BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of Pacific Gas and Electric Company (U 39 M), a California corporation, and Northern District Pentecostal Ministries, a California corporation, for an Order Authorizing the Former to Sell and Convey to the Latter a Certain Parcel of Land in Yuba County Pursuant to Public Utilities Code Section 851. |
Application 99-11-019 (Filed November 16, 1999) |
ADMINISTRATIVE LAW JUDGE'S RULING
REQUIRING APPLICANT TO PROVIDE
ADDITIONAL INFORMATION
This Ruling directs Pacific Gas and Electric Company (PG&E) to provide additional information in support of its application to sell to Northern District Pentecostal Ministries (Ministries) approximately 8.9 acres of improved land in Yuba County (Property) for $105,000. The information should address the issue raised by the Commission's Office of Ratepayer Advocates (ORA) in its Response to the Application (Response). Ministries will use the Property as a church retreat. The Property surrounds a PG&E substation and is traversed by several PG&E distribution and transmission lines. In addition, PG&E discloses in the contract for sale of the Property (Contract) that
Seller [PG&E], at some time during ownership or use of the Property, may have handled, treated, stored and/or disposed of Hazardous Substances1 on the Property. Some of these Hazardous Substances may contain chemicals known to the State of California to cause cancer or reproductive toxicity.
In its Response, ORA seeks to have the Commission impose a condition on the sale to protect PG&E from liability for environmental claims. ORA recommends that Ministries execute and deliver to PG&E a Release and Indemnity Agreement at the close of escrow.2
The Application contains a proposed, unexecuted Release and Indemnity Agreement.3 However, I have concerns about the adequacy of that document to protect PG&E from environmental claims by the church group purchasing the Property. The Release and Indemnity Agreement starts out with broad indemnity language, but is qualified by the following provision:
4.2 Nothing contained in Section 4.1 above [the general indemnity provision] shall require Buyer [Ministries] to indemnify, protect, defend or hold a Released Party [including PG&E] harmless, from or against any claims which are brought by independent third parties (which, for purposes of this Agreement, means all persons or entities other than Buyer and any future owners of the Property or any portion thereof), to the extent arising from (a) the negligence or willful misconduct of such Released Party, or (b) violations of Environmental Requirements caused by such Released Party.4
This provision appears to limit (and perhaps even eliminate) the protection afforded PG&E in other provisions of the Release and Indemnity Agreement.
In light of ORA's concerns about the effects on ratepayers of PG&E's potential environmental liability, the nature of the Property's buyer (a church group) and the buyer's proposed use of the property (church retreats), I direct PG&E fully to address the issue in a submission to this Commission.
PG&E's submission shall address the following issues:
· PG&E should explain the meaning of paragraph 4.2 of its proposed Release and Indemnity Agreement quoted above, and the impact of that paragraph on the rest of the Release and Indemnity Agreement's provisions, and
· If paragraph 4.2 leaves PG&E exposed to potential environmental liability, explain how PG&E proposes to protect its ratepayers against such liability, if at all.
PG&E shall submit the foregoing information on or before February 29, 2000.
IT IS RULED that:
1. By February 29, 2000, PG&E shall submit information addressing whether paragraph 4.2 of the proposed, unexecuted Release and Indemnity Agreement accompanying PG&E's Application is adequate to protect PG&E from environmental liability. Specifically, PG&E shall explain the meaning of paragraph 4.2 and the impact of that paragraph on the rest of the Release and Indemnity Agreement's provisions. If paragraph 4.2 leaves PG&E exposed to potential environmental liability, PG&E should explain how it proposes to protect its ratepayers against such liability, if at all.
2. This order is effective immediately.
Dated February 16, 2000, at San Francisco, California.
Sarah R. Thomas Administrative Law Judge |
CERTIFICATE OF SERVICE
I certify that I have by mail this day served a true copy of the original attached Administrative Law Judge's Ruling Requiring Applicants to Provide Additional Information on all parties of record in this proceeding or their attorneys of record.
Dated February 16, 2000, at San Francisco, California.
Erlinda A. Pulmano |
NOTICE
1 Application, Exh. A. 2 ORA Response at 3. 3 Application, Exh. A (Release and Indemnity Agreement is labeled Exhibit E, but appears within Exhibit A to the Application). 4 Id. The Release and Indemnity Agreement defines each capitalized term.Parties should notify the Process Office, Public Utilities Commission, 505 Van Ness Avenue, Room 2000, San Francisco, CA 94102, of any change of address to insure that they continue to receive documents. You must indicate the proceeding number on the service list on which your name appears.
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