XIII. Assignment of Proceeding
Michael R. Peevey is the Assigned Commissioner and Jeffrey P. O'Donnell is the assigned Administrative Law Judge in this proceeding.
1. On March 22, 1999, PG&E and WilTel entered into an agreement that would (1) allow WilTel to install underground and overhead fiber optic facilities on PG&E's electric transmission towers, substations and rights-of-way, and in PG&E's gas transmission rights-of-way; (2) vest bare legal title in the fiber optic facilities in PG&E subject to WilTel's right to use the optical fibers to service its customers; and (3) allow PG&E to use a portion of the fibers in connection with its needs. PG&E would maintain ownership of its overhead facilities subject to WilTel's right to use them. WilTel would maintain ownership of any underground fiber optic facilities installed pursuant to the agreement, subject to PG&E's right to use them.
2. Until the Commission's approval is secured, PG&E has given WilTel a revocable license to enter its facilities to install fiber optic systems.
3. The revocable license will convert to an irrevocable lease, which contains the same terms, except as provided in the agreement, upon the Commission's approval of this application.
4. The project consists of two routes-one from Ukiah to Cortina and one from Fresno to San Luis Obispo. The total number of miles is 210, which includes 3,745 feet of trenching, 148 miles of aerial installation along the Fresno to San Luis Obispo route, and 62 miles of aerial installation along the Ukiah to Cortina route. In addition, two regeneration stations were included on the Fresno to San Luis Obispo route.
5. The project was substantially completed in 1999, with minor construction and cleanup continued until March 1, 2000, before PG&E filed this application.
6. PG&E granted WilTel a revocable license to use its property and install facilities prior to seeking approval of the agreement.
7. GO 69-C provides three key criteria for an exception to the § 851 requirement for prior approval of, among other things, licenses of utility property for limited uses:
(1) The interest granted must not interfere with the utility's operations, practices, and service to its customers;
(2) The interest granted must be revocable either upon the order of the Commission or upon the utility's determination that revocation is desirable or necessary to serve its patrons or consumers; and
(3) The interest granted must be for a "limited" use of utility property.
8. In D.00-12-006, the Commission determined that "GO 69-C's provisions regarding `limited use' of utility facilities do not extend to the use of facilities that are to be constructed without the benefit of CEQA review." The Commission also stated: "We do not believe that undertaking a commitment with long term implications is a `limited use' that qualifies for GO 69-C treatment." In addition, the Commission stated that it would "deny applications to convert GO 69-C agreements to lease agreements in the future, where the structure of those transactions was designed to circumvent the advance approval requirements of Section 851, and the associated CEQA review requirement."
9. The 3,745 feet of trenching, and the two regeneration stations are significant and permanent structures that exceed the scope of the limited uses permitted by GO 69-C.
10. D.00-12-006 was adopted after the project was completed, and this application was filed.
11. CEQA applies to discretionary projects to be carried out or approved by public agencies.
12. CEQA Guidelines § 15301(b) and § 15061(b)(3) and Commission Rule 17.1(h)(1)(A)(2), provide a CEQA exemption for minor alterations of existing facilities involving negligible or no expansion beyond the previously existing facility use.
13. There is no evidence that the project was reviewed by another agency or in another forum.
14. CEQA reviews potential environmental impacts relative to a baseline established before the project is constructed in order to allow public input, and to mitigate any potentially significant environmental impacts.
15. Since construction of the project was completed before the application was filed, no baseline was established.
16. Any environmental impacts due to construction of the project have already occurred, and the opportunity for public comment at this point would be meaningless.
17. Removal of the installed facilities could impact the environment.
18. The project results in joint use of utility facilities.
19. Since WilTel is a competitor in the telecommunications market, the facilities that are the subject of this application contribute to the development of competition.
20. The annual fee PG&E receives from WilTel represents fair market value for use of its facilities.
21. Pursuant to the agreement, PG&E receives dark fiber and, for much of the route, the fiber optic facilities will function as static wire.
22. The annual fee, and the costs avoided by PG&E to install static wire are comparable to prices negotiated between other providers of rights-of-way and telecommunications companies.
23. Revenues from a license or lease of FERC jurisdictional property are subject to FERC accounting and ratemaking.
24. The second paragraph of § 851 provides that "any disposition of property by a public utility shall be conclusively presumed to be of property which is not useful or necessary in the performance of its duties to the public as to any...lessee...dealing with such property in good faith for value..." The Commission has interpreted this provision as protecting innocent lessees from having their transactions invalidated solely because the utility leased the property without advance approval under § 851. However, this does not invalidate the primary requirement of § 851 for advance Commission approval.
25. The revocable license PG&E granted to WilTel is a form of lease.
26. PG&E should be able to enforce its rights under the revocable license.
27. It would be inconsistent with § 851, and poor public policy to relieve a licensee of its obligations under a revocable license because it would prevent PG&E from using its rights and powers under the revocable license to stop a licensee from using PG&E's property in a manner harmful to PG&E's performance of its duties to the public.
28. There were no protests to this application.
29. Hearings are not required.
30. Public disclosure of the unredacted agreement filed under seal would place PG&E and WilTel at an unfair business disadvantage.
1. The purpose of § 851 is to enable the Commission to review a proposed transaction before it takes place in order to take such action as the public interest may require.
2. Since the trenching and regeneration stations could not be easily removed, the revocable license under GO 69-C is essentially irrevocable for practical purposes.
3. PG&E violated § 851.
4. Since D.00-12-006 was adopted after the project was completed, and this application was filed, it may not have been clear to PG&E at the time that a § 851 application was needed; therefore, a fine should not be imposed for violating § 851.
5. Since the project includes over three thousand feet of trenching, and the construction of two regeneration stations, including access roads, concrete pads, and several buildings at each site, it involved alterations of existing facilities that were not minor, and that involved physical expansion beyond the previously existing facility use that was not negligible.
6. A CEQA review was required, but was not conducted.
7. PG&E violated CEQA.
8. A CEQA review at this time would serve no useful purpose.
9. The Commission should not require removal of the facilities installed as part of the project.
10. Since it may not have been clear to PG&E at the time this project began that a § 851 application was needed and since CEQA would be triggered by the application itself, a fine should not be imposed for violating CEQA.
11. Approval of this application serves the public interest because it facilitates WilTel customer service, avoids installation of duplicate infrastructure, and promotes telecommunications competition.
12. PG&E's application should be approved.
13. Lease revenues related to PG&E's gas transmission system facilities should be treated consistent with the Gas Accord.
14. In future § 851 applications involving the use of its transmission facilities, PG&E should be required to confirm that the safety and reliability of its system will not be adversely affected, and address any impact on future expansion of transmission capacity.
15. In future § 851 applications, PG&E should be required to include a detailed description of any proposed construction with the application, and to make related engineering studies available upon request, subject to confidential treatment if appropriate.
16. PG&E's motion to file the unredacted agreement under seal should be granted.
17. Since the Commission approval of this application should be prospective only, PG&E should be at risk for any adverse consequences that may result.
18. By approving this application prospectively, the Commission should not relieve WilTel of its obligations under the revocable license.
19. Since there were no protests to this application, this order should be effective immediately.
IT IS ORDERED that:
1. Pacific Gas and Electric Company (PG&E) is authorized prospectively under Pub. Util. Code § 851 (§ 851) to enter into an irrevocable lease, pursuant to the Optical Fiber Installation and Indefeasible Right to Use Agreement (agreement) between it and WilTel Communications, LLC (WilTel), that would permit the installation and use of fiber optic facilities on PG&E's transmission towers, substations, rights-of-way, and other facilities.
2. The authority granted herein is limited to those previously completed facilities specifically identified in the application, and subsequent supplements filed in this proceeding.
3. The prospective authorization granted herein does not relieve WilTel of its responsibilities under its revocable license from PG&E.
4. In future § 851 applications involving the use of its transmission facilities, PG&E shall confirm that the safety and reliability of its system will not be adversely affected, and address any impact on future expansion of transmission capacity.
5. In future § 851 applications, a detailed description of any proposed construction shall be included with the application, and related engineering studies shall be made available upon request, subject to confidential treatment if appropriate.
6. PG&E's motion to have the unredacted agreement filed with the application kept under seal is granted for two years from the effective date of this decision. During that period, it shall not be made accessible or disclosed to anyone other than the Commission staff except on the further order or ruling of the Commission, the Assigned Commissioner, the assigned Administrative Law Judge (ALJ), or the ALJ then designated as Law and Motion Judge.
7. If PG&E believes that further protection of the unredacted agreement kept under seal is needed, it may file a motion stating the justification for further withholding of the unredacted agreement from public inspection, or for such other relief as the Commission's rules may then provide. This motion shall be filed no later than one month before the expiration date.
8. This proceeding is closed.
This order is effective today.
Dated , at San Francisco, California.
