Analysis and Action

We grant PG&E's request under Section 851 to quitclaim the Phase One easement. We deny the balance of the Application. We further condition our approval of the quitclaim of the Phase One easement on PG&E affirmatively representing that ratepayers will not be charged for the cost of undergrounding the new distribution facilities.

The basic task of the Commission in a Section 851 proceeding is to determine whether the transaction serves the public interest: "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." (D.02-01-058.) We have reviewed the proposed transaction and find it does not interfere with PG&E's operation or affect its ability to provide service to its customers. The existing 115 kV line is idle. As the property is developed, new customers will receive service from the distribution lines installed in place of the existing transmission lines. An existing customer will receive service from that portion of the existing line that remains in place after quitclaiming the easement to Pacific Union and/or Rodden. While ratepayers will receive no direct monetary benefit from abandonment of the easement, development of the property in accordance with an environmentally sound plan is a productive purpose. Accordingly, the quitclaim of the existing 115 kV transmission line easement is in the public interest and should be approved.

The Phase Two and Three easement presents a different problem. As outlined in the application, PG&E has not yet been granted the easement that it intends, at an indeterminate future date, to quitclaim. Because of the long-term nature of the Bridle Ridge project, PG&E might not be granted that easement for ten or fifteen years, at which time the character of the project, the needs of the utility, and the nature of the environmental issues may all have changed. Furthermore, Section 851 requires approval for transfers of utility-owned property. Because PG&E does not yet own even so much as an equitable interest in the property that it intends some day to quitclaim, we do not see that the statute authorizes us to approve the transaction. Accordingly, we deny that part of the application that seeks approval for the transfer of the easement to be acquired in connection with the development of Phases Two and Three. When PG&E has acquired the subject easement, it may reapply to the Commission for authorization to abandon it.