STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

April 3, 2001

TO: PARTIES OF RECORD IN APPLICATION 00-06-005

This is the draft decision of Administrative Law Judge (ALJ) Duda. It will be on the Commission's agenda at the next regular meeting 30 days after the above date. The Commission may act then, or it may postpone action until later.

When the Commission acts on the draft decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.

Parties to the proceeding may file comments on the draft decision as provided in Article 19, attached, of the Commission's "Rules of Practice and Procedure." Pursuant to Rule 77.3 opening comments shall not exceed 15 pages. Finally, comments must be served separately on the ALJ and the assigned Commissioner, and for that purpose I suggest hand delivery, overnight mail, or other expeditious method of service.

/s/ LYNN T. CAREW

Lynn T. Carew, Chief

Administrative Law Judge

LTC:sid

Attachments

ALJ/DOT/sid DRAFT CA-11

5/3/2001

Decision DRAFT DECISION OF ALJ DUDA (Mailed 4/3/2001)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of Southern California Edison Company for Authority to Lease Available Land at the Malibu Substation to The Moshe Silagi Family Trust.

Application 00-06-005 (Filed June 2, 2000; Petition for Modification filed January 29, 2001)

OPINION MODIFYING DECISION 01-01-039

Background

Southern California Edison Company (SCE) has filed a Petition for Modification of Decision (D.) 01-01-039 regarding authority to lease available land to the Moshe Silagi Family Trust (Silagi Trust or "Lessee") for a parking lot and office facilities. SCE requests the Commission modify the second sentence of Ordering Paragraph 3 of that order which currently states that "Should environmental claims be made on SCE subsequent to the sale, SCE shall not seek recovery of any cost of the claims or defense of the claims from its ratepayers."

In its Petition for Modification, SCE claims that the language in the decision is overly broad since the property in question will continue to be utility operating property. SCE claims that ratepayers should continue to have certain financial responsibilities for the operation and maintenance of utility facilities on the property. SCE does not agree with the language in the order that precludes it from seeking recovery of costs of environmental claims associated with utility operations that have occurred or may occur in the future on the property subject to the lease. SCE believes that the language should be revised to allow it to seek recovery from ratepayers of environmental claims arising out of utility operations on the property. Regarding environmental claims associated with Lessee's tenancy or activities under the lease, SCE agrees with language in the order that restricts SCE from seeking recovery of these costs from ratepayers. Therefore, SCE proposes that Ordering Paragraph 3 of the order be modified to read:

"Approval of this lease is conditioned upon compliance by lessee with all applicable environmental regulations. Should environmental claims, in whole or in part, related to the tenancy of the lessee be made on SCE subsequent to the execution of the lease, SCE shall not seek recovery of any cost related to the tenancy of the lessee, or share costs related to the tenancy of the lessee, of the claims or defense of the claims from ratepayers."

SCE maintains that unless D.01-01-039 is modified, it will not go forward with the lease. Furthermore, SCE claims that if the language remains unaltered and is used in other similar orders, it will chill SCE's incentive to pursue such transactions because they will be perceived as too risky. The net result will mean less opportunity for ratepayers to share in revenues from such transactions.