III. The Master Agreement

On January 14, 2000, PG&E and AT&T Wireless entered into a Master Agreement that initially gives AT&T Wireless a revocable license, consistent with General Order (GO) 69-C, to install its antenna and related equipment on PG&E's facilities and real property. AT&T Wireless and PG&E are currently proceeding with installation of communication antennas and related equipment under the license. On December 13, 2000, PG&E and AT&T Wireless filed Application (A.) 00-12-017 with the Commission seeking approval of the Master Agreement and conversion of the license to a lease. AT&T Wireless prefers conversion of this license to a long-term lease to assure that the arrangements will not terminate prematurely. Therefore, the Master Agreement is structured to convert from a revocable license to an irrevocable lease if Commission approval is granted.

The Master Agreement covers the lease of PG&E's transmission towers which support extra-high voltage electric lines throughout PG&E's service territory, communication towers which support PG&E's intra-company communication systems, buildings including offices, warehouses, and storage areas, and other PG&E property including substations, rights of way, and bare land. Under the Agreement, AT&T Wireless may use only a portion of the property at the sites.

On January 7, 2002, Applicants filed an Amendment to the Master Agreement initially filed in this application. The amendment reflects certain adjustments to the terms of the Master Agreement such as a site reservation provision, a definition of the term "commencement date," and provisions describing the process for AT&T Wireless to acquire land rights from the underlying fee owner.

AT&T Wireless intends to use the antennas and related equipment it will attach to PG&E facilities and property for the transmission or reception of communication signals for its wireless communications system. The Master Agreement and its appendices contain terms of general applicability regarding pricing, site application procedures, safety requirements, indemnification and insurance. AT&T Wireless will pay PG&E a processing and installation fee for each site proposed under the agreement as well as an annual fee for the license of each site. Under the Master Agreement, AT&T Wireless will identify those locations where it wishes to install equipment. Then, PG&E will review the request to determine if the equipment can be attached safely and without detriment to or interference with PG&E's utility operations.

PG&E states that the agreement is beneficial for AT&T Wireless, PG&E and their respective customers. Applicants contend that AT&T Wireless obtains additional communication capacity on a cost-effective basis and in return, PG&E obtains rental fees for the use of its property which it will share with its ratepayers. PG&E states that the annual fee it negotiated under the Master Agreement represents fair market value for the use of its facilities and other property and is comparable to prices negotiated in other similar agreements. The Master Agreement provides that AT&T Wireless will bear all cost of installing its communication antennas and related equipment.

On January 18, 2001, ORA filed a protest to this application requesting additional detail on equipment installed under this Master Agreement. ORA also urges the Commission to reject PG&E's proposed ratemaking for revenues received under the Master Agreement. We will discuss ORA's protest in more detail below.