Section 851 Criteria

Section 851 provides that no public utility shall sell "the whole or any part of its . . . line, plant, system, or other property necessary or useful in the performance of its duties to the public, . . . " without securing our permission. We have generally required a public utility to demonstrate that a proposed transfer would not be adverse to the public interest.¹⁰ In reviewing a Section 851 application, the Commission may "take such action, as a condition to the transfer, as the public interest may require."¹¹ 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.¹² We have continually asserted our Section 851 jurisdiction over transmission facilities (such as the property here) that are subject to FERC's jurisdiction-even when FERC's approval under Section 203 of the Federal Power Act must also be secured.¹³

The applicants recite specific benefits to the public interest as the result of the proposed conveyance. By reserving an easement for transmission purposes, PG&E can continue and maintain the existing transmission line and make future modifications or improvements as necessary. If the conveyance is approved, the property can be removed from the transmission rate base; and PG&E will avoid ongoing tax payments, maintenance expenses, and potential liability for accidents on the property. We are convinced that the proposed conveyance will result in a more efficient utilization of utility assets and is not injurious to public rights.

The sales price of $40,000 is based on the appraisal of J. Kaeuper & Company, commercial real estate appraisers and consultants located in San Francisco.¹⁴ The appraisal, performed in August 2000, was based on a sales comparison methodology. The appraisal concluded that the market value, given uncertainties related to the lot-line adjustment and "remnant parcel status," was $40,000. The sales price has not been contested in this proceeding, and we believe it is reasonable consideration for property appurtenant to a major transmission line and over which easements are reserved.