II. Background

In D.03-05-077, the Commission permitted PG&E to grant MFNS an irrevocable license to use fiber optic cable crossing the San Francisco Bay on existing PG&E electric transmission towers parallel to the San Mateo Bridge. PG&E claimed that the San Mateo Bridge line was subject to a categorical exemption from CEQA on the ground it was a "minor alteration of existing facilities." The cable is to be used by both MFNS and PG&E for communications purposes. PG&E's use of its transmission towers to provide electricity to its customers is not affected in any way by the addition of the wire.

D.03-05-077 noted that CEQA Guideline Section 15301 and Commission Rule 17.1(h)(1)(A)(2) provide for a CEQA exemption for such alterations. However, D.03-05-077 stated that this exemption only applied to an electric utility for minor alterations to and for the purpose of its own electric service. D.03-05-077 found that the modification of electric facilities to install new telecommunications lines was an expansion of the existing use of the facilities enabling telecommunications modernization. Thus, D.03-05-077 concluded that the exemption did not apply. D.03-05-077 concluded on balance, however, that there had been adequate consideration of the installation by the San Francisco Bay Conservation and Development Commission (BCDC), and noted that PG&E had consulted several other resource agencies. D.03-05-077 therefore granted PG&E's request.

PG&E claims the determination in D.03-05-077 - that the exemption does not apply when an electric utility adds telecommunications facilities to its lines - was in error. PG&E argues that we should focus on the physical nature of the work proposed, rather than the purpose to which the installation will be used: "The physical changes that occur when fiber is added to overhead utility structures are identical, whether the fiber is devoted to utility purposes or other purposes."² In particular, PG&E argues that the installation of fiber optic cable on PG&E's transmission towers is a minor alteration of existing facilities and is categorically exempt from CEQA review under section 15301 of the Guidelines for the Implementation of the California Environmental Quality Act, Cal. Code Regs, tit. 14, §§ 15000 et seq. ("Guidelines"). Rule 17.1(h) of the Commission's Rules of Practice and Procedure, which incorporates CEQA's categorical exemptions as they apply to utilities, also lists the "minor alteration of existing facilities used to convey or distribute electric power."

PG&E also asserts that the Commission erred factually in concluding that the new fiber optic cable was not intended for the purpose of PG&E's own electric service and not related to existing use of the facilities. PG&E states that, "The MFNS Agreement allows PG&E to use a portion of the new fiber to reinforce its existing telecommunications system, thereby providing improved support to its existing electrical transmission system."³ PG&E explains that, "the installation at issue will upgrade PG&E's internal communications system and permit intracompany communications over areas not currently served with optical fiber capabilities."⁴

Finally, PG&E challenges the way in which D.03-05-077 distinguishes prior Commission precedent. The Commission found in D.03-05-077 that certain old cases were not precedential because later cases had acknowledged that the Commission's view toward CEQA had evolved over time.

We discuss each of these issues in turn below.