5. Jurisdiction and Relevant Precedent
Sections 851-854 require that a public utility "shall not sell, lease, ... any part of its ... system ... without first having ... secured an order from the commission authorizing it to do so for qualified transactions valued above five million dollars."31
In particular Section 854 (a) states:
(a) No person or corporation, whether or not organized under the laws of this state, shall merge, acquire, or control either directly or indirectly any public utility organized and doing business in this state without first securing authorization to do so from the commission.32
In administering these sections of the Pub. Util. Code, the Commission seeks "to ensure that a proposed transfer is not adverse to the public interest."33
At times, the Commission has sought to determine whether a transaction serves the public interest. D.07-05-031 reports:
The primary standard used by the Commission to determine if a transaction should be authorized under § 854(a) is whether the transaction will adversely affect the public interest. The Commission may also consider if the transaction will serve the public interest.34
Logically, if a transaction serves the public interest, it is also not adverse to the public interest.
In addition, the Commission has established that
Where a company that does not possess a Certificate of Public Convenience and Necessity (CPCN) desires to acquire control of a company or companies that do possess a CPCN, the Commission will apply the same requirements to the acquiring company as would be applied to an initial applicant seeking a CPCN. The Commission has established two major criteria for determining whether a CPCN should be granted, or transferred. An applicant who desires to operate as a provider of facilities-based local exchange and interexchange services must demonstrate that it has a minimum of $100,000 in cash or cash equivalent for operations of the company plus the costs of deposits to be paid to other carriers. In addition, the applicant is required to make a reasonable showing of technical expertise in telecommunications or a related business.35
Furthermore, since authorizing a change of control is an exercise of discretionary approval by the Commission, Public Resource Code Section 21080 requires that the Commission consider the environmental consequences of approval.
In addition, the terms of the settlement require review by the Commission. For a settlement, the Commission's Rules of Practice and Procedure set a standard for review:
12.1 (d) The Commission will not approve settlements, whether contested or uncontested, unless the settlement is reasonable in light of the whole record, consistent with law, and in the public interest.
In addition, in a general rate case for San Diego Gas & Electric Company, the Commission amended the standard to adopt a policy on "all party" settlements.36 As a "precondition" to approval of all party settlements, the Commission must be satisfied that:
a. the settlement commands the unanimous sponsorship of all active parties to the proceeding;
b. the sponsoring parties are fairly representative of the affected interests;
c. no term of the settlement contravenes statutory provisions or prior Commission decisions; and
d. the settlement conveys to the Commission sufficient information to permit it to discharge its future regulatory obligations with respect to the parties and their interests.
We will therefore examine the proposed transaction, as modified by the Settlement Agreement, to determine whether it meets these requirements.
31 § 851.
32 § 854(a).
33 Decision (D.) 10-10-017 at 15.
34 D.07-05-031 at 3.
35 D.11-11-017 at 4.
36 D.92-12-019 (46 CPUC2d 538, 550-551).
