Article 5. Electrical And Gas Corporations of California Public Utilities Code >> Division 1. >> Part 1. >> Chapter 5. >> Article 5.

In addition to the requirements of Article 1 (commencing with Section 1001) and any other provision of law, every electrical and every gas corporation proposing to construct or modify any electric or gas plant within the state, or line, or extension, which will in the case of an electrical plant, line, or extension add generating capacity in excess of 50 megawatts, or in the case of a gas plant, line, or extension cost in excess of fifty million dollars ($50,000,000), or proposing to construct any electric or gas plant out-of-state of which at least twenty-five percent (25%) of the costs will be borne by the corporation, shall comply with this article.

Whenever application is made to the commission for certification of an electric or gas plant, line, or extension subject to this article, the commission shall appoint a construction project board of consultants to evaluate the design, construction, project management, and economic soundness of the proposed plant, line, or extension, if the commission determines that a significant potential exists for the occurrence of problems in any of the areas for which an electrical or gas corporation is required to submit information pursuant to Section 1003 or 1003.5. The extent of the board's evaluation shall be determined by the commission. The board may, upon approval of the commission, employ staff independent of the commission staff to carry out its functions under this article. The board may, upon approval of the commission, undertake special studies addressing potential problem areas identified by the board.

(a) The construction project board of consultants shall consist of eminently qualified and highly experienced design, construction, and project management economic specialists who can, as a group or as individuals, independently and objectively address the full scope of design, construction, and project management and economic evaluations requested by the commission.
  (b) No member of the construction project board of consultants shall have a current financial interest in, or receive any significant amount of his or her annual compensation for consulting services in his or her area of special expertise from, any corporation or person which has a financial interest in the project. The commission shall define financial interest and significant amount of annual compensation for purposes of this subdivision. Any person considered for appointment to the board shall disclose to the commission any interests in the project or in any corporation or person with a financial interest in the project and any compensation received for consulting services which may constitute a prohibited financial interest.
  (c) Notwithstanding subdivision (b), a person appointed by the Federal Energy Regulatory Commission as a member of a board of consultants for the construction of a hydroelectric generation facility or related transmission line who receives compensation from an electrical corporation constructing that facility or line as a member of that board of consultants is not disqualified from an appointment to a construction project board of consultants pursuant to Section 1092.

The members of the construction project board of consultants shall receive fees and expenses from the commission. The corporation whose project the construction project board of consultants is evaluating shall, upon demand of the commission, reimburse the commission for the amount expended by the commission for the fees and other expenses of the board, including, but not limited to, special studies, staff, or commission staff costs directly attributable to activities of the construction project board of consultants. The commission shall deposit all money received pursuant to this section at least once each month in the Certification Fund, which is hereby created in the State Treasury. The money in the Certification Fund is hereby continuously appropriated to the commission in augmentation of any other appropriation for the support of the board. The commission may allow the inclusion of any amounts received from an electrical or gas corporation pursuant to this section as an authorized expense for purposes of establishing rates.

The corporation shall provide the construction project board of consultants with all information the board determines necessary for its evaluation of the project. The corporation shall provide information regarding problems and uncertainties which have been encountered during the planning, design, and development of the project.

The construction project board of consultants shall evaluate the design, construction, project management, and economic soundness of the project as directed by the commission, and submit an appropriate written report of its findings and recommendations to the commission and the corporation prior to the commission's issuance of a certificate. The members of the board may provide testimony before the commission in formal or informal hearings on the project.

(a) For purposes of assisting the construction project board of consultants in monitoring project construction, the corporation shall submit the current design, estimate of project costs, implementation schedule, and draft construction contracts to the commission and the construction project board of consultants before awarding any major construction contract. The corporation shall inform the commission and the board of all bid quotations and any significant exceptions which the bidders may have taken to the corporation's engineering designs, specifications, and draft contracts.
  (b) The examination by the commission and the construction project board of consultants of documents furnished pursuant to this section shall be conducted so as not to unreasonably delay the contracts, bidding, and awards process.

Throughout the design and construction process, the corporation shall submit quarterly progress reports to the commission and the construction project board of consultants on the status of the project. The corporation shall provide complete information on any major problems and deviations in the areas for which an electrical or gas corporation is required to submit information pursuant to Section 1003 or 1003.5. The corporation shall provide the commission and the board with reports each month containing the following information for each of the major cost categories within the project and for the project as a whole:
  (a) The original estimated costs as of the time of certification.
  (b) The actual costs to date.
  (c) The percentage of the work completed to date.
  (d) The estimated costs to completion.
  (e) The costs associated with changes made by regulatory bodies to the scope or design of the project. If the actual costs to date or the estimated costs to completion for any major cost category, or the project as a whole, exceed the original estimated costs by 10 percent, the corporation shall advise the board and the commission of this fact, and provide the commission and the board with an explanation and a proposal for corrective action. The commission shall consult with the board in determining whether to order corrective action. The board shall submit quarterly reports to the commission and to the corporation if it determines that a potential for major problems exists.

Upon completion of the project and commencement of operations, the construction project board of consultants shall submit a final report of its findings and recommendations to the commission and the corporation.

The commission and the corporation shall give full consideration to all reports, findings, and recommendations of the construction project board of consultants and provide a public response in writing within 45 days after receiving the reports, findings, and recommendations. Copies of the written reports of the board containing its findings and recommendations shall be made available to the public, at cost, at the same time that the reports are issued to the commission and the corporation. The public shall have 45 days from the date of issuance to respond, in writing, to the commission on the reports.

No provision of this article shall be construed to relieve an electrical or gas corporation of any responsibility for the construction or modification of any electric or gas plant including ultimate costs, cost control mechanisms, schedules, and completion dates. Members of the construction project board of consultants, individually or as a group, shall assume no responsibility for the design, construction, project management, or any other part of a plant construction or modification project.

(a) Notwithstanding any other provision of this article, and in addition to the requirements of Article 1 (commencing with Section 1001), an electrical corporation proposing to construct an electrical transmission line to the northwestern United States shall provide the commission with sufficient reliable information to enable the commission to determine that the proposed line, at the electric rates expected to prevail over the useful life of the line, will be cost effective. The commission, in its analysis of the forecast cost of electricity, shall take into consideration the recent increases in the charges for purchasing surplus electricity from the northwestern United States, the possibility of future increases in those charges, the feasibility of negotiating long-term contracts under reasonable charges, and the feasibility of purchasing electricity directly from Canada rather than through the Bonneville Power Administration.
  (b) The commission shall not issue a certificate of public convenience and necessity unless it is satisfied that the electrical corporation has provided the information described in subdivision (a).