Discussion of Section 851 Application
On May 12, 1999, SoCalGas filed its application, seeking authorization from the Commission to sell 36 vacant lots; two in Marina del Rey and 34 in Playa del Rey. SoCalGas has entered into contracts to sell the lots. SoCalGas' application is made under § 851, which requires Commission approval before a utility can sell, lease, assign, mortgage, or otherwise encumber the whole or any part of its property that is necessary and useful in the performance of its duties to the public.9 The Commission's role in examining transactions subject to § 851 is the protection of the public interest.10
Twelve of these lots are over abandoned and capped oil and gas wells. The late-filed protest by Grassroots et al. opposed the sale of the lots on the theory that the abandoned wells posed potential environmental, health and safety issues. As previously explained, CEQA applies to discretionary projects to be carried out or approved by public agencies, and the Commission must issue a discretionary decision (i.e., grant § 851 authority) without which the proposed activity will not proceed. Accordingly, CEQA applies to this application and the Commission is the Lead Agency for the proposed sale. While the project itself is the sale of the 36 lots, a "paper transaction," the construction of homes and a business are reasonable foreseeable indirect effects of the project. In addition, the Commission wanted an opportunity to investigate the concerns raised by the protestants and other concerned citizens and community members at the various Public Participation Hearings (PPH) held in a meeting room in the Playa del Rey/Westchester neighborhood. The Commission therefore determined that it could not rule on the § 851 Application until an environmental assessment was performed that addressed all the concerns raised, including the health and safety issues.
After thoroughly reviewing the Draft EIR and the Final EIR, we cannot conclude that the health and safety of the community will be compromised if the lots are sold and developed.
While SoCalGas seeks to sell all 36 lots, the CEQA analysis of options presented alternatives that involved selling none of the lots, or selling all the lots except those in Cluster 9 or those in Cluster 12. We carefully considered the alternatives presented in the Final EIR and are convinced that there is no compelling reason to not authorize the sale of all 36 lots. Declining to authorize the sale at all would not allow SoCalGas to obtain its objective of divesting itself of assets that are no longer "necessary or useful" to its storage operation and the ratepayers would be deprived of their appropriate allotment from the gain on sale. In addition as discussed above, the record does not support finding that the health and safety of the Playa del Rey community requires us to deny SoCalGas the authority to sell the lots.
Allowing a sale, but exempting Cluster 9 or Cluster 12, does not allow SoCalGas to achieve its complete objective of full divesture of these vacant lots, but also would not serve any environmental purpose. As the Final EIR discusses, leaving these lots in Cluster 9 or Cluster 12 would not bring added protections to either the monarch butterfly or the globose dune beetle because their habitats have been disturbed by the public. We therefore find that our approval of the project, the sale of 36 lots in Marina del Rey and Playa del Rey, is in the public interest and furthers the Commission's goals of protecting the ratepayer.
9 Section 851 reads in pertinent part:
No pubic utility . . . 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, . . . without first having secured from the commission an order authorizing it to do so.
10 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."
