6. Miscellaneous Issues

6.1 Deminimus transactions under Section 851 -- Workshop attendees agreed that the time, cost and uncertainty of the Public Utilities Code Section 851 process (Section 851) effectively prevents many transactions from going forward. Parties agreed that the filing costs and transaction costs outweigh the revenues for small transactions, and suggested that the Commission could establish a "deminimus" transaction test structured in two parts: a dollar ceiling per transaction, and a total dollar cap on transactions per year.

6.2 A test for "necessary and useful" -- Some Parties indicated that a test for the term "necessary and useful" as used in Section 851 would be helpful in clarifying the appropriate use of General Order 69-C: the GO only applies to public utilities covered by the provisions of Section 851, and Section 851 only applies to transactions involving property that is necessary or useful. These Parties suggested that a separate docket be established to deal with how the determination of "necessary and useful" is established. One Party provided an example that would benefit from Commission guidance: some utilities distinguish between owned property and leased property when considering the applicability of Section 851 and GO 69-C, arguing that owned property can be considered "surplus" and not considered "necessary or useful" and therefore exempt from Section 851, while property leased from a third party would continue to be considered "necessary or useful" and subject to both Section 851 and GO 69-C.

6.3 Transactions with other public agencies -- Several Parties raised the issue of transactions that involve other public agencies. Parties indicated that requests by public agencies often involve constraints reflecting either a need for an expedited schedule or other constraints associated with issues such as obtaining public funding. Examples of these requests might include easements or facility relocations related to road improvement projects, and agreements to attach communications equipment to existing facilities. One Party requested that the Commission clarify that the exemption contained in the GO regarding revocability for government agencies is still applicable. Another Party suggested that the Commission expedite the Section 851 process for transactions between public agencies and public utilities.

6.4 Other miscellaneous issues - There were three additional miscellaneous issues raised by the Workshop attendees. First, one Party indicated that the Commission should resolve any concerns regarding affiliate transactions associated with the GO. This situation would arise when a regulated utility enters into a transaction with one of its own affiliates under the GO or Section 851, either as a license or a lease. The second issue involves the notion that a transfer of assets is different from a use of space, and that a distinction should be made in the Section 851 process between transactions to transfer assets and transactions to encumber utility property by a lease. Finally, one Party indicated that the Commission should clarify the distinction between a license and a lease, and indicate how these two should be applied in structuring utility transactions with public agencies, other utilities, and third parties. While the legal distinction between a license and a lease is conceivably well known, the notion of which potential utility activities or transactions would more appropriately fall under either a lease or a license is perhaps the real issue, which reduces this issue to the definition of "limited uses" for which a license would be appropriate, leaving all other activities subject to a lease. The issue of defining "limited use" is examined further below, and a list of potential transactions for which GO 69-C might be applicable was developed from examples provided by Workshop attendees.