ALJ/JLG/jyc DRAFT Item 2

3/6/2002

Decision DRAFT DECISION OF ALJ GRAU (Mailed 2/4/2002)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of Verizon California Inc. (U 1002 C) for Exemption from the Requirements of Article 5 (§§ 816-830) of the Pub. Util. Code Requiring Commission Approval for Utility Issuance of Stocks, Bonds or Notes.

Application 01-04-023 (Filed April 18, 2001)

OPINION PARTIALLY GRANTING VERIZON

CALIFORNIA INC.'S APPLICATION FOR EXEMPTION FROM

SECTIONS 816-830 OF THE PUBLIC UTILITIES CODE

I. Summary

This decision partially grants Verizon California Inc.'s (Verizon) application for exemption from the Commission's Competitive Bidding Rule and the requirements of Article 5 (§§ 816-830) of the Public Utilities Code. We grant Verizon's request for exemption from the Commission's Competitive Bidding Rule for certain financing transactions, because an exemption would provide Verizon with the flexibility to meet its financing requirements on the most favorable terms available. We also permit Verizon to file the General Order (GO) 24-B reports, which list the amount and purpose of debt, quarterly instead of monthly, in accordance with relaxed requirements authorized for certain energy utilities. All relief granted is prospective.

We deny Verizon's request for exemption from §§ 816-830, because Verizon has not demonstrated that relieving it from filing those applications is in the public interest. Under the Commission's New Regulatory Framework (NRF), we retained our responsibility and authority over Verizon's stock and security transactions and review of those transactions applications is one component of the NRF monitoring program. Verizon must continue to comply with §§ 816-830 at this time.