4. Position of PG&E

PG&E's witnesses testified that when they were asked to relocate the utility's facilities at Bishop Tract, they first determined that the District did not have a franchise agreement with PG&E. Franchise agreements are contracts entered into between PG&E and a city or county granting the utility the right to install facilities on roads within the limits of the city or county jurisdiction. In exchange for this, PG&E agrees to relocate the lines without charge should the city or county deem such relocation necessary for road widening or other improvement projects.

Steven W. Huff, the utility's Stockton manager for distribution construction, testified that when he determined that the District did not have a franchise agreement with PG&E, he turned to the utility's tariffs and tariff application guide. He advised the District that the work would be done pursuant to Tariff Rule 16G2, which provides that relocation for the convenience of the applicant is performed by PG&E at the expense of the applicant.

Huff testified that he confirmed his decision with PG&E's land department and legal department. He said that his decision also was influenced by his knowledge that the A.G. Spanos Construction Company was represented on the District's Board of Trustees and was planning to develop a residential housing project on the property once it was removed from the 100-year flood plain. Huff said that he reviewed an Environmental Impact Report confirming plans for the housing project.

Bruce Hardy, a senior land rights agent for PG&E, testified that company records show that the utility proposed plans for a power line along the western boundary of Bishop Tract in 1914, and that construction had taken place by 1918. He said that PG&E through the 1950s extended its lines to serve Bishop Tract customers, placing its service poles next to the levees and outside owners' fields to minimize interference with the agricultural uses of the land. Hardy testified that PG&E was granted easement grants from underlying property owners for extension of its lines and equipment in 1933, 1947 and in the early 1950s.

Richard L. Volpe, a geotechnical engineer and a consultant to PG&E, testified that the District could have improved its levees under a state matching fund program for about $60,000, and that this would have reduced the threat of flooding for use of the land for agriculture. Instead, he said, the District chose to spend $7 million to meet FEMA requirements to remove the land from the flood plain and make it available, under city and county planning department standards, for housing and commercial development.

Based on its testimony and exhibits, PG&E takes the position that:

· The $7 million expansion of the Bishop Tract levees was done primarily to benefit a few landowners by making their property available for housing and commercial development in the future, and those owners should bear the cost of relocating PG&E facilities.

· PG&E's Tariff Rule 16G2 requires the District to bear the cost of line relocation in the absence of a franchise agreement and where the work is performed for the convenience of the District.

· The District does not have superior property rights under which it can require PG&E to relocate facilities at PG&E's expense.