6. Discussion
Section 851 provides that no public utility "shall ... sell ... or lease ... the whole or any part of ... property necessary or useful in the performance of its duties to the public, ... without first having secured from the Commission an order authorizing it to do so." The primary question for the Commission in § 851 proceedings is whether the proposed transaction is in the public interest.26 For example, pursuant to § 851, we consider whether a utility can continue to deliver adequate service at reasonable rates with only the remaining property.27 The public interest is served when utility property is used for other productive purposes without interfering with the utility's operation or affecting service to utility customers.28 In reviewing a § 851 application, the Commission may "take such action, as a condition to the transfer, as the public interest may require."29
Here, since under § 9610, PG&E may no longer serve retail electric distribution customers in the Mountain House Area effective January 1, 2001, PG&E therefore no longer needs the facilities sold to MOD. MOD's lease of certain electric distribution facilities and space on the wooden transmission poles therefore will not interfere with PG&E's ability to serve its customers. The agreements fairly compensate PG&E for the sale and lease of the facilities and for any "stranded facilities" that may result from PG&E's inability to serve customers in the Mountain House Area under § 9610. PG&E is adequately protected from any liability that may result from the agreements. In addition, our approval of this transaction will eliminate the need for MOD to construct or acquire other duplicative facilities to serve the Mountain House Area at public expense. We therefore believe that these transactions are in the public interest.30
We note that PG&E has structured the agreement with MOD for the lease of certain electric distribution facilities as a license, which will convert into a lease immediately upon our approval of this application. We generally disapprove of this type of agreement, because of the potential for the utility to enter into a license under GO 69-C in order to implement a lease transaction without undergoing environmental review or obtaining our prior approval under § 851.31 However, here, the transactions are exempt from CEQA review. Further, PG&E and MOD needed to quickly implement the agreements because of the Legislature's adoption of § 9610 and MOD's lack of the necessary distribution facilities to serve the Mountain House Area. Under these circumstances, we approve the license/lease.
For all of the foregoing reasons, we grant the application of PG&E, subject to the above conditions, effective immediately.
26 D.02-05-008, mimeo., pages 8-9. 27 D.89-07-016. 28 D.00-07-010, mimeo. at p. 6. 29 D.3320, 10 CRRC 56, 63. 30 PG&E and ORA have also stipulated that the agreements are consistent with Section 9610, ensure uninterrupted electric distribution service to the Mountain House Area, avoid the need for MOD to construct costly duplicative facilities, and will not adversely affect PG&E's service to its own electric retail customers. Stipulation, paragraph 10. 31 See D.02-07-026.
