September 25, 1997

Mr. Bruce Kaneshiro, Project Manager
c/o Environmental Science Associates
225 Bush Street - Suite 1700
San Francisco, California 94104

Re: Comments on Mitigated Negative Declaration and Initial Study for Pacific Gas & Electric Company's Proposed Divestiture (Application No. 96-11-020)

Dear Mr. Kaneshiro:

Pacific Gas & Electric Company (PG&E) hereby submits the following brief comments on the Mitigated Negative Declaration and Initial Study prepared concerning its proposed divestiture of its Oakland, Moss Landing and Morro Bay Power Plants.

[Begin PG&E-1]
1. p. 5 - Cultural Resources. Section 4.14.b.1

The second paragraph of the mitigation has inadvertently dropped a few words from the mitigation measure accepted by PG&E. The first few sentences of that paragraph should read as follows:

A qualified archaeologist shall be consulted prior to implementing construction or soil remediation activities that will involve earth moving or soil excavation, and the archeologist shall be available for consultation or evaluation of any cultural resources uncovered by such activities. For any previously undisturbed, known archeological areas, a qualified archeologist shall monitor earth moving and soil excavation activities . . .

Corresponding changes should be made when the mitigation measure is described in the body of the report.
[End PG&E-1]

[Begin PG&E-2]
2. p. 2.2 - Project Characteristics

As reflected in the Addendum to the Application, tank farms and marine terminal facilities are all being offered for sale with the plants. PG&E is training only switchyards and transmission related equipment and property.
[End PG&E-2]

[Begin PG&E-3]
The proposal for entering into "bidding contracts" with the buyers if the sales are not able to close before PX operations begin has been deleted from the PG&E's application, as reflected in the Addendum to the Application filed February 25, 1997.
[End PG&E-3]

4. p. 3.2 - Amount and Timing of Construction, Refurbishment, Repowering . . . etc.

[Begin PG&E-4]
The last few sentences in the paragraph cold be misunderstood by some readers to suggest that increases of up to 49 MW cold be made at a plant site without any permits or environmental reviews. Although such expansions may be exempt from CEC approval, other permit and environmental reviews, such as construction permits or new source review by the air agencies would still apply.
[End PG&E-4]

3. p. 4.4.9 - Combined Issues

[Begin PG&E-5]
PG&E has now completed Phase II testing that further addresses the potential contamination issues identified in the Phase I reports and otherwise characterizes the nature and extent of soil and groundwater contamination at each of the plant sites. Upon testing, many of the potential issues identified in the Phase I reports were found not to exist, or not to require any additional investigation or remediation. Based on the Phase II work and a health based risk assessment, PG&E has concluded that non of the environmental conditions found at the sites currently requires remediation to protect human health and safety. Remediation of some conditions is required, however, to meet various regulatory standards. PG&E is working with responsible environmental agencies to develop appropriate strategies for addressing such conditions.

Corresponding changes should be made in sections on the individual plants that refer to the Phase I results.
[End PG&E-5]

[Begin PG&E-6]
4. p. 4.4.5 - Air Basin Attainment Designations

Table 4.5.2 should indicate that the Bay Area Basin is currently designated as in attainment with federal ozone standards. Footnote /a/ to Table 4.5.2 should reflect only that the EPA has proposed a redesignation of the Bay Area Basin to "moderate" nonattainment.
[End PG&E-6]

PG&E appreciates the opportunity to comments on the proposed Mitigated Negative Declaration and Initial Study, and urges the Commission to adopt a Final Mitigated Negative Declaration as soon as possible.


M. Chistie Mcmanus
Project Manager
Application No. 96-11-020