3. Discussion

Section 851 provides that no public utility "shall . . . encumber the whole or any part of . . . property necessary or useful in the performance of its duties to the public, . . . without first having secured from the Commission an order authorizing it to do so." Since the easements proposed to be conveyed to the County would be encumbrances on PG&E property, we apply Section 851 in considering this application.¹²

The primary question for the Commission in § 851 proceedings is whether the proposed transaction is adverse to the public interest. In reviewing a § 851 application, the Commission may "take such action, as a condition to the transfer, as the public interest may require."¹³ The public interest is served when utility property is used for other productive purposes without interfering with the utility's operation or affecting service to utility customers.¹⁴

While this application requests § 851 approval to grant Alpine County 1) an easement for road alignment, maintenance and use, and 2) a license for a temporary construction area (for a parking lot and sign) on PG&E land, it is unclear from the underlying transactional documents (Exhibits to the Application) whether PG&E has entered both a license agreement under General Order (GO) 69-C for construction of the parking lot as well as a lease agreement for the remainder of the project activities. It is settled that utilities must not use limited use licenses to bifurcate their transactions in order to perform construction activities under a GO 69-C agreement not subject to Commission review, and then following construction, seek approval of these lease arrangements for project activities including that construction. (See, D.00-12-006.) We will not allow such circumvention of legally required environmental review, nor any "piecemealing" of the CEQA process. (San Joaquin Raptor/Wildlife Rescue Center v. County of Stanislaus (1994) 27 Cal. App. 4^th 713; CEQA Guidelines Section 15165). However in this case the entire project, including the parking lot, did receive environmental review and approval under NEPA. Thus no additional environmental review would be required if any of the transactions presented in this application were actually a GO 69-C license arrangement subject to review under § 851. Given these facts, the requested approvals would not circumvent CEQA.

We find that PG&E's conveyance of the proposed easements to the County would serve the public interest. The proposed easements will not interfere with PG&E's use of the property or with service to PG&E customers, and will be utilized in a manner consistent with FERC and Commission requirements. PG&E's conveyance of the road easement to the County would also serve the public interest by enabling the County and the FHA to make improvements to the Blue Lakes Road which are necessary to address safety hazards and traffic problems. Conveyance of the temporary construction easement will also promote the public interest by enabling the County to pave a small parking lot and install a sign which will be part of a informational station on PG&E property, that will provide information regarding recreational opportunities, such as campgrounds and trails, on the land.

We also approve of the proposed ratemaking treatment for the compensation that PCWA will pay to PG&E for the easements. Since this land is part of PG&E's hydroelectric generation facilities, it is consistent with previously established guidelines that the revenue be credited to the Other Operating Revenue sub-account of the TCBA.