Discussion
Section 851 provides that no public utility shall sell, lease, mortgage, or otherwise encumber the whole or any part of property necessary or useful in the performance of its duties to the public, without first having obtained Commission approval.3 The purpose of Section 851 review by the Commission is to ensure that the proposed transaction is not adverse to the public interest. The public interest is served when utility property is used for other productive purposes without interfering with the utility's operations or affecting service to utility customers.4
However, under some circumstances, pursuant to Section 853(b), the Commission may exempt certain transactions, or certain classes of transactions, from the requirements of Section 851 when advance Commission review and approval of the transaction(s) is not necessary to serve the public interest.5
Here, since PacifiCorp owns only a 10 percent interest in the properties, and the properties are not necessary for PacifiCorp to continue to provide utility service to the public, the sales will not adversely impact either PacifiCorp's ratebase or its ability to serve the public. Therefore, we do not believe that review of these transactions pursuant to Section 851 is needed in order to protect the public interest. Further, requiring PacifiCorp to file a large number of advice letters pursuant to Resolution ALJ-244 (as extended by Resolution ALJ-272) or formal Section 851 applications for individual sales of property as these transactions arise would cause PacifiCorp and its ratepayers unnecessary expense and would consume valuable Commission time and resources.
As a result, we exempt the sale of properties in the Colstrip Township, in which PacifiCorp holds a 10 percent interest, from the requirements of Section 851 pursuant to Section 853(b). Based on the unique circumstances of this case, this exemption shall apply both to future sales of properties in the Colstrip properties and to the past sales of properties in the Colstrip Township in which PacifiCorp holds an ownership interest. The Commission generally does not grant exemptions under Section 853(b) for transactions that have already occurred without Commission approval. However, here, since PacifiCorp did not control the sales of these properties, and generally did not know about the sales until after the transactions had already closed, it is reasonable to excuse PacifiCorp's failure to obtain Section 851 approval of the past sales and to exempt the past sales from the requirements of Section 851 pursuant to Section 853(b).
This decision shall not be a precedent in any future cases in which utilities apply for exemption from the requirements of Section 851 pursuant to Section 853(b) after a transfer of utility property has already occurred. PacifiCorp and other utilities are cautioned to apply for Commission authorization pursuant to Section 851 or for an exemption pursuant to Section 853(b) before transferring interests in utility property that are necessary or useful in providing service to the public. Violations of Section 851 may result in the imposition of sanctions pursuant to Sections 2107 and 2108.
3 Section 851 states in pertinent part:
A public utility, other than a common carrier by railroad subject to Part A of the Interstate Commerce Act &_butType=4&_butStat=0&_butNum=2&_butInline=1&_butinfo=49 USC 10101&_fmtstr=FULL&docnum=1&_startdoc=1&wchp=dGLzVzB-zSkAA&_md5=9aa677f5b359154cf1e19f8e4682f574" target="_top">(49 U.S.C. Sec. 10101 et seq.), shall not sell, lease, assign, mortgage, or otherwise dispose of, or encumber the whole or any part of its ... property necessary or useful in the performance of its duties to the public ...without first having either secured an order from the commission authorizing it to do so for qualified transactions valued above five million dollars ($5,000,000), or for qualified transactions valued at five million dollars ($5,000,000) or less, filed an advice letter and obtained approval from the commission authorizing it to do so ...
4 D.00-07-010 at 6.
5 Section 853 states in pertinent part:
(b) The commission may from time to time by order or rule, and subject to those terms and conditions as may be prescribed therein, exempt any public utility or class of public utility from this article if it finds that the application thereof with respect to the public utility or class of public utility is not necessary in the public interest. The commission may establish rules or impose requirements deemed necessary to protect the interest of the customers or subscribers of the public utility or class of public utility exempted under this subdivision. These rules or requirements may include, but are not limited to, notification of a proposed sale or transfer of assets or stock and provision for refunds or credits to customers or subscribers.
