2. Background

PG&E and the County request Commission authorization under § 851 for PG&E to grant the County a permanent easement over PG&E's property to construct, use, and maintain a 65-foot section of 36-diameter corrugated metal pipe, a concrete headwall, a rock-lined drainage ditch, and a wooden walkway. The section of corrugated metal pipe on PG&E's property will be used to divert surface and storm water collected upstream of PG&E's property, first through the pipeline, then through a concrete headwall into the rock-lined ditch. The rock-lined ditch, which is approximately 12 feet wide and 5 feet deep, will direct the water into Lake Almanor. As part of the project, the County will install a wooden pedestrian walkway with a handrail to serve as a bridge across the rock-lined ditch, in order to protect the safety of the public.

The existing storm drain is inadequate to serve the County's increasing development in the area and therefore must be replaced with the requested drainage improvements. The existing storm drain system channels storm water from Big Cove Road and Peninsula Drive down a natural swale on Eleanor Drive to Lake Almanor. Eleanor Drive is unpaved and unimproved.

As a result of successive development projects in the area, the surface run-off now exceeds the capacity of the existing storm drain. The increased amount of water feeding into the system, along with the limited capacity of the existing drainage system downstream of the storm water inlets, causes water to overflow out of the inlets upstream at the base of the wall of a commercial building on Ponderosa Drive and then flow across Peninsula Drive and down Eleanor Drive, causing increased erosion.

The Eleanor Drive property was recently sold to a private owner, who wishes to build a residence on the property.

The County has been working with developers in the area, including developers upstream of the Eleanor Drive property, to develop a storm drain improvement plan. Under the County's plan, storm water from new developments will be contained in those developments, and surface water and storm water already in the drainage system will be diverted through the proposed 36-inch diameter corrugated pipe that will cross PG&E property, in order to allow adequate drainage.

According to the application, the PG&E property that would be encumbered by the proposed easement is part of the Watershed Lands covered by the Land Conservation Commitment (LCC) established as part of the settlement agreement between PG&E, PG&E Corporation, and the Commission in Investigation (I.) 02-04-026. The LCC has been clarified and supplemented by a stipulation dated September 25, 2003. Pursuant to the settlement agreement, PG&E created the Stewardship Council (SC), a California non-profit corporation, to oversee and carry out the LCC.

The application states that under the LCC, the Watershed Lands, including the PG&E property that would be subject to the proposed easement here, must be either: (1) subject to permanent conservation easements restricting development of the land to protect and preserve their beneficial public values, or (2) donated in fee simple to one or more public agencies or qualified non-profit conservation organizations that will ensure the protection of those beneficial values. SC is scheduled to complete a Land Conservation Plan (LCP) to implement these actions and other aspects of the LCC by April 12, 2007. However, in the meantime, the Governing Board of SC has discretion to recommend that PG&E undertake isolated transactions before the adoption of the LCP. SC has developed a policy regarding third party uses of lands subject to its jurisdiction.

Pursuant to this policy, SC has reviewed the County's request for approval of the proposed easement and has found that the proposed easement would be consistent with the long-term objectives of the settlement agreement, stipulation, and LCP. On July 13, 2005, SC issued a letter, which acknowledged its review of the County's request and advised that the County's proposed drainage improvement project is not likely to substantially diminish any beneficial public values of the land and will not impede SC's ability to complete the LCP. Therefore, SC has no objection to the request of PG&E and the County for Commission approval of the proposed easement.

PG&E has filed a proposed easement agreement (the agreement) with the County to be executed if the Commission approves this application. In the agreement, PG&E grants a non-exclusive easement to the County to excavate, install, construct, reconstruct, repair, maintain, and use, for storm water drainage only, approximately 65 feet of a single corrugated metal pipeline, not exceeding 36 inches in diameter, a concrete headwall, a rock-lined ditch for open-channel drainage of water, and a wooden walkway, with a handrail, to be used for crossing over the open ditch. The easement also grants the County the right of ingress and egress to and from the drainage facilities on the property. The County may not assign the easement, except with the prior written consent of PG&E.

The County has agreed to submit detailed plans and specifications for the drainage facilities it plans to construct on the property to PG&E for approval before commencing construction. The County will also obtain all necessary permits and comply with all legal requirements related to construction of the drainage facilities. The County may not construct any additional facilities on the property without the prior written consent of PG&E.

PG&E has reserved the right to use the easement area for its own purposes or when use of the area is necessary or desirable in order to serve PG&E's patrons, consumers, or the public. PG&E may also restrict use of the easement area as necessary in the event of an emergency, if emergency repairs or maintenance to PG&E's facilities are necessary, or under other circumstances when PG&E finds it appropriate to do so.

The County has acknowledged that the property is part of Federal Energy Regulatory Commission (FERC) Project No. 2105, and has agreed not to interfere with the overall recreational use of the project area pursuant to FERC requirements. Under the agreement, the County also must coordinate its activities in order to reasonably minimize interference with PG&E's use of the property and may not use the easement area in a way that endangers human health and safety, PG&E facilities, or the environment. The County's use of the easement area must be compatible with Commission General Orders and decisions, and other legal requirements, including those related to hazardous substances and environmental protection. The County must maintain the easement area in good condition and is responsible for the security of its facilities on the easement area.

In addition, with certain exceptions,2 the County has agreed to indemnify and defend PG&E from any claims for liability for personal injury (including death) or property damage in the easement area or for violation of any legal requirement, which arise from the County's occupancy or use of the easement areas, including construction, or from the exercise of the County's rights and duties under the agreement or the County's failure to perform its duties. This indemnification includes claims arising from or connected with the release or discharge of any hazardous substances as a result of the County's use or occupancy of the easement area or the surrounding property. The County has agreed to accept all risks related to its use of the easement area. In order to further protect PG&E from liability, the County must provide insurance during the term of the agreement.3

The County will pay a one-time fee of $200.00 for the easement.

2 The County's indemnification of PG&E does not include any claims arising from PG&E's sole negligence or willful misconduct.

3 This insurance must include commercial general liability insurance, which names PG&E as an additional insured, in the amount of $1 million per occurrence and $2 million in the aggregate, with additional coverage for defense costs; business auto insurance; and workers compensation and employer's liability insurance. If the County is permitted to self-insure for any of the required insurance and a covered event occurs, the County is liable to PG&E for the full amount of insurance coverage that would have been available if the County had obtained insurance from a third party insurer in compliance with the agreement.

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