8. Conclusions

Based on our analysis, we conclude that we should grant PG&E's request that 255 of the 256 transactions at issue be approved as meeting the requirements of Section 851. As discussed herein, the remaining transaction does not require our approval. First, the leases and licenses are not adverse to the public interest and in most cases clearly benefit the public. Second, the leases and licenses do not impair PG&E's ability to serve its customers and in most cases are revocable if the public interest so requires. As we determined in D.03-05-033 and in D.03-06-069, the authority that we grant should apply prospectively, and not on a retroactive basis. The purpose of Section 851 is to enable the Commission to review a proposed encumbrance on utility property before it takes place, in order to take such action as the public interest may require. Granting this application on a retroactive basis would thwart the purpose of Section 851.

While we do not grant retroactive authority, we have in our order exempted the 255 transactions from Section 851 approval for the period of time prior to the effective date of this decision. This exemption is authorized by Section 853(b) and is explained more fully in Section 9 of this decision. We note that forecasts of revenues from leases and licenses have always been included in past general rate cases for PG&E as other operating revenues. Consequently, it is not unreasonable for PG&E to have concluded that the Commission and its staff were aware of the existence of these miscellaneous leases and licenses of PG&E property and permitted the practice to continue without objection.

We find that a penalty is not appropriate in this case. The company's failure to seek Section 851 approvals for the agreements at issue here caused neither physical nor economic harm to customers or competitors. The company has not benefited from the omission to seek advance Section 851 approval for the agreements, since the pecuniary benefits accrue mainly to ratepayers. To the extent Section 851 was not observed, such noncompliance did not affect any persons adversely.¹¹

We also are cognizant of the fact that we soon will be reviewing Commission practices as to GO 69-C and Section 851 as a result of the industry workshop that we ordered in D.02-10-057. We ordered the workshop to determine whether changes to GO 69-C would be worthwhile. It would be inappropriate to assess a penalty in this application before we have considered staff recommendations on our interpretation of GO 69-C and Section 851.

PG&E in its application asks that we grant authority for the utility to enter into extensions and minor modifications of the transactions in this application without applying to the Commission for approval of the changes. We grant this request for extensions or modifications of agreements which do not allow for or result in additional construction and may therefore warrant an amended Section 851 approval and environmental review.

Notice of this application appeared in the Commission's Daily Calendar on May 23, 2003. The Commission has received no protests.

In Resolution ALJ 176-3113, the Commission preliminarily categorized this proceeding as ratesetting, and preliminarily determined that hearings were not necessary. We confirm those determinations. As no hearing is required, pursuant to Rule 6.6 of the Rules of Practice and Procedure, Article 2.5 of the Rules ceases to apply to this proceeding.