3. Discussion

This application is subject to § 851 which states, in relevant part, as follows:

No public utility ... shall ... lease ... any part of its ... property necessary or useful in the performance of its duties to the public ... without first having ... secured an order from the commission authorizing it to do so.

The Commission has broad discretion under § 851 to approve or reject a proposed transaction. The primary standard used by the Commission is whether the transaction is in the public interest. The public interest is served when utility property is used for other productive purposes without interfering with utility operations or service to utility customers.⁵ When necessary, the Commission may attach conditions to a transaction to protect and promote the public interest.⁶

We find that SCE's proposed lease with Centra is in the public interest. The use of the Site as a retail center, office complex, etc., is a productive secondary use of the Site that is compatible with its primary use as a right-of-way for transmission lines. Ratepayers will benefit from the OOR generated over the life of the lease. The terms of the lease ensure that Centra will not interfere with SCE's use of the Site or with service to SCE's customers. The Agreement also requires Centra to use the Site in a manner that is safe and in compliance with legal and regulatory requirements.

We will grant the application. We approve the proposed ratemaking treatment for the rent that SCE will receive under the lease. The treatment of the rent as "passive" OOR for purposes of allocation between shareholders and ratepayers is consistent with Commission policy.

⁵ D.00-07-010 at p. 6.

⁶ See, e.g., D.04-08-048, at pp. 12-13.