MEMORANDUM. March 9, 2007

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1 MEMORANDUM March 9, 2007 TO: FROM: SUBJECT: MEMBERS, PORT COMMISSION Hon. Anne Lazarus, President Hon. Kimberly Brandon, Vice President Hon. Rodney Fong Hon. Michael Hardeman Monique Moyer Executive Director Approval of CEQA Findings for Trans Bay Cable, LLC ( TBC ) to install an electricity transmission line in San Francisco Bay and 23 rd Street. DIRECTOR'S RECOMMENDATION: APPROVE CEQA FINDINGS BACKGROUND Trans Bay Cable LLC ( TBC ) proposes to install a 400 MW high voltage direct current transmission line ( Project ) beneath the Bay, between the cities of Pittsburg and San Francisco. Port staff made informational presentations to the Port Commission on December 12, 2006 and February 27, 2007 regarding the Project. The Project sponsor is a wholly-owned subsidiary of Babcock & Brown LP, a San Franciscobased company, in cooperation with Pittsburg Power Company, a municipal utility. The primary goal of the Project is to transmit electrical power from the East Bay, which has excess electricity-generation capacity, and to reduce transmission grid congestion to the distribution facilities in San Francisco. The California Independent System Operator (CAISO), a not-for-profit public-benefit corporation charged with operating the majority of California s high-voltage wholesale power grid and planning to ensure reliable electric service, approved the Project as the preferred longterm transmission alternative to address the identified electric reliability concerns in San Francisco and northern San Mateo County beginning in CAISO subsequently conducted additional analysis, which found that San Francisco may face a reliability problem as early as 2010, and now supports an earlier date of operation for the Project. This Print Covers Calendar Item No. 9B

DIRECTOR'S RECOMMENDATION: APPROVE CEQA FINDINGS BACKGROUND Trans Bay Cable LLC ( TBC ) proposes to install a 400 MW high voltage direct current transmission line ( Project ) beneath the Bay, between

2 Port Commission Page 2 The Project consists of the following major components: Approximately 53 miles of 10-inch diameter high voltage direct current ( DC ) cable buried in Bay sediment between PG&E's Pittsburg Substation and its San Francisco Potrero Substation, including 9.4 miles of submerged lands and a small portion of shoreline under Port jurisdiction (see Exhibit A). A DC cable route from the edge of the San Francisco Bay immediately south and east of 23 rd Street to a San Francisco converter station site. Construction of converter stations in Pittsburg and San Francisco, which are utilized to convert DC transmitted by the cable to alternating current ( AC ). In San Francisco, pursuant to the Project Final Environmental Impact Report ( FEIR ), the mitigated location for this proposed 5-acre converter station is the Harrigan Weidenmuller Company ( HWC ) site, which is private property located on Illinois Street between 23 rd and 24 th streets. An AC cable route connecting the San Francisco converter station site and the existing local PG&E Potrero Substation. APPROVAL OF CEQA FINDINGS (Resolution 07-22) The City of Pittsburg ( Pittsburg ), which is the lead agency for the Project under the California Environmental Quality Act ( CEQA ), published a Draft EIR in May During the public comment period, Pittsburg received numerous written and verbal comments from various entities, including more than 80 comments from the City of San Francisco (including the Port, PUC, City Attorney s Office, and Planning Department). The Final EIR (FEIR), which included comments and responses, was issued on October 16, 2006 and certified by Pittsburg on November 6, After certification of the FEIR, Pittsburg issued an Addendum to describe changes in the converter station enabled by commercial availability of new technology for the converter station. The proposed changes did not trigger the requirement of supplemental or subsequent environmental review. The CEQA process was described in the February 27, 2007 informational report to the Port Commission, and in more detail in the attached Findings Affirming Operational License and Major Encroachment Permit for the Trans Bay Cable Project ( Findings ). Pursuant to the requirements of CEQA, California Public Resources Code Sections et seq., the Guidelines for Implementation of CEQA, 15 Cal. Administrative Code Section et seq., (CEQA Guidelines) and Chapter 31 of the San Francisco Administrative Code, the Port Commission must review and consider the information contained in the FEIR, and adopt CEQA findings prior to approving any uses analyzed in the FEIR. Accordingly, the Findings are attached to this staff report for Port Commission review and adoption as Attachment A. The Findings include: 1) a description of the Project, 2) discussion of the FEIR and Addendum,

A DC cable route from the edge of the San Francisco Bay immediately south and east of 23 rd Street to a San Francisco converter station site.

3 Port Commission Page 3 3) the disposition of each of the mitigation measures pertinent to the San Francisco components of the Project that are proposed in the FEIR and Addendum, and 4) the FEIR/Addendum alternatives and the reasons for the Port Commission s rejection of those alternatives. The Findings include two supporting exhibits: Exhibit 1 provides the text of each mitigation measure identified by the EIR, including those found to mitigate, reduce, or avoid significant environmental effects and to be adopted by the Port as a condition of its approval of Licenses to TBC, and those that fall within the joint jurisdiction of the Port Commission and other City agencies (i.e. Department of Building Inspection, Department of Parking and Traffic). Exhibit 2 consists of a Mitigation Monitoring and Reporting Program (MMRP), which would be adopted by the Commission as required by Section of the Public Resources Code. The purpose of the MMRP is to determine the stage at which each of the adopted mitigation measures must be imposed to ensure that the measure is carried out. TBC and the Port will implement the majority of the mitigation measures. TBC will implement most of the measures as a condition of the applicable license, with the Port enforcing the license conditions, either alone or in conjunction with other City agencies. TBC will hire a third party to monitor and provide independent reporting to the Port regarding implementation of the mitigation measures in San Francisco. Prepared by: Brad Benson, Special Projects Manager and Carol Bach, Environmental & Regulatory Affairs Manager, Planning & Development

The Findings include two supporting exhibits: Exhibit 1 provides the text of each mitigation measure identified by the EIR, including those found to mitigate, reduce, or avoid significant

4 PORT COMMISSION CITY AND COUNTY OF SAN FRANCISCO RESOLUTION NO ADOPTING FINDINGS UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT RELATED TO THE APPROVAL OF LICENSES WITH TRANS BAY CABLE COMPANY FOR THE INSTALLATION, CONSTRUCTION, AND OPERATION OF ELECTRICITY TRANSMISSION FACILITIES IN SAN FRANCISCO BAY AND BENEATH 23 RD STREET. The Final Environmental Impact Report ( FEIR ) for the Proposed Trans Bay Cable Project (City of Pittsburg Case No. SCH ) was certified on November 6, 2006; and the Project analyzed in the FEIR includes installation and operation of an approximately 53-mile high voltage direct current electricity transmission cable in San Francisco Bay, of which 9.4 miles are submerged lands within the Port s jurisdiction and approximately 301 linear feet are land running beneath 23 rd Street and also under Port jurisdiction; and construction of a converter station on privately-owned property (the HWC site) on Illinois Streets, between 23 rd and 24 th Streets; and the City of Pittsburg subsequently published an Addendum to the FEIR on December 26, 2006, which determined that changes in the project to incorporate new converter station technology would not result in any new significant environmental effects, change any of the findings of the FEIR, or trigger additional environmental review; and the FEIR and Addendum determined that with implementation of the proposed mitigation measures the proposed project would not result in any significant environmental impacts, and The Port proposes to enter into license agreements with and issue a Major Encroachment Permit to TBC with respect to the Project; and TBC has agreed to develop and implement a Mitigation Measures Monitoring Program, which shall become a material exhibit to the Licenses, and Pursuant to the requirements of the California Environmental Quality Act, California Public Resources Code Sections et seq., (CEQA), the Guidelines for Implementation of CEQA, 15 Cal. Administrative Code Sections et seq., (CEQA Guidelines) and Chapter 31 of the San Francisco Administrative Code, the Port Commission must review and consider the information contained in the FEIR and Addendum, and adopt findings prior to approving the Trans Bay Cable Licenses for the uses described above; and

ELECTRICITY TRANSMISSION FACILITIES IN SAN FRANCISCO BAY AND BENEATH 23 RD STREET. The Final Environmental Impact Report ( FEIR ) for the Proposed Trans Bay Cable Project (City of Pittsburg Case No.

5 Resolution No Page 2 Project Environmental Impact Report files have been made available for review by the Port Commission and the public, and these files are part of the record before the Port Commission; and the Port Commission has reviewed and considered the information contained in the FEIR and Addendum; now, therefore, be it RESOLVED, That the Port Commission hereby adopts CEQA findings, and a Mitigation Monitoring and Reporting Program, as required by Section of the Public Resources Code, and as attached to this Resolution as Attachment A ( Findings Affirming Operational License and Major Encroachment Permit for the Trans Bay Cable Project ; Exhibit 1: FEIR Mitigation Measures Required as Conditions of the Trans Bay Cable License; and Exhibit 2: Trans Bay Cable Lease Mitigation Measures Monitoring Program), including findings with respect to the environmental mitigation measures identified in the FEIR, the project alternatives, the analysis of potentially significant environmental effects of the Project, and the conclusion that, with implementation of the proposed mitigation measures, the proposed project would not result in any significant environmental impacts. I hereby certify that the foregoing resolution was adopted by the Port Commission at its meeting of March 13, Secretary

and the Port Commission has reviewed and considered the information contained in the FEIR and Addendum; now, therefore, be it RESOLVED, That the Port Commission hereby adopts CEQA findings, and a

MEMORANDUM. January 5, 2005

MEMORANDUM. January 5, 2005 MEMORANDUM January 5, 2005 TO: FROM: SUBJECT: MEMBERS, PORT COMMISSION Hon. Wilfred Hsu, President Hon. Michael Hardeman, Vice President Hon. Sue Bierman, Commissioner Hon. Kimberly Brandon, Commissioner