V. Pub. Util. Code § 851

The purpose of § 851 is to enable the Commission to review a proposed transaction before it takes place in order to take such action as the public interest may require. In this case, PG&E granted Broadwing a revocable license to use its property and install facilities prior to seeking authority to convert the revocable license into an irrevocable lease. PG&E claims it relied on Commission General Order (GO) 69-C to grant a revocable license to Broadwing, and allow construction on its property in anticipation of this application.

This case poses an issue as to whether the Project was appropriately undertaken under a revocable license as opposed to requiring prior Commission approval under a lease. GO 69-C provides an exception to the § 851 requirement for prior approval of, among other things, licenses of utility property for limited uses. GO 69-C establishes three key criteria for the exception:

(1) The interest granted must not interfere with the utility's operations, practices, and service to its customers;

(2) The interest granted must be revocable either upon the order of the Commission or upon the utility's determination that revocation is desirable or necessary to serve its patrons or consumers; and

(3) The interest granted must be for "limited" uses of utility property.

In D.00-12-006, the Commission determined that "GO 69-C's provisions regarding `limited use' of utility facilities do not extend to the use of facilities that are to be constructed without the benefit of CEQA review."<sup>3</sup> The Commission also stated that: "We do not believe that undertaking a commitment with long term implications is a `limited use' that qualifies for GO 69-C treatment."⁴ In addition, the Commission stated that it would "deny applications to convert GO 69-C agreements to lease agreements in the future, where the structure of those transactions was designed to circumvent the advance approval requirements of Section 851, and the associated CEQA review requirement."⁵

The aerial installation involved in the Project may have been a limited use that is easily removed. However, the 2.3 miles of trenching and boring are significant and permanent structures, and not easily removed. Therefore, the revocable license is essentially irrevocable for practical purposes. As a result, the Project exceeded the scope of the limited uses permitted by GO 69-C, and PG&E violated § 851. However, D.00-12-006 was adopted after this application was filed and after most of the construction was completed. Under these circumstances, we find that it may not have been clear to PG&E that a § 851 application was needed. As a result, we will not impose a fine for violating § 851.⁶