ALJ/KJB/tcg Mailed 5/28/2003

Decision 03-05-063 May 22, 2003

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Pacific Gas and Electric Company (U 39 M) for Authorization under Public Utilities Code Section 851 (1) to Quitclaim an Existing Easement for an Idle 115 KV Transmission Line in Advance of Phase One of Pacific Union Ventures' Residential Development Plan and (2) to Quitclaim a Distribution Easement in Advance of Phase Two and Phase Three of Pacific Union Ventures' Residential Development Plan.

Application 03-03-020 (Filed March 13, 2003)

DECISION GRANTING IN PART AND DENYING IN PART
APPROVAL UNDER PUBLIC UTILITIES CODE
SECTION 851 FOR QUITCLAIM OF EASEMENTS

We grant the Application¹ of Pacific Gas & Electric Company (PG&E) for approval of a quitclaim of an existing easement to Pacific Union Ventures under Public Utilities Code Section 851.² We deny the Application to the extent that it seeks approval for quitclaim of an easement not yet granted to PG&E. For the sake of clarity, we discuss each easement separately, although they both relate to the same real estate development.

Background

Pacific Union Ventures ("Pacific Union") is a real estate developer that has received approval from the City of Oakdale ("City") to construct, over a fifteen to twenty-year period, a project ("Bridle Ridge") consisting of approximately 1500 single-family homes, 325 multi-family units, five neighborhood parks, a school, a fire station, and a commercial district. Construction of Bridle Ridge will be in accordance with the terms and conditions of the Bridle Ridge Specific Plan ("Plan"), an amendment to the general plan of the City. Bridle Ridge will be developed on 530 acres of land presently owned by V. A. Rodden, Inc. ("Rodden"), which has entered into a contract to sell the property to Pacific Union.

It is contemplated that Bridle Ridge will be developed in three phases. Phase One, a subdivision of approximately 123.6 acres into 492 single-family residential units, is slated to begin construction in the near future. Pacific Union has not completed plans for Phases Two and Three.

PG&E owns an idle 115 kV transmission line in a private easement that extends across the lands that Pacific Union has slated for development in Phases One, Two and Three. In order to facilitate the development of these lands, Pacific Union has requested that PG&E quitclaim this transmission easement and relocate the overhead facilities in stages that correspond to the timing of Pacific Union's three phases of development.

The Phase One Easement

With regard to Phase One, PG&E seeks approval to quitclaim the existing transmission easement containing the idle 115 kV line and rephase existing transmission facilities to distribution level facilities. Specifically, PG&E will remove its existing overhead transmission line within the Phase One project area and relocate the new distribution line to underground, in a public utility easement to be dedicated by Pacific Union in the Phase One project area. Rodden has requested that PG&E relocate these facilities in the Phase One project area as soon as possible. A relatively small segment of PG&E's existing overhead facilities within the Phase One project area will remain in place. This segment of the line, consisting of five utility poles, will be converted to distribution level facilities and rearranged to serve an existing PG&E customer located outside Pacific Union's project immediately south of the Phase One project area. Rodden will grant PG&E a private easement for these five utility poles on the south end of the Phase One project area.

The Phase Two and Three Easements

PG&E's existing overhead facilities located within the Phase Two and Phase Three project areas will remain in place until such time as Pacific Union has decided to proceed with its development project on these lands. Rodden will grant PG&E a new easement to accommodate these existing facilities. As Pacific Union develops the Phase Two and Phase Three project areas, PG&E's existing overhead facilities will be removed and relocated underground to public utility easements to be dedicated by Pacific Union. Upon relocation of PG&E's facilities within the Phase Two and Phase Three project areas, PG&E will quitclaim the private easement granted by Rodden for such facilities.

The ORA Protest

On April 11, 2003, the Office of Ratepayer Advocates ("ORA") filed a protest pursuant to Rule 44 of the Commission's Rules of Practice and Procedure. ORA did not object to the quitclaim of the easements but to the possibility that ratepayers might be asked to bear the cost of undergrounding the new distribution facilities to be built in Phases One, Two and Three.

The PG&E Reply

On April 21, 2003, PG&E filed its reply to the protest. In the reply, PG&E acknowledged that "as required by Electric Tariff Rule 20(b), ratepayers will not be responsible for the cost of undergrounding the facilities in this transaction. PG&E will charge Pacific Union the relocation costs under Electric Tariff Rule 20(b)."

The Application

On March 13, 2003, PG&E filed its application, seeking authorization from the Commission to grant the Phase One, Two and Three easements. PG&E's application is made under Section 851, which requires Commission approval before a utility can sell, lease, assign, mortgage, or otherwise dispose of or encumber the whole or any part of its property that is necessary or useful in the performance of its duties to the public. ³ Quitclaiming an easement is a disposition of property and therefore requires approval under Section 851.⁴

No public utility other than a common carrier by railroad subject to Part I of the Interstate Commerce Act (Title 49, U.S.C.) shall sell, lease, assign, mortgage, or otherwise dispose of or encumber the whole or any part of its railroad, street railroad, line, plant, system, or other property necessary or useful in the performance of its duties to the public, or any franchise or permit or any right thereunder, nor by any means whatsoever, directly or indirectly, merge or consolidate its railroad, street railroad, line, plant, system, or other property, or franchises or permits or any part thereof, with any other public utility, without first having secured from the commission an order authorizing it so to do. Every such sale, lease, assignment, mortgage, disposition, encumbrance, merger, or consolidation made other than in accordance with the order of the commission authorizing it is void. The permission and approval of the commission to the exercise of a franchise or permit under Article 1 (commencing with Section 1001) of Chapter 5 of this part, or the sale, lease, assignment, mortgage, or other disposition or encumbrance of a franchise or permit under this article shall not revive or validate any lapsed or invalid franchise or permit, or enlarge or add to the powers or privileges contained in the grant of any franchise or permit, or waive any forfeiture. Nothing in this section shall prevent the sale, lease, encumbrance or other disposition by any public utility of property which is not necessary or useful in the performance of its duties to the public, and any disposition of property by a public utility shall be conclusively presumed to be of property which is not useful or necessary in the performance of its duties to the public, as to any purchaser, lessee or encumbrancer dealing with such property in good faith for value; provided, however, that nothing in this section shall apply to the interchange of equipment in the regular course of transportation between connecting common carriers.