Discussion
Pub. Util. Code § 851 provides that no public utility "shall sell, lease, assign, mortgage, or otherwise dispose of or encumber the whole or any part of its ... property necessary or useful in the performance of its duties to the public ... without first having secured from the commission an order authorizing it so to do." The Commission's role in examining transactions subject to Section 851 is the protection of the public interest.5 The Commission has determined that the public interest is served when utility property is used for other productive purposes without interfering with the utility's operations,6 and such is the case here.
There is in addition a benefit to be gained here in that PG&E will no longer be responsible for the ongoing maintenance and carrying costs of property ownership (as distinguished from the costs of maintaining the electric facilities traversing the property), and the capital it would otherwise devote to that purpose may be put to other productive uses. PG&E has reserved in the grant deed sufficient access rights to ensure the sale will not impair the property's use for public utility purposes now or in the future. To assure its ratepayers and the Commission that is the case, it has agreed that any future easement expansion costs which are not funded by new customers pursuant to the tariffs will be borne by the company and will not be reflected in rates.
As PG&E also points out, Santa Rosa could be expected to exercise its power of eminent domain if it were necessary to do so. By agreeing to a sale, PG&E is securing the benefits of a negotiated outcome and avoiding the potential costs to itself, to Santa Rosa and to the public of the litigation that would accompany a condemnation proceeding.
We recently issued two other decisions in which, as we do today, we found PG&E at fault for misplaced reliance on GO 69C when our approval under Section 851 was required.7 Both of those situations presented similarities with the case before us, and both are also distinguishable from today's. There, as here, PG&E allowed significant construction under a lease or easement we later determined to have been improperly executed under GO 69C. There, as here, PG&E delayed filing an application for our approval under Section 851 to correct the improper grants. There, PG&E maintained that its earlier GO 69 agreements did not require our approval under Section 851, whereas in the instant application PG&E now acknowledges that Commission decisions issued shortly after the easements were granted did establish that our advance approval was needed.
In those cases, we declined to impose sanctions because it may not have been clear to PG&E when the transactions were executed that Section 851 approval was needed. And, in one of those earlier decisions, we made our approval of the lease prospective only. We arrive at the same results today: We will not impose sanctions, but we also decline to make our approval of PG&E's 2001 easement grants retroactive as PG&E requests.
We conclude that the proposed sale is in the public interest and should be approved.
5 Section 853(a): "This article [Article 6, Transfer or Encumbrance of Utility Property, Sections 851 through 856] ... shall apply to any public utility ... if the commission finds ... that the application of this article is required by the public interest." 6 In D.93-04-019, p. 3, we observed: "Joint use of utility facilities has obvious economic and environmental benefits. 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." 7 D.04-10-036 in A.00-03-032, and D.04-10-018 in A.04-01-016.
