By Michael Brooks

FERC on Wednesday denied San Diego Gas & Electric’s request for rehearing of an order that limited the amount the utility can be reimbursed if its South Orange County Reliability Enhancement (SOCRE)  transmission upgrade project is canceled (EL15-103).

SDG&E is seeking approval from the California Public Utilities Commission to construct the $400-million project, which involves rebuilding two substations in the cities of San Juan Capistrano and San Clemente and replacing the current single-circuit 138-kV transmission line with a double-circuit 230-kV line.

The project, which was included in CAISO’s 2010-2011 Transmission Plan to address reliability in southern Orange County, has been mired in the PUC’s review process. The utility filed for approval in May 2012; the PUC issued it final environmental impact report in April.

In September 2015, SD&E asked FERC for an abandonment incentive under Order 679, which allows recovery of 100% of all “prudently incurred” costs if the project is canceled for reasons beyond the company’s control.

On March 2, FERC granted the utility’s request, but only for those costs incurred after the date of the order. For the more than $31 million SDG&E spent prior to then, FERC ruled the utility could only recover 50%.

SDG&E protested, saying the order went against commission precedent. FERC summarily dismissed this claim.

“It is commission policy that a public utility may only recover up to 50% of prudently incurred abandonment costs for costs that are incurred before the date of the order granting the incentives,” FERC said. “While SDG&E refers to this precedent as ‘outlier cases,’ they are in fact the only cases that speak in some way to the issue of retroactive application of an abandonment incentive under Order No. 679.”

FERC’s order came a day before the California PUC delayed a final decision on the project until its Dec. 15 meeting.