ALJ/KJB/sid Mailed 9/5/2003

Decision 03-09-007 September 4, 2003

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of Pacific Gas and Electric Company (U 39 M), a California corporation, for Authorization Pursuant to Public Utilities Code Section 851to Approve an Existing Lease and Proposed Lease Amendment with Johns Manville to Allow Johns Manville to Upgrade its Existing Electrical System.

Application 03-05-032 (Filed May 21, 2003)

DECISION GRANTING APPROVAL UNDER PUBLIC UTILITIES CODE

SECTION 851 FOR LEASE OF REAL PROPERTY

We grant the Application of Pacific Gas & Electric Company (PG&E) for approval of the lease of a certain parcel of land in Glenn County from PG&E to Johns Manville under Public Utilities Code Section 851.¹

Background

In 1993, PG&E granted a 20-year lease ("Existing Lease") to Schuller, a predecessor in interest to Johns Manville, so that Schuller could begin operating an existing electric substation located in a portion of PG&E's Logan Creek Substation property in Glenn County, California. At that time, Schuller also purchased an existing transformer bank (a portion of the existing substation equipment), including the right to use two of PG&E's existing unoccupied underground conduits. When Schuller purchased the transformer bank, it installed two sets of conductors in existing PG&E conduits between the substation and the plant. PG&E originally constructed the substation in 1976 to relieve overloads. Since 1993 the transformer bank and underground conductors have been used solely to supply electrical service to what is now Johns Manville's glass manufacturing plant.

Johns Manville is upgrading the electrical equipment that provides services to its glass manufacturing plant. As part of that upgrade, Johns Manville seeks to install new underground conductors, control cables and telecommunications cables in a new 4-foot wide by 5-foot deep trench approximately 246 feet long from its lease area, across PG&E substation property, out to Country Road 48. The property to be trenched is relatively level, barren ground with a paved road across a portion of it. Johns Manville will lay three sets of conductors in the trench, cover them with soil, and pour on a cement cap. After the cap has cured, Johns Manville will bury the cables in the trench, fill it and restore the area and repave as necessary.

PG&E is seeking to amend the existing lease to allow the building of the trench and to grant Johns Manville use of an existing paved access road.

The Application

On May 21, 2003, PG&E filed the application, seeking authorization from the Commission to amend the Existing Lease to permit Johns Manville to dig the trench and use the existing paved access road. The application is made under Section 851, which requires Commission approval before a utility can sell, lease, assign, mortgage, or otherwise dispose of or encumber the whole or any part of its property that is necessary or useful in the performance of its duties to the public.² Leasing property that is no longer necessary or useful in the provision of utility service is a disposition of property and therefore requires approval under Section 851.³

No public utility other than a common carrier by railroad subject to Part I of the Interstate Commerce Act (Title 49, U.S.C.) shall sell, lease, assign, mortgage, or otherwise dispose of or encumber the whole or any part of its railroad, street railroad, line, plant, system, or other property necessary or useful in the performance of its duties to the public, or any franchise or permit or any right thereunder, nor by any means whatsoever, directly or indirectly, merge or consolidate its railroad, street railroad, line, plant, system, or other property, or franchises or permits or any part thereof, with any other public utility, without first having secured from the commission an order authorizing it so to do. Every such sale, lease, assignment, mortgage, disposition, encumbrance, merger, or consolidation made other than in accordance with the order of the commission authorizing it is void. The permission and approval of the commission to the exercise of a franchise or permit under Article 1 (commencing with Section 1001) of Chapter 5 of this part, or the sale, lease, assignment, mortgage, or other disposition or encumbrance of a franchise or permit under this article shall not revive or validate any lapsed or invalid franchise or permit, or enlarge or add to the powers or privileges contained in the grant of any franchise or permit, or waive any forfeiture. Nothing in this section shall prevent the sale, lease, encumbrance or other disposition by any public utility of property which is not necessary or useful in the performance of its duties to the public, and any disposition of property by a public utility shall be conclusively presumed to be of property which is not useful or necessary in the performance of its duties to the public, as to any purchaser, lessee or encumbrancer dealing with such property in good faith for value; provided, however, that nothing in this section shall apply to the interchange of equipment in the regular course of transportation between connecting common carriers.