6. Advice Letter vs. § 851 Applications

A utility is prohibited from entering into transactions like those here "without first having secured from the commission an order authorizing it to do so." (Pub. Util. Code § 851.) However, § 853(b) allows the Commission to exempt a utility from § 851 requirements if it finds that the provision "is not necessary in the public interest."² The Commission also has authority to establish rules relating to the exempted activities that "may include, but not be limited to, notification of proposed sale or transfer of assets...." (Pub. Util. Code § 853(b).) In the case of SCE's application, therefore, the Commission has authority to issue a § 851 order approving the Lease Agreement and the five product orders, and then, under § 853(b), subject certain future product orders to other rules, such as notification, if it is in the public interest.

The Commission's advice letter process is a more informal process codified in General Order (GO) 96-A. Advice letters generally are submitted to the Commission with tariff sheets that modify a utility's tariff schedule, and are noticed in the Commission's Daily Calendar. Interested parties have 20 days from the filing of an advice letter to file a protest, and the Commission may suspend the changes proposed in the advice letter. Absent Commission action suspending the advice letter, the changes proposed by the utility are deemed approved and become effective not less than 30 days after filing.³

As applied to the future product orders proposed by SCE, the advice letter process would provide notice to both the Commission and to interested parties of new product order leases entered into by SCE and Sprint, and would allow for the filing of protests and suspension by the Commission. Absent such action, however, the Commission's rules would allow the new leases to become effective without a Commission order, thus significantly decreasing the time necessary for obtaining Commission approval under a § 851 application.