14. Assignment of Proceeding
Michael Peevey is the Assigned Commissioner and Glen Walker is the assigned Administrative Law Judge in this proceeding.
1. Under the Lease Agreement and five product orders, Sprint will pay monthly fees to SCE for the use of available capacity in existing SCE-owned fiber optic cable rings.
2. Revenue from these lease agreements will be booked as Other Operating Revenue, with proportionate sharing between shareholders and ratepayers pursuant to D.99-09-070.
3. The proposed agreements provide that the lease agreements will have no effect on SCE's ability to serve its customers.
4. The proposed agreements make productive use of what is currently available fiber optic capacity.
1. Because the agreements here involve the use of SCE's existing infrastructure with only incidental changes, the contemplated use is exempt from CEQA review under CEQA guideline 15301(b).
2. SCE should be permitted to submit future product orders under this Lease Agreement for Commission approval through the advice letter process, subject to the conditions set forth in the Ordering Paragraphs.
3. Because there are no outstanding issues remaining before the Commission in A.03-11-027, the docket should be closed.
IT IS ORDERED that:
1. The application of Southern California Edison Company (SCE) for authority to enter into the Metropolitan Area Network Fiber Optic Lease and Maintenance Agreement (Lease Agreement) and five associated product order leases with Sprint Communications Company LP, as more fully described in the application and its exhibits, is approved.
2. SCE is authorized to seek approval of future product orders under the Lease Agreement through the Commission's advice letter procedure, subject to the following additional requirements:
a. The product order must be entered into pursuant to the Lease Agreement approved by the Commission in Application (A.) 03-11-027;
b. The product order can only involve currently available fiber, the use of which will not interfere with SCE's regulated operations;
c. The product order must be solely for "existing" dark fiber - fiber that was approved by the Commission, and constructed by SCE, prior to November 26, 2003 (the date upon which A.03-11-027 was filed); and
d. The product order cannot involve the use of "new" fiber - fiber that was not owned by SCE as of November 26, 2003, or fiber that was constructed after November 26, 2003 (regardless of whether Commission approval for the new construction was given prior to November 26, 2003). Leases for the use of "new" fiber require the filing of an application pursuant to Pub. Util. Code § 851.
3. The sharing of revenue between shareholders and ratepayers of SCE derived from the telecommunications leases entered into pursuant to the authority granted herein shall apply in accordance with the allocation rules adopted in Decision (D.) 99-09-070. The following further requirements shall apply:
a. SCE shall use the cost allocation and tracking processes set forth in D.99-09-070 and Appendix C of D.98-12-083. A minor exception to D.98-12-083 is authorized for the cost allocation methodology for the Telecommunications Control Center (TCC). Incremental TCC costs associated with the telecommunications services business, including support systems and personnel, shall be identified separately between ratepayers and shareholders. The expenses of Edison Carrier Solutions shall be recorded as expenses for non-utility functions, and thus shall be borne by shareholders. In addition, all upgrades performed for the benefit of non-utility operations, and all excess personnel not required for utility services, shall be charged as non-utility expenses.
b. SCE shall not make any change to the Commission's requirements in Appendix C of D.98-12-083 without first discussing them with Commission staff and determining that a proposed change is justified.
c. To the extent that the leased facilities become necessary for electric utility operations, SCE shall either renegotiate with Sprint regarding the use of the relevant fiber, or shall expand the existing capacity, at no cost to ratepayers, to accommodate the utility's needs to the extent that such needs would have been met if there were no non-utility use of the facilities. All of the costs associated with Sprint-related activities, including maintenance, taxes, franchises, and permits, shall be paid by Sprint consistent with the leases.
4. SCE shall implement the following notification requirements in dealing with the Lease Agreement and its product orders:
a. SCE shall notify, in writing, the Office of Ratepayer Advocates (ORA), the Commission's Energy Division (Energy), and the Commission's Telecommunications Division (Telco), through their respective assistant directors, of all substantive amendments to, extensions of, or terminations of the leases.
b. SCE shall notify, in writing, the assistant directors of ORA, Energy, and Telco of any substantive changes to plant-in-service resulting from implementation of the leases within 60 days of any such changes.
c. SCE shall notify, in writing, the assistant directors of ORA, Energy, and Telco if any ratepayer-funded right-of-way that is the subject of the leases ceases to be used and useful for the provision of electric service, or if there are any substantive changes in the right-of-way segments that are the subject of the leases, within 30 days of any such event.
d. If any affiliate of SCE enters into an agreement to make direct use of the fiber optic cables that are the subject of the leases, SCE shall notify, in writing, the assistant directors of ORA, Energy, and Telco at least 60 days prior to the commencement of such use. The required notification shall include details of the rates to be charged to SCE or the affiliate, and the accounting principles that will be used to track the costs and payments associated with such use.
5. In submitting additional product orders under the Lease Agreement, SCE shall submit the following information as part of each advice letter:
a. The Lease Agreement;
b. All previously approved product orders;
c. The proposed product order(s);
d. The total amount of strand or route miles currently being leased to Sprint;
e. The total annual revenue from all current Sprint product orders;
f. Confirmation that the lease is for existing SCE fiber (approved by the Commission and constructed by SCE prior to November 26, 2003;
g. Confirmation that gross revenues from current and proposed Sprint product orders will be shared 90%-10% with shareholders and ratepayers, respectively, as directed in D.99-09-070.
6. In submitting additional product orders under the Lease Agreement, SCE shall submit the following as part of each advice letter:
a. Table identifying current fiber capacity/strand miles for all fiber optic cable and the associated net plant-in-service ratepayer/shareholder funded dollars;
b. Table identifying current fiber capacity/strand miles, with ratepayer- and shareholder-funded facilities separately identified, used by:
i. SCE for its own electric system or electric utility usage;
ii. Edison Carrier Solutions; and
iii. Third parties.
c. Table identifying the same information as in V.B, above, for the fiber optic cable containing the dark fiber that is the subject of all existing and currently proposed Sprint product orders.
4. A.03-11-027 is closed.
This order is effective today.
Dated ___________________, at San Francisco, California.
