V. Comments on Draft Decision
The draft decision of the ALJ in this matter was mailed to the parties in accordance with Pub. Util. Code § 311(g)(1) and Rule 77.7 of the Rules of Practice and Procedure. Comments were filed on , and reply comments were filed on .
1. PPS does not need the excess fiber capacity it seeks to lease to third parties.
2. It is generally appropriate from an environmental and economic standpoint to have parties share utility infrastructure where feasible.
3. PPS owns two crude oil pipelines in California. The first pipeline, the Pacific System, extends 120 miles from Kern County in Southern California to the Los Angeles basin. This Commission approved the Pacific System tariff and the certification of EIS/SEIR on April 10, 1996.
4. In addition to carrying oil, the Pacific System pipeline contains fiber optic cable that is used for communications purposes. PPS seeks to grant access to this fiber to third parties, including Qwest, for use in the construction of fiber optic telecommunications networks in California.
5. PPS' application was not complete until April 28, 2000, when its counsel submitted an executed copy of the USFS Project Stipulations.
6. PPS did not disclose in its initial application that the proposed project would require the installation of approximately 60 additional pullboxes; it made this disclosure on February 7, 2000 in response to an ALJ ruling.
7. PPS did not reveal that Qwest would be the primary user of the new fiber optic lines until March 7, 2000 when it furnished a copy of a report it had provided to the USFS in September 1999 describing the project. That report revealed that the Pacific Pipeline fiber optic cable ultimately would form part of Qwest's 18,815-mile, 150-city nationwide network platform.
8. The Commission's Energy Division had issued a "stop work" order to Qwest prohibiting it from further work in California on its fiber optic network because of alleged CEQA violations. The Commission initiated an investigation into these alleged violations on March 2, 2000.
9. PPS did not disclose that any of the work would occur on private land adjacent to the Angeles National Forest until March 7, 2000.
10. The USFS issued PPS a permit to perform the proposed activity on April 7, 2000. It conditioned the permit on a series of Project Stipulations focused on mitigating the environmental impact of the proposed work.
11. PPS, through its counsel, disclosed to the assigned ALJ for the first time in July 2000 that all of the construction discussed herein had been completed without Commission review.
12. This Commission conducted an environmental review of the Pacific System pipeline in 1996.
13. PPS performed construction of the Project without CEQA review in April and May 2000. The greatest number of days construction could have occurred was 53; from April 8, 2000, the day after the USFS issued a permit for the work, until May 31, 2000.
14. The Commission did not grant PPS permission to proceed without CEQA review; PPS made a unilateral decision that such review was not required.
15. PPS' work did not cause environmental harm, and was overseen by USFS personnel.
16. PPS gained a benefit from proceeding with construction without waiting for Commission approval.
17. PPS promptly disclosed that it had completed the Project without CEQA review.
18. PPS failed prominently to disclose the necessary construction in its initial application, or the involvement of Qwest, which had been the subject of its own environment-related stop work order, in the Project. These factors were material to the merits of the application and should have been disclosed.
19. PPS apparently believed CEQA review of its Project was unnecessary.
20. This application did not seek approval solely of a paper transaction; there was construction incident to the application. PPS conceded this point in responding to the ALJ's ruling seeking information on construction related to the transaction.
21. CEQA benefits the public at large by ensuring proper environmental view prior to projects with potential impacts on surrounding areas.
1. Based on the PPS' lack of need for the leased fiber capacity, the Commission's interest in avoiding redundant infrastructure where feasible, and the lack of ratepayer impact, the leases are in the public interest, and should be granted pursuant to Pub. Util. Code § 851.
2. The work applicant proposes is a "project" not exempt from CEQA review.
3. Even if a project will occur entirely on federal land, it is not exempt from CEQA review. This Commission's jurisdiction over such projects stems from its regulatory authority over the applicant, not the land.
4. Under the unique circumstances present here, we need not conduct a duplicative environmental review of the project.
5. PPS should have sought environmental review by this Commission of the project.
6. The USFS Project Stipulations in Appendix A adequately protect the environment, and should be incorporated herein as conditions. We rely on the USFS conditions under the special circumstances presented in this case, and our decision here shall not be precedential in subsequent cases.
7. The conditions in the Qwest Fiber Optic Project Cultural Resources Protocols (Appendix B) bind Qwest and its agents, and should be binding on the work approved here to the extent it is performed for Qwest's fiber optic network.
8. PPS should be authorized pursuant to Pub. Util. Code § 851 to grant third-party access to fiber optic cable located in PPS' crude oil pipelines. All such access shall be subject to the conditions we impose in this decision.
9. We affirm the assigned ALJ's January 26, 2000 ruling granting PPS' Motion for Limited Protective Order seeking confidential treatment of the Indivisible Right to Use Agreement, as amended, between PPS and PPS Holding and attached as Exhibit G to the Application.
10. PPS violated Commission Rule 17.1 and Pub. Util. Code § 702 by constructing the Project without Commission approval.
11. PPS violated Commission Rule 1. PPS' failure to notify us the work would occur in part off federal land, and its representation to the contrary; its failure to explain at the outset that the application would involve construction; and its failure to inform the ALJ until July 2000 that the work was already complete all justify this finding.
12. PPS committed 30 separate violations.
13. PPS should be fined $5,000 for each violation, for a total fine of $150,000.
14. It is in the public interest to impose a fine on PPS.
IT IS ORDERED that:
1. Pacific Pipeline System LLC (PPS) is authorized pursuant to Pub. Util. Code § 851 to grant third-party access to fiber optic cable located in PPS' crude oil pipelines to the extent set forth in the Application.
2. PPS' construction activities necessary to the foregoing third party access is approved retroactively, subject to the conditions set forth herein.
3. PPS and all third parties installing fiber optic cable in PPS' pipelines shall be bound by the conditions set forth in the United States Forest Service Project Stipulations contained in Appendix A hereto. This decision shall not be precedential.
4. The conditions in the Qwest Fiber Optic Project Cultural Resources Protocols (Appendix B) bind Qwest Communications International, Inc. (Qwest) and its agents and affiliates, and shall be binding on the work approved here to the extent it is performed for Qwest's fiber optic network.
5. The ruling of the assigned Administrative Law Judge (ALJ) granting PPS' motion for protective order is affirmed.
6. PPS shall notify the Director of the Energy Division, in writing, of any substantial amendments to, extension of, or terminations of the agreements attached as Exhibits A-G to the Application within 30 days following the execution of such amendments, extensions or terminations.
7. PPS shall be assessed a penalty of $150,000 payable to the General Fund of the State of California within 30 days of the effective date of this order.
8. Upon making such payment, PPS shall file an advice letter with the Commission's Energy Division attaching a cancelled check or other proof of satisfaction of the penalty obligation we impose in this decision.
9. This proceeding is closed.
This order is effective today.
Dated , at San Francisco, California.
(See Formal Files for Appendixes.)
