. So the plan is 4 that the Commission's documents will be the draft and final 5 environmental impact statements for the case and the 6 projected schedule is that there will be a biological opinion 7 which is included right up front. It's because the process, 8 all the process was started at the beginning and done in a 9 coordinated fashion, coordinated and consistent fashion. 10 COMMISSIONER SHARPLESS: That's nice to know but we 11 are what we are and we're going to deal with what we can deal 12 with. I think it's just that we have got to be very clear 13 with everybody in this room what the expectation is. I don't 14 want to leave sort of the wrong expectation that we might be 15 considering that we could possibly permit or certify this 16 project if there were still those issues hanging fire with 17 respect to crossing BLM territory. 18 MR. THOMPSON: I would submit, Madam Commissioner, 19 that we are really too early to make any kind of decision on 20 that and I would urge that we have some months to determine 21 if we have issues or not have issues and to see if BLM -- 22 COMMISSIONER SHARPLESS: You know, I'm not sure 23 that we have months. If you look at the way the schedule is 24 mapped out the more time that we spend waiting to resolve 25 issues the more time that -- We are not discussing the Capitol Electronic Reporting (916) 967-6811 80 1 schedule yet but we can't help, but. The more time that it 2 means we have to push the schedule back. And that's really 3 what it means. 4 MR. THOMPSON: I don't believe we're waiting. 5 COMMISSIONER SHARPLESS: Pardon me? 6 MR. THOMPSON: I don't believe we're waiting on 7 these issues, I think we are going forward on the issues. 8 All I'm suggesting is that it is hard to sit here in May and 9 for us to tell you what we are going to put into the record 10 in August, September or October or how federal agencies will 11 react later this year. 12 COMMISSIONER SHARPLESS: Yes, but we have to build 13 the record in order to put together the FSA. Well, staff has 14 to build the record. 15 MR. THOMPSON: Staff. 16 COMMISSIONER SHARPLESS: Staff has to build the 17 record. This is highly unusual to have these many status 18 conferences but the Commission is really attempting to 19 provide as much assistance to this applicant as we possibly 20 can. But in order that we can make sure that when the 21 application goes to adjudication and finally to the 22 Commission that we have a strong record that we can make a 23 decision we are making extreme efforts here to try to 24 facilitate the process. 25 And I appreciate what you're saying, Mr. Thompson, Capitol Electronic Reporting (916) 967-6811 81 1 but time is wasting here and I'm real concerned about it. We 2 already have a preliminary draft, a first draft staff 3 assessment, we will have a second one, we will have a final 4 one. And we want to -- You know, we would like it as 5 complete as we can at the time we do that for our 6 adjudication process. And if we're talking about maintaining 7 the one year clock on this project we have already passed by 8 significant deadlines. So scheduling is something we have 9 later on in the agenda but it seems like every time we talk 10 about an item we get back into it. 11 MR. THOMPSON: I would like to point out that the 12 record in front of you consists not only of what the staff 13 puts in but what other parties, including the applicant put 14 in. The time to put in testimony is not now or June or July, 15 it is August. To pin everything on the Staff Analysis puts 16 us in a difficult position, especially when the requirements 17 keep growing, as we may point out later. So I would just 18 point out that all of the testimony -- 19 COMMISSIONER SHARPLESS: I don't think the 20 requirements have grown. 21 MR. THOMPSON: Indeed they are. 22 COMMISSIONER SHARPLESS: Because the new pipeline 23 proposal that came in came in well after this project was 24 deemed complete. 25 MR. THOMPSON: That is true. Capitol Electronic Reporting (916) 967-6811 82 1 COMMISSIONER SHARPLESS: Right. You know, I think 2 that the information requirements that we are asking for are 3 not growing, what the problem is is trying to get closure on 4 the issue and the continued questions of trying to get that 5 information so we can do a proper analysis. 6 MR. THOMPSON: I was not talking about Biology when 7 I made that statement. If we get into Air Quality I can 8 point out where I think the requirements have grown. But 9 what I really wanted to say is that when you as the 10 Commissioners assigned to this case and Judge Valkosky take 11 the evidence it is going to be from all of the parties and it 12 is going to be the best evidence we have at the time. 13 COMMISSIONER SHARPLESS: Don't you think it's 14 within the applicant's best interest to make sure that when 15 we start that adjudication process that the analysis is as 16 complete as possible and not try to build the case entirely 17 through the adjudication process? 18 MR. THOMPSON: Yes, and I believe -- 19 COMMISSIONER SHARPLESS: Don't you think that is in 20 the best interest of the applicant? 21 MR. THOMPSON: Yes. 22 COMMISSIONER SHARPLESS: Okay. 23 MR. THOMPSON: Absolutely. 24 COMMISSIONER SHARPLESS: Then we're agreed on that. 25 MR. THOMPSON: I'm pleased. Capitol Electronic Reporting (916) 967-6811 83 1 COMMISSIONER SHARPLESS: Okay. Okay, Stan. And 2 then I think I'm going to break at about 12 o'clock. We'll 3 come back, we'll do Air Quality, we'll do Scheduling, and 4 hopefully we'll be out of here within an hour and a half 5 after that. Okay. 6 HEARING OFFICER VALKOSKY: Just a couple of real 7 quick qualifying questions. Mr. Buell, when are you going to 8 start negotiating with the federal authorities for an MOU? 9 Could I have a date, an approximate date? 10 MR. BUELL: I don't have that planned in my 11 schedule so I -- As soon as possible. We have workshops 12 scheduled next week, it makes it difficult to plan such 13 meetings. We have two days committed to being in 14 Victorville. 15 HEARING OFFICER VALKOSKY: So within a week or ten 16 days? I mean, you know, I'm looking at a very short-term 17 type of thing? 18 MR. BUELL: Certainly within the first week of 19 June. 20 HEARING OFFICER VALKOSKY: Okay. How long would 21 you anticipate that process will take before you could 22 achieve an MOU? 23 MR. BUELL: Two to three -- 24 HEARING OFFICER VALKOSKY: Obviously you have got 25 models available. Capitol Electronic Reporting (916) 967-6811 84 1 MR. BUELL: Probably two to three weeks. 2 HEARING OFFICER VALKOSKY: Okay. So we're looking 3 at an MOU somewhere around late June, approximately? 4 MR. BUELL: That would be my guess. 5 HEARING OFFICER VALKOSKY: Okay, thank you. 6 Ms. Cuellar, I just want to confirm my understanding. You 7 indicated that you are filing the right-of-way application 8 with BLM next week. 9 MS. CUELLAR: Within the week, within a week, yes. 10 HEARING OFFICER VALKOSKY: Okay, all right, within 11 a week. When are you filing the application for the Section 12 7 and/or 10 permits for the other linear facilities? 13 MS. CUELLAR: Well, it's our intent -- As I said, 14 we're trying to get meetings scheduled with Fish and Wildlife 15 Service and the Bureau of Land Management and it is our 16 intent to try and move this along as one project and not 17 separate out the gas pipeline from the other linears. 18 HEARING OFFICER VALKOSKY: Okay, so -- 19 MS. CUELLAR: So it could all be permitted under 20 one. 21 HEARING OFFICER VALKOSKY: Right. So we're looking 22 at an approximate date mid-June? Is that the time frame 23 we're looking at? I'm just trying to get a handle on this. 24 MS. CUELLAR: I would say probably end of June. 25 We're continuing to work on our draft of our Habitat Capitol Electronic Reporting (916) 967-6811 85 1 Conservation Plan. Until this meeting occurs with BLM and 2 Fish and Wildlife Service there has been no official 3 determinations yet as to whether or not we will be required 4 under the Endangered Species Act to comply with Section 7 or 5 Section 10. 6 HEARING OFFICER VALKOSKY: Right, okay. 7 MS. CUELLAR: So that's the importance of trying to 8 get both these agencies together. 9 HEARING OFFICER VALKOSKY: Right, so -- 10 MS. CUELLAR: It proved a little difficult. 11 HEARING OFFICER VALKOSKY: So actually we won't 12 know that for approximately a month; is that -- 13 MS. CUELLAR: I would say a couple of weeks. 14 HEARING OFFICER VALKOSKY: Okay. 15 MS. CUELLAR: We're still throwing around some 16 tentative dates and people are trying to -- the agencies are 17 trying to clear their calendars. So there has been no 18 official determination made by either one of those federal 19 agencies. 20 HEARING OFFICER VALKOSKY: Okay, thank you. 21 COMMISSIONER SHARPLESS: Is that it, Mr. Valkosky? 22 HEARING OFFICER VALKOSKY: I think so. 23 COMMISSIONER SHARPLESS: Are there any other -- Are 24 there any other issues on the pipeline that we need to bring 25 up? Why don't we take a lunch break. We will be back here Capitol Electronic Reporting (916) 967-6811 86 1 at one o'clock. And as I said, we will -- I'm sorry. 2 MR. JOSEPH: I was just going to ask for your 3 indulgence to make that 1:15 if that is possible. 4 COMMISSIONER SHARPLESS: Okay, let's see. That 5 will shorten your testimony? 6 MR. JOSEPH: By 15 minutes. 7 COMMISSIONER SHARPLESS: Yes, okay fine, 1:15. 8 Thanks a lot. 9 (Thereupon, the luncheon recess 10 was taken off the record.) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Capitol Electronic Reporting (916) 967-6811 87 1 A F T E R N O O N S E S S I O N 2 COMMISSIONER SHARPLESS: Okay. We're back, we're 3 going to start, my colleague will be joining us shortly. As 4 I indicated I think we have about two items left. We will 5 start on Air Quality this afternoon. 6 MR. CARROLL: Commissioner, I did have one follow- 7 up item from this morning. I have the cite that you 8 requested on the delegation of the toxics program. 9 COMMISSIONER SHARPLESS: Good. 10 MR. CARROLL: It was delegated -- It appeared in 11 the Federal Register on July 23rd of 1992 and the cite is 57 12 Federal Register 3-2-7-2-6 and it became effective on August 13 1st of 1992. That was the final authorization. There were 14 some interim and partial authorizations prior to that but 15 that was the final. 16 COMMISSIONER SHARPLESS: Fine, thank you very much, 17 helpful. Okay, Air Quality. Is that you, Mr. Wolfinger? 18 AIR QUALITY 19 MR. WOLFINGER: Yes, it is. 20 COMMISSIONER SHARPLESS: Okay. 21 MR. WOLFINGER: Let's see. I did write a letter. 22 Let's see, going through Air Quality. I did get a letter 23 from Rick Buell saying what he would like to see in the 24 letters of intent and I have instructed Mike to set us up 25 some standard letters of intent and option agreements and Capitol Electronic Reporting (916) 967-6811 88 1 agreements, which we did. I notified -- Let's see, if this 2 was -- Let's see. I notified Stan on, I believe it was May 3 the 6th or 7th that we would have our letters of intent by 4 June 15th. So we have already started that process. 5 To give you an update, we have issued about five of 6 those letters of intent. I have met with four of the parties 7 personally and we are in the negotiations for those as we 8 speak. We have about two more letters to send off or three 9 more letters to send off and some more negotiations to do. 10 So that is proceeding. 11 We provided turbine data a day late on May the 12th 12 and the data was not complete. We were missing basically two 13 pieces of information, the start-up data on the Siemens 14 machines, although we had the full load data, and the start- 15 up data on the Westinghouse/GE updated, if they were giving 16 us any update, and we did not -- have not received that and 17 we're still in attempts to get that. But we did provide the 18 data, all the baseload data for all the machines, 100 percent 19 load data, and start-up data for Westinghouse, GE and ABB. 20 COMMISSIONER SHARPLESS: Thank you for that. 21 MR. WOLFINGER: The start-up data is not 22 guaranteed, it should be noted that it never is guaranteed by 23 the manufacturers. They don't guarantee start-up data, so 24 just as a point of reference on this. Let's see. 25 We also notified you that the Mojave Desert Air Capitol Electronic Reporting (916) 967-6811 89 1 Quality Management District was in the process of going 2 through the banking applications and that was progressing. 3 And I guess rather than speaking for them we have 4 representatives from there and I would suggest that we ask 5 them to give you the update at least. We did put something 6 in our thing but I think it's probably appropriate to ask 7 them for the update as to where they stand on that aspect. 8 And I think that is all the issues on -- Yes. The 9 PDOC has been issued on the 15th and I believe copies are 10 available outside and they have also been -- 11 COMMISSIONER SHARPLESS: It arrived. 12 MR. WOLFINGER: Pardon me? 13 COMMISSIONER SHARPLESS: This morning from Dockets. 14 MR. WOLFINGER: Right. And we also in that interim 15 too we have -- When it became available to us where the SCR 16 vendors were looking at guaranteeing lower numbers we met 17 with -- And I think we -- I don't think we brought this up 18 with you because I think it was since then, I think we 19 brought it up down in Victorville. I think we mentioned to 20 Rick Buell that we had been talking with the SCR vendors, 21 specifically Inglehart and Mitsubishi, looking at what kind 22 of guarantees, what aspects they could do. And in the 23 interim period we have reduced the full load guaranteed 24 emission point from a 4.0 ppm for NOx down to a 3.0 ppm for 25 NOx and so notified the Mojave Desert Air Quality Management Capitol Electronic Reporting (916) 967-6811 90 1 District who has incorporated that into their PDOC that they 2 have submitted. 3 COMMISSIONER SHARPLESS: Okay, yes, I think you did 4 hit the points that we asked you to respond to in the Order. 5 I will just note that we did receive these and I see the 6 docket date is the 19th. I just received my copy this 7 morning so I have not had a chance to look through this. 8 MR. WOLFINGER: What was the 19th? 9 COMMISSIONER SHARPLESS: When we received the PDOC. 10 MR. WOLFINGER: Oh, the PDOC, that's right. 11 COMMISSIONER SHARPLESS: When we received the PDOC. 12 MR. WOLFINGER: Oh, I'm sorry, right. 13 COMMISSIONER SHARPLESS: So I haven't had a chance 14 to really look at this and see what is in it. Oscar, would 15 you like to come up and talk a little bit about perhaps where 16 you are in your process, when you think you might get your 17 FDOC about the emission reduction credit issue. 18 MR. HELLRICH: Well, the PDOC has a 30 day comment 19 period. 20 COMMISSIONER SHARPLESS: Right. 21 MR. HELLRICH: And we have stated that we intend to 22 have the final DOC issued on or about the 19th of July. If 23 your schedule calls for the 18th of July we can possibly do 24 that for you. I have brought Alan De Salvio from the 25 District who is working the ERC issue. If you care to have Capitol Electronic Reporting (916) 967-6811 91 1 him come up he can speak to you on that issue. 2 COMMISSIONER SHARPLESS: Okay, but just one last 3 point on the DOC and that is that you're expecting your board 4 to deliberate on it by the 19th and send it to us or is that 5 the date that has been set up for board deliberation or what? 6 MR. HELLRICH: No, there is no board deliberation 7 on a DOC. 8 COMMISSIONER SHARPLESS: No board deliberation on 9 the DOC. Do you have a workshop or a hearing process 10 involved in this? 11 MR. HELLRICH: If there are significant comments we 12 will call for one, yes. 13 COMMISSIONER SHARPLESS: Okay. So until you see 14 what comments you get you have not yet set up a hearing. 15 MR. HELLRICH: That's correct. 16 COMMISSIONER SHARPLESS: Okay. Thank you, Oscar, 17 thank you for coming. And the gentleman who was going to 18 come forward and talk about emission reduction credits? 19 MR. DE SALVIO: Alan De Salvio with the Mojave 20 Desert AQMD. We have to date received 11 applications for 21 emission reduction credits. We have acted on one and that 22 one is mentioned with the proposed letters of intent. That's 23 about all I can really say at this point. We are proceeding 24 with the remaining applications. 25 COMMISSIONER SHARPLESS: I think that the applicant Capitol Electronic Reporting (916) 967-6811 92 1 in their letter indicated that the air district had informed 2 them that they were working on applications for banked ERC's 3 and expected to process these for release by the end of May. 4 Was that a conversation with you and is that the processing 5 of all 11? What does that statement mean to you? 6 MR. DE SALVIO: That means that we expect to 7 indicate to those remaining 10 ERC applicants whether or not 8 their applications are complete or incomplete, by the end of 9 this month. 10 COMMISSIONER SHARPLESS: And then what is your 11 process after that? 12 MR. DE SALVIO: Then we have an extensive, possibly 13 very extensive in some cases, analysis process. It depends 14 on the nature of the application. 15 COMMISSIONER SHARPLESS: And that would be internal 16 analysis? 17 MR. DE SALVIO: Yes. Which culminates in the -- 18 COMMISSIONER SHARPLESS: Would you be doing all 11 19 applications at the same time in the analysis or are you 20 staging them or how does that work? 21 MR. DE SALVIO: They are being -- They are being 22 dealt with sequentially. 23 COMMISSIONER SHARPLESS: Sequentially. So when you 24 say it is a long process, when do you think your process 25 might generate enough ERC's for this project? Capitol Electronic Reporting (916) 967-6811 93 1 MR. DE SALVIO: That's -- Well, we had issued -- 2 Just to give you an example, one of the applications comes 3 from Mitsubishi Cement, that's one of the facilities in 4 question, and we issued to them prior to this date a letter 5 of incompleteness regarding their application. So I really 6 can't answer your question because we need to get a response 7 to that letter from Mitsubishi before we can even proceed 8 with the analysis. It's difficult to say. I feel that I 9 just really can't answer that. It shouldn't take too long 10 once we get enough information, I would say 30 to 60 days in 11 the case of Mitsubishi Cement. On the remaining applications 12 we have yet to even get to the completeness stage so I really 13 can't answer that. 14 COMMISSIONER SHARPLESS: Are there any other 15 agencies involved in your analysis besides yourself? 16 MR. DE SALVIO: No, we are the agency that makes, 17 that reaches the local decision; however, in the case of 18 Mitsubishi and I think every other proposed letter of intent 19 in this group, or application it's called, each action will 20 require notification of both ARB and EPA. And of course 21 we're required to address those comments as we would any 22 other public comments. So the possibility exists for some 23 further gyrations prior to filing a decision. 24 COMMISSIONER SHARPLESS: Well, can you give me an 25 idea then. Once you do your analysis and you find the Capitol Electronic Reporting (916) 967-6811 94 1 application is complete is that it for your agency and then 2 you notify the Air Board and USEPA and give them a comment 3 period? 4 MR. DE SALVIO: Yes, there is a -- Once we find an 5 application complete we are required by our rules to begin a 6 30 day notice period which also involves noticing ARB and EPA 7 depending on the nature of the application. And in the case 8 of the critical facilities for this project it's the size of 9 the application, and so of course for these four facilities 10 it will be large enough to notify those agencies. So there 11 will be a 30 day comment period. At the end of that period 12 we have the ability based on comments to then issue the 13 credits, the performance certificate. So it could be as 14 short as 30 days from the moment that we find the application 15 complete that credits would be available, that's the absolute 16 minimum. 17 COMMISSIONER SHARPLESS: Okay. Well, that presents 18 somewhat of a dilemma here for the applicants and us. I 19 appreciate you coming up. Are there any questions of this 20 gentleman? Mr. Joseph. 21 MR. JOSEPH: If I understand it your process is you 22 send out a letter of incompleteness, the applicant responds 23 with the information that you requested, you then do the 24 analysis that you said could be extensive or very extensive. 25 Then you issue a proposed ERC determination including a Capitol Electronic Reporting (916) 967-6811 95 1 revised permit for the facility for a 30 day comment period. 2 MR. DE SALVIO: The permit chain would be required 3 prior to the issuance and I would say in most cases. 4 MR. JOSEPH: And then you evaluate whatever 5 comments you get and make a final decision? 6 MR. DE SALVIO: Right. 7 COMMISSIONER SHARPLESS: Staff? 8 MR. BUELL: I have just one question. If the 9 minimum time is 30 days, the maximum time assuming a complete 10 application, could we guess at that? 11 MR. DE SALVIO: No, because -- 12 MR. BUELL: Okay. 13 MR. DE SALVIO: But of course any extensions as far 14 as agreements are, an understanding on both parties, are from 15 AQMD and the applicant. But, you know, in the case of some 16 of these applications there's some issues that need to be 17 resolved. I mean, we're going to make every effort we can to 18 look at them promptly. 19 MR. BUELL: Okay, thank you. 20 MR. JOSEPH: One other question. 21 COMMISSIONER SHARPLESS: Mr. Joseph. 22 MR. JOSEPH: Do you remember when you sent the 23 incompleteness application to Mitsubishi? 24 MR. DE SALVIO: The letter of incompleteness was 25 this week. I think we acted on a Public Records Act prior to Capitol Electronic Reporting (916) 967-6811 96 1 its being sent, we'll provide a copy to you. 2 MR. JOSEPH: Thank you. 3 COMMISSIONER SHARPLESS: Yes, Stan. 4 HEARING OFFICER VALKOSKY: What's your level of 5 confidence that you will have decided whether or not the 6 applications are complete by the end of this month? 7 MR. DE SALVIO: Any particular applications you 8 are -- 9 HEARING OFFICER VALKOSKY: No, I mean just the ten 10 outstanding applications. Are you sure that by the end of 11 this month you will have decided whether or not those 12 applications are complete? 13 MR. DE SALVIO: We will have determined -- This is 14 just to clarify an issue. We will have determined by the end 15 of the month whether -- which ones are complete and which 16 ones are incomplete and have notified the applicants 17 accordingly detailing what additional information we need. 18 Yes, we're confident of that. 19 HEARING OFFICER VALKOSKY: Okay. 20 MS. SHAPIRO: But then let's say you found five of 21 them complete. Then you do analyses for some period that we 22 haven't estimated yet. 23 MR. DE SALVIO: I believe -- Oscar may be able to 24 help me. I think it's a 30 day period we're required to -- I 25 think we have at least -- We are required by our rules no Capitol Electronic Reporting (916) 967-6811 97 1 more than 30 days later to then either issue or notify the 2 applicant that we need further information to complete the 3 analysis. 4 MS. SHAPIRO: And then do you go out for the 30 5 days comment after that or does that include -- 6 MR. DE SALVIO: The 30 day public comment period is 7 triggered by our finding of completeness and proposed 8 issuance of the ERC's. 9 MS. SHAPIRO: Okay. Okay. 10 MR. DE SALVIO: All of which -- That action 11 basically requires all the blanks to be filled prior to that. 12 MS. SHAPIRO: Thank you. 13 COMMISSIONER SHARPLESS: How long have you had your 14 banking rule? 15 MR. DE SALVIO: Since '94, approximately. 16 COMMISSIONER SHARPLESS: And how many applications 17 have you had to the bank? Are these the first 11? 18 MR. DE SALVIO: These are the -- We have had 11 19 applications, basically, beginning with the adoption of that 20 rule. None have been acted on except for one just recently. 21 COMMISSIONER SHARPLESS: So since 1994 these are 22 the only 11 applications that you have gotten for the bank? 23 MR. DE SALVIO: Correct. 24 COMMISSIONER SHARPLESS: And when did they come in? 25 I'm just curious. Capitol Electronic Reporting (916) 967-6811 98 1 MR. DE SALVIO: Since '94 they have been scattered. 2 I believe we can provide this information to the CEC, 3 certainly in definitive terms. We received a large group in 4 June of 1996. 5 COMMISSIONER SHARPLESS: Okay. 6 MR. DE SALVIO: There was an application deadline 7 for certain actions in '96. 8 COMMISSIONER SHARPLESS: Okay. Well, I want to 9 thank you for coming up this way and giving us that 10 information. It helps us know what our expectations might be 11 in scheduling. I certainly would hope that the process moves 12 as expeditiously as possible. I think you know why. 13 MR. DE SALVIO: We agree. 14 COMMISSIONER SHARPLESS: Okay, thank you. Staff, 15 what do you have to say about Air Quality today? 16 MR. BUELL: Well, first I would like to say that 17 staff went and checked on the water modeling data that we had 18 identified earlier as being missing and stand corrected, the 19 information was provided on March 31st. I believe that's the 20 right date. So for the record I clarify that point. 21 COMMISSIONER SHARPLESS: Good. 22 MR. BUELL: Regarding the information that 23 Mr. Wolfinger provided earlier. We are in concurrence. 24 There is data that is still outstanding on the Siemens 25 turbine and also on the Westinghouse 501-G. Capitol Electronic Reporting (916) 967-6811 99 1 The other bit of information that staff would point 2 out as being missing at this point is the applicant had 3 provided a revised Air Quality Impact Analysis as part of the 4 submittal on May 12th that identified impacts from the 5 project. What was missing with that submittal was the input 6 and output files that would be necessary for staff to 7 understand the modeling analysis that was conducted. If that 8 would be provided we could conclude that that information is 9 complete. 10 COMMISSIONER SHARPLESS: Okay. 11 MR. WOLFINGER: Is this for the one -- I'm sorry. 12 Is this for the one -- Is this for this one hour NOx and the 13 one hour and eight hour CO impact analysis? Is that -- Is 14 that the files you're looking for? 15 MR. BUELL: Yes, yes. 16 MR. WOLFINGER: Okay. 17 COMMISSIONER SHARPLESS: Maybe I can ask staff. 18 Staff, are you going to cover the PDOC? What are your next 19 steps with the PDOC? Wait until the final DOC comes? 20 MR. BUELL: Staff suggested and I believe staff 21 will be working on preparing comments on the Preliminary 22 Determination of Compliance and submitting them within the 30 23 day comment period that the District has identified. We'll 24 be doing that by June 19th. I think that's the date the 25 District requested comments back. Capitol Electronic Reporting (916) 967-6811 100 1 COMMISSIONER SHARPLESS: And what are you looking 2 for, in terms of, what kinds of issues would you be 3 commenting on? What our CEQA requirements would require of 4 us in our analysis? 5 MR. BUELL: That and trying to gain a better 6 understanding of what the basis was for the district's 7 conclusions about compliance with LORS so that we understand 8 that fully. 9 COMMISSIONER SHARPLESS: Okay, great. ERC's. Do 10 you have any comments on the ERC's? 11 MR. BUELL: Not at this time. Nothing new to add. 12 COMMISSIONER SHARPLESS: Okay. I have a question 13 of you, though. Did you in your schedule calculate in the 14 amount of time that it might take to process these 15 applications? 16 MR. BUELL: Our schedule -- 17 COMMISSIONER SHARPLESS: In your status report. I 18 can't remember. I think it was your May 15th report where 19 you have a schedule. 20 MS. SHAPIRO: Yes, it is the May 15th report. 21 MR. BUELL: What that schedule identifies is that 22 the applicant needs to provide the letters of intent for 23 those emission offsets by June 15th as the applicant had 24 indicated. As far as the time it would take to actually bank 25 those ERC's, staff had not included that in our schedule as a Capitol Electronic Reporting (916) 967-6811 101 1 mandatory or a performance date that needed to be met by any 2 party. 3 COMMISSIONER SHARPLESS: Okay. Is there anything 4 else you would like to say regarding the ERC's and the 5 scheduling, Mr. Wolfinger? 6 MR. WOLFINGER: No. 7 COMMISSIONER SHARPLESS: Done the best you can. 8 Okay, Mr. Joseph. 9 MR. JOSEPH: Thank you, Commissioner. With respect 10 to ERC's, I feel like I'm sort of sounding like a broken 11 record, but I realize that phrase may become increasingly 12 dated. You know, we still have nothing but promises of 13 future performance. And we have an expectation that we'll 14 get letters of intent two months after the Commission's four 15 month grace period. Whether it will or will not happen by 16 that date, I don't know. I think the key for the Commission 17 in responding to that is to adopt the staff's proposal of a 18 performance-based schedule so that if it happens then things 19 move forward and if not then there are consequences to the 20 failure to meet the obligation to keep the dates. 21 I think it will be important to see what the air 22 district does with the ERC applications. To see whether and 23 under what circumstances ERC's are actually banked and 24 whether the letters of intent are letters of intent for ERC's 25 that will truly exist. We're going to have to be able to Capitol Electronic Reporting (916) 967-6811 102 1 analyze whether those ERC's will be mitigation for the 2 project and what the secondary impacts will be. 3 With respect to the preliminary DOC: I have not 4 yet seen it, I assume it is sitting in my in-basket back in 5 my office. But given the likely controversy over the 6 contents we agree with the staff that it is important to have 7 the final DOC before the FSA. 8 I also would note that with the applicant's change 9 from a 4 ppm NOx level to a 3 ppm NOx level for steady-state 10 operations it would be my assumption that that will require 11 increased use of ammonia. That greater volumes of ammonia 12 will be required to make that take place. So that will 13 trigger changes to the information on the amount of ammonia 14 transport and perhaps ammonia storage. So it would seem to 15 me that those are pieces of information which need to be 16 updated if the hypothesis is correct that using SCR to get 17 lower emissions requires greater amounts of ammonia. 18 COMMISSIONER SHARPLESS: Would you care to comment 19 on your comment about EPA's review of the prevention of 20 significant deterioration application? You had something in 21 your letters that said you were not aware of any development 22 regarding EPA's review. Have you any more current 23 information since you wrote that? 24 MR. JOSEPH: No, since I wrote that I have not 25 heard anything else. So far it has been marginally, at least Capitol Electronic Reporting (916) 967-6811 103 1 publicly silent. 2 COMMISSIONER SHARPLESS: Can I ask staff? Staff, 3 are you dealing with that issue? USEPA's prevention of 4 significant deterioration application. 5 MR. BUELL: We have been in contact with EPA. And 6 Mr. Tuan, do you have anything that you would like to add 7 about the status of that? This is Tuan Ngo of our staff. 8 MR. TUAN: We met with the EPA staff about two 9 weeks ago and we asked them about the status of the PSD 10 application. The answer from the EPA staff was they still 11 working on it. Nothing substantial in terms of working on 12 the application since the day they have been deemed complete. 13 COMMISSIONER SHARPLESS: And what is our position 14 on meeting USEPA's determination on PSD? 15 MR. BUELL: I think one point is that earlier we 16 had talked about PSD being delegated to local districts. In 17 this case PSD applications have not been delegated to the 18 Mojave District so we actually need an action by USEPA on 19 this project. In many cases we have deferred the actual PSD, 20 obtaining a PSD permit until after certification. 21 COMMISSIONER SHARPLESS: But in those cases you 22 said it was because of the delegation issue. 23 MR. BUELL: No, those cases were actually prior to 24 there being delegation. It was the normal practice that EPA 25 would issue a permit post our certification process. Capitol Electronic Reporting (916) 967-6811 104 1 COMMISSIONER SHARPLESS: And what is the rationale 2 that we use to allow it to be submitted after the 3 certification process? 4 MR. BUELL: I think it was Caryn who had indicated 5 earlier we had reached a conclusion based upon all the 6 discussions with EPA and our understanding of the issues that 7 a project presented that it was likely -- a project was 8 likely to comply with PSD requirements. And we made that 9 finding or staff made that finding and recommendation to the 10 Committee and their decision on the project was based upon 11 that understanding, that the project was likely to comply. 12 COMMISSIONER SHARPLESS: And is that based on what 13 the district might do in order to meet its requirements? 14 BACT and threshold and emission reduction credits, do those 15 two things tie together? 16 MR. BUELL: That's a separate item. That would be 17 under new source review rules. PSD was the increment 18 consumption and the application of federal BACT requirements. 19 MS. HOUGH: Typically what's happened is that the 20 EPA has given us indication, I think in many instances in 21 writing, that they expect that the project will comply. But 22 there may be a significant period of time before they 23 actually issue the piece of paper that says, this is a PSD 24 permit. 25 COMMISSIONER SHARPLESS: Caryn, can they do that Capitol Electronic Reporting (916) 967-6811 105 1 before the Final Staff Assessment? 2 MS. HOUGH: I don't know what their schedule is for 3 completing PSD permits. 4 COMMISSIONER SHARPLESS: Do we know what their 5 schedule is? 6 MR. TUAN: They won't be -- The final approval from 7 the PSD permit won't be finished until sometime probably 8 March 1999. 9 COMMISSIONER SHARPLESS: No, but we are not talking 10 about the final permit, we're talking about an indication. 11 MR. TUAN: From what they -- From discussion with 12 EPA staff the only thing what they want to do was to comment 13 on the DOC and incorporate all their comments into the DOC, 14 into the preliminary DOC. So that by the time they go into 15 the PSD application they don't have that much a problem. 16 COMMISSIONER SHARPLESS: Okay. So during the -- We 17 can assume that the comments that USEPA makes on the PDOC -- 18 MR. TUAN: Yes. 19 COMMISSIONER SHARPLESS: -- will reflect where they 20 are going, even to the extent of the PSD. 21 MS. HOUGH: I think it's if USEPA makes comments on 22 the PDOC and the District incorporates the comments and 23 recommendations. 24 COMMISSIONER SHARPLESS: Right, right. 25 MS. HOUGH: Right. Capitol Electronic Reporting (916) 967-6811 106 1 COMMISSIONER SHARPLESS: Okay. 2 MR. CARROLL: That is, by the way, consistent. We 3 also have met with Region 9 to talk about this issue and 4 that's very consistent with what we were told. That they 5 intend to minimize their own resource consumption and rely on 6 the PDOC process. And assuming that that is all completed 7 and in place then it would pave the way for them to issue the 8 PSD permit. 9 COMMISSIONER SHARPLESS: Okay. Any other questions 10 on Air Quality? Okay. I think we sort of know where we 11 stand on that issue. 12 SCHEDULE 13 Mr. Valkosky, that now brings us down to the 14 section on the agenda where we were going to review the 15 schedule. Would you like to help the Committee, lead through 16 the schedule discussion, please. 17 MR. JOSEPH: You're giving him the fun part, right? 18 COMMISSIONER SHARPLESS: Well, It's kind of 19 interesting because when you all look at what is required I 20 have noticed that even our own wonderful staff leaves the 21 Committee less and less time to render its own final 22 decision. So we have a Committee perspective that hasn't 23 necessarily been reflected by the discussion and Stan is in a 24 fairly good position to know what that means to us. 25 MR. THOMPSON: And he's leaving. Capitol Electronic Reporting (916) 967-6811 107 1 COMMISSIONER SHARPLESS: He ain't no dummy. 2 HEARING OFFICER VALKOSKY: In examining the various 3 elements of the schedule and the scheduling proposals that 4 have been contained in the parties' filings the Committee has 5 attempted to work out a schedule, one with an expected due 6 date of December 2nd which is the 12 month date, and then the 7 various alternatives. Fundamentally, the Committee has 8 concluded that based on a lot of the factors that are 9 outstanding and a lot of the steps which you have to take 10 before it can achieve a date that frankly it is unclear how 11 we get to a decision date from here, especially a December 12 2nd decision date. 13 The document that I have just handed out, the High 14 Desert Schedule, lists approximately 30 steps which from the 15 Committee's perspective are necessary. The dates reflected 16 are based on the most recent filings of the parties. You 17 will notice that there's only a half-dozen or so dates that 18 are filled in, the rest of the dates are intentionally left 19 blank. The elements reflected on the left hand side of the 20 paper in many cases contain either required intervals or 21 typical intervals that are applicable to each of the 22 elements. 23 This schedule, this document is not intended to be 24 all-inclusive. You will notice, for example, things that 25 typically happen like staff workshops are not included in it. Capitol Electronic Reporting (916) 967-6811 108 1 There is a number of elements which were discussed today 2 which may be lacking because we weren't really aware of it 3 when these were -- when this document was devised. 4 What I would like the parties to do--I'm not 5 suggesting we do it now, I think it would probably be done 6 better in an informal discussion--is basically fill in the 7 blanks. You have got the elements here. If you take 8 exception to any of the elements I think you should indicate 9 that. If there are other elements that in your view based on 10 discussions today should be added, feel free to add them. 11 What the Committee is interested in at this point 12 is getting input from the parties at a detailed level using 13 this High Desert Schedule Draft as a work sheet so that the 14 Committee can then evaluate the input of the parties and come 15 out with a schedule, at least through the FSA, in the near 16 future. Are there any questions on this? 17 COMMISSIONER SHARPLESS: I think the one thing that 18 you may have left out, Stan, was in combination with the 19 issue about a continuation workshop tomorrow. We were 20 thinking that this might be a good time for the parties to 21 get together. Okay. What Stan is saying is that the 22 applicant has thought about perhaps trying to move that up to 23 today. I was going with what staff was suggesting, that 24 there be a continuation for tomorrow of a workshop nature 25 where parties get together and try to, as Stan said, fill in Capitol Electronic Reporting (916) 967-6811 109 1 the blanks. 2 What we're really trying to do here is be 3 realistic. I emphasize, realistic. And what we hope this 4 will do is to point toward an issue that we brought up at our 5 last conference and still is under consideration. And that 6 is a performance-based schedule where dates are established 7 and if dates are missed then there is a slippage based on 8 dates missed. I don't know how else we work this given where 9 we are today with the schedule. 10 We want to give the parties adequate time to talk 11 about this; we want to give the parties adequate time to 12 think about what the schedule means to their participation. 13 And as a Committee we want to make sure that unlike the 14 staff's schedule, the Committee gets adequate time as well to 15 write its Decision draft, Mr. Buell. So that has to be taken 16 into consideration as well. 17 So I would like to open it up right now and have 18 people sort of react to the idea that this be discussed. 19 Actually I'm encouraging and suggesting that it be discussed. 20 But when it is discussed, whether it is tomorrow or whether 21 it is today or when it is, is really up to those of you who 22 are sitting around this table. 23 MR. THOMPSON: Given your comment to Mr. Buell I'm 24 glad I didn't show you my schedule. 25 COMMISSIONER SHARPLESS: What did you give us, Capitol Electronic Reporting (916) 967-6811 110 1 seven days or something? 2 MR. THOMPSON: Well, we basically thought we would 3 write it for you. No, there wasn't much time there. We 4 appreciate this effort and will take this and work with it, 5 we would like to discuss it tomorrow. 6 When we mentioned a continuing workshop this 7 afternoon it was under the understanding that Marc Sazaki may 8 be available in Biology. Since we have Amy Cuellar here it 9 may be a good time to adjourn this format and get with staff 10 and tell them what we're doing, show them the maps we have, 11 et cetera, et cetera, et cetera. 12 But we will take this schedule and we appreciate 13 the effort that Stan Valkosky has done here and we will be 14 prepared to talk about it tomorrow morning. 15 MR. BUELL: Staff is willing to talk about it this 16 afternoon if the applicant is willing to talk about it this 17 afternoon. I don't think all afternoon would be taken up 18 with our discussions with Marc Sazaki so that's another 19 option. 20 COMMISSIONER SHARPLESS: Was it not your 21 suggestion, Mr. Buell, that there be a continuation until 22 tomorrow? Are you changing your view now? 23 MR. BUELL: I guess staff had requested or 24 identified -- had requested a continuation until tomorrow 25 simply because I wasn't sure how long this hearing was going Capitol Electronic Reporting (916) 967-6811 111 1 to last today. And if the opportunity presented to have the 2 discussions today then certainly I think we ought to take 3 that opportunity. All the parties are here. It might save 4 others other important meetings that they have to go to. 5 Caryn Hough just informed me she wasn't going to be here 6 tomorrow morning. 7 COMMISSIONER SHARPLESS: Okay. 8 MR. JOSEPH: That's certainly my preference as one 9 of the out-of-towners. I think it's one thing we share in 10 common is to see if we can get as much done today as 11 possible. 12 COMMISSIONER SHARPLESS: Fine. 13 MR. JOSEPH: Possibly avoid a trip back tomorrow. 14 COMMISSIONER SHARPLESS: That's fine with me. It's 15 really just a suggestion. I know that staff -- I thought 16 staff had more that they wanted to talk about in a 17 continuation meeting than just the schedule but it may have 18 been this Biology issue. I know that you have workshops 19 scheduled for next week in Victorville, I know that. There's 20 like three solid days, one with the Victor Valley Water 21 District and then two with the staff on the preliminary DOC 22 and perhaps some other issues. I wasn't quite sure what they 23 all cover, although I signed the Order to do so. 24 MR. WOLFINGER: I would like to just say that I 25 would like to have the meeting go into tomorrow, I have got a Capitol Electronic Reporting (916) 967-6811 112 1 lot of things to discuss. I mean, one of the things I have 2 been very frustrated in this process is that I haven't been 3 allowed to call meetings and talk to people. I mean, I have 4 asked a number of times. It seems though as I as the 5 applicant don't matter. I mean, I'm the one that asks for 6 them, I asked Stan, and I'm the one that wants the time. 7 COMMISSIONER SHARPLESS: Okay. 8 MR. WOLFINGER: I would like to just say, I would 9 like to have the time. Although maybe other people don't 10 want to take the time I specifically asked for the time and I 11 would like to take it. 12 COMMISSIONER SHARPLESS: Well, I think that staff 13 in their status report said that they would be happy to offer 14 that time to the applicant. 15 MR. WOLFINGER: Good. 16 COMMISSIONER SHARPLESS: We are talking about a 17 continuation in a different format. 18 MR. WOLFINGER: Yes. Great. 19 COMMISSIONER SHARPLESS: It's a workshop format as 20 opposed to a Committee Conference to work out some of these 21 issues that I think you all want to do. 22 MR. WOLFINGER: Thank you. 23 COMMISSIONER SHARPLESS: It's not that your letter 24 has been ignored, we received your letter, but there are 25 quite a few workshops that have been set up. At this point Capitol Electronic Reporting (916) 967-6811 113 1 it looks as though if there are more conferences that will be 2 needed we need to know what they would be about before we 3 agree to have something like every two weeks. So I will 4 leave it up to the parties. If you want to continue after we 5 adjourn this meeting today, that's fine with us, is it not? 6 Do I need to sign something, Stan, as usual, to paste it on 7 the door? 8 HEARING OFFICER VALKOSKY: As usual, you're 9 correct. You can sign a Notice of Continuation for tomorrow. 10 The Notice will read 9 a.m. to 4 a.m. (sic), Office Building 11 8, Room 217, 714 P Street. 12 COMMISSIONER SHARPLESS: What is that? 13 MR. THOMPSON: I won't be here until 4 a.m. 14 MS. HOUGH: Is there a problem with continuing it 15 this afternoon then tomorrow if we need to go on to tomorrow? 16 COMMISSIONER SHARPLESS: No, I have just given you 17 the option. I will -- 18 HEARING OFFICER VALKOSKY: There is no problem. 19 MS. HOUGH: It seems like it was presented as an 20 either/or. 21 COMMISSIONER SHARPLESS: No, I am going to sign the 22 notice, we'll paste it on the door. 23 MS. HOUGH: Okay. 24 COMMISSIONER SHARPLESS: If you guys don't need it 25 we'll just put a Cancel across it. This is just a Capitol Electronic Reporting (916) 967-6811 114 1 contingency plan for you all and allow you whatever time you 2 need. 3 I guess the next issue then, Stan, would be, once 4 the parties talk about the schedule and fill in the blanks 5 and talk about the reality of when things can be done and 6 what needs to be done this would come back to the Committee 7 for the Committee to consider. The Committee might want to 8 do its own input into this proposal. Once we see your 9 reality we'll look at our reality. We will come out with a 10 Committee Order on the schedule; is that right? 11 HEARING OFFICER VALKOSKY: That's correct. 12 COMMISSIONER SHARPLESS: That would be within two 13 weeks or so? 14 HEARING OFFICER VALKOSKY: I think it will be 15 quicker than that if we get timely response from the parties. 16 And I would suggest, is there any difficulty in setting a 17 report-back date on Tuesday the 26th? Is that too short of a 18 time frame? 19 MR. JOSEPH: I would inquire as to what form you 20 want the report-back in. There is a possibility we will all 21 agree on the schedule but there is a possibility we won't. 22 HEARING OFFICER VALKOSKY: I don't anticipate that 23 you will all agree on every element of the schedule. If you 24 agree, fine, fine. What I am interested in is each party's 25 reaction to the list of items and that is really it. To the Capitol Electronic Reporting (916) 967-6811 115 1 extent that they agree, again, that's fine. To the extent 2 there is elements that you want to add or subtract, that's 3 fine too. What I want is your response to the document that 4 I handed you. 5 COMMISSIONER SHARPLESS: Although I would encourage 6 that they try to work on agreement. 7 HEARING OFFICER VALKOSKY: I definitely encourage, 8 yes. Definitely encourage agreement, but again, it is not a 9 condition of it. So really, that's it. Can you get back to 10 the Committee by Tuesday, the 26th is that? 11 MR. WOLFINGER: We can as the applicant. 12 HEARING OFFICER VALKOSKY: Mr. Buell? 13 MR. BUELL: I have some questions I would like to 14 ask the Committee about guidance on what criteria they are 15 looking for in the schedule. I see no reason why we can't 16 meet that date. 17 HEARING OFFICER VALKOSKY: Okay, what are your 18 questions? 19 MR. BUELL: Are you directing the parties to come 20 up with a schedule that has a decision by December 2nd of 21 this year? 22 HEARING OFFICER VALKOSKY: No. Not necessarily, 23 let me put it that way. 24 MR. BUELL: How strongly does the Committee feel 25 about the issuance of a complete PSA? Capitol Electronic Reporting (916) 967-6811 116 1 HEARING OFFICER VALKOSKY: That's one of the items 2 I think that is subject to discussion among the parties. 3 MR. BUELL: Okay. How much time does the Committee 4 want to prepare a Presiding Member's Report? 5 HEARING OFFICER VALKOSKY: If you'll notice it 6 says, in a contested case, such as we anticipate this to be 7 with multiple adjudicated issues, 60 days would be typical. 8 That's guidance. 9 MR. BUELL: Okay, thank you. 10 HEARING OFFICER VALKOSKY: Obviously, if it's 55 11 days that is negotiable, if it's 20 days you are out of the 12 ballpark. Okay? 13 MR. BUELL: Okay. 14 COMMISSIONER SHARPLESS: And if you're expecting us 15 to write it on Christmas, forget it, it ain't going to 16 happen. 17 MR. BUELL: And the schedule that you want only 18 goes through the FSA? 19 HEARING OFFICER VALKOSKY: No, no, I want it 20 through the balance of the proceeding. I mentioned FSA 21 because at the present time the Committee would desire to 22 issue a Scheduling Order that could go through the issuance 23 of the FSA. Again, that's subject to change, I want to 24 emphasize that. But that would be the next major document. 25 Anything else? Mr. Joseph. Capitol Electronic Reporting (916) 967-6811 117 1 MR. JOSEPH: Noting that Monday is Memorial Day, 2 Tuesday would be fine so long as you accept a fax filing. 3 Because otherwise it means sending it out by Friday. 4 HEARING OFFICER VALKOSKY: Fax filing is fine. 5 MR. JOSEPH: Thank you. 6 HEARING OFFICER VALKOSKY: That would be followed 7 up with a hard copy to the Docket -- 8 MR. JOSEPH: Correct. 9 HEARING OFFICER VALKOSKY: Yes, that's no problem. 10 COMMISSIONER SHARPLESS: Any other questions? 11 Okay. Commissioner Laurie, for the good of the company shall 12 we adjourn? 13 COMMISSIONER LAURIE: Good idea. 14 COMMISSIONER SHARPLESS: Any other issues that we 15 need to cover? We talked about schedule continuation. Okay. 16 Well, we will adjourn the Committee Conference and you may 17 carry on. I thank you again. 18 MR. THOMPSON: Thank you. 19 (Thereupon the meeting was 20 concluded at 2:11 p.m.) 21 --oOo-- 22 * * * * * * * * * * 23 * * * * * * * * * * 24 * * * * * * * * * * 25 Capitol Electronic Reporting (916) 967-6811 118 CERTIFICATE OF TRANSCRIPT I, Ramona Cota, as the Official Transcriber, hereby certify that the attached proceedings before Chief Hearing Officer Valkosky, California Energy Commission, In the Matter of: ) Docket No. 97-AFC-1 ) Application for Certification ) for the High Desert Power Project ) ) were held as herein appears and that this is the original transcript thereof and that the statements that appear in this transcript were transcribed by me to the best of my ability. I further certify that this transcript is a true, complete, and accurate record of the proceeding. Ramona Cota May 30, 1998 Capitol Electronic Reporting (916) 967-6811 Capitol Electronic Reporting (916) 967-6811