VIII. Comments on Draft Decision

The draft decision of the ALJ was mailed to the parties in accordance with Pub. Util. Code § 311(g)(1) and Rule 77.7. Comments were received from SDG&E, Whispering Hills, and ORA.

In its comments, SDG&E points out an inconsistency between the text of the decision and Ordering Paragraph 3, and suggests that Ordering Paragraph 3 be corrected. (SDG&E Comments, p. 11.) We have corrected Ordering Paragraph 3 to properly refer to "non-utility structures."

SDG&E also requests that the decision expressly limit its scope to the specific facts of this case. (SDG&E Comments, p. 10.) Given the (hopefully) unique facts surrounding this transaction, and the fact that the Commission is not generally bound by its own precedent, it is not clear exactly what SDG&E is concerned about. Nevertheless, we will note that this decision is based on the facts currently before the Commission, and this decision in no way limits the ability of the Commission to issue any future orders it deems appropriate.

Unfortunately, the remainder of SDG&E's comments consist of ad hominem attacks on the local residents that intervened in the case, and mischaracterizations of the law, the record, and the draft decision.

SDG&E's central claim is that: "The Draft Decision commits legal error by ignoring the substantial evidence adduced herein supporting the cash consideration SDG&E is receiving as part of the proposed transaction." (SDG&E Comments, p. 4.) The draft decision did in fact carefully consider the evidence presented by SDG&E and Whispering Hills. SDG&E more accurately describes its problem with the draft decision later in its comments, where it argues that the allegations presented by the local residents: "[H]ave very little substance and certainly should not be accorded the weight the Draft Decision provides - enough weight to overcome the evidence provided by SDG&E and the Developer supporting the purchase price." (Id., p. 7.) While SDG&E disagrees with how the draft decision weighed the conflicting evidence, that does not constitute legal error, nor does it support SDG&E's claim that the draft decision ignored SDG&E's evidence.

More troubling is SDG&E's attempt to discredit the local residents who participated in this proceeding. The local residents (Ms. Fox, Mr. Mathewson, and Mr. Nielsen) are not regular participants in Commission proceedings, but they followed proper Commission procedures and presented clear and cogent arguments. Nevertheless, SDG&E characterizes the draft decision's serious consideration of their claims as: "[A]llowing isolated local residents to obstruct transactions not to their liking merely by alleging, without a competing independent appraisal or other competent evidence, that a negotiated sales price is too low." (SDG&E Comments, p. 2.)

In fact, it was Mr. Mathewson who presented to the Commission the significant documentary evidence that Whispering Hills had entered into an agreement to resell 0.95 acres of the land that it will acquire from SDG&E for $965,000. This evidence was not provided by SDG&E. Given the problems with SDG&E's application, including SDG&E's failure to serve the application on anyone other than itself and Whispering Hills, and its failure to provide relevant evidence to the Commission, SDG&E is not in a position to be impugning the character and motivations of Ms. Fox, Mr. Mathewson, and Mr. Nielsen.

In its comments on the draft decision, Whispering Hills expresses some sympathy for the arguments it expected SDG&E to make in its comments. (Whispering Hills appears to have received a preview of SDG&E's comments.) Nevertheless, Whispering Hills urges the Commission to adopt the draft decision without delay.

ORA "applauds the overall direction and thrust" of the draft decision in its comments, but requests that aspects be made more detailed. First, ORA requests that the Commission set an end date for the negotiations. This does not appear to be necessary, given the apparent alignment of interests of SDG&E and Whispering Hills. Second, ORA recommends that SDG&E be required to provide information about the assessed value of comparable parcels of land to assist the Commission in evaluating the sale price of the property. SDG&E has the option of providing such information, but we will not require it.

Reply comments were received from SDG&E and ORA. SDG&E's reply comments criticize ORA's recommendations. While we agree with some of the points raised by SDG&E, SDG&E takes its argument too far by essentially arguing that the Commission cannot request specific documentary evidence. (SDG&E Reply Comments, pp. 2, 4.) While we choose not to request such evidence here, we are not so arbitrarily limited in our ability to build an evidentiary record as SDG&E appears to believe.

ORA's reply comments excoriate SDG&E, arguing that SDG&E's comments lack merit, particularly in "conveniently" ignoring its own data that SDG&E ratepayers would substantially benefit from a higher sale price. (ORA Reply Comments, pp. 2-4.) ORA also criticizes SDG&E's claims for the value of its own evidence, arguing that: "[F]ar from offering `over-whelming evidence' of the value of its proposed transaction to its ratepayers, SDG&E's application offers self-serving and-at best-a minimal justification for approving the transaction." (Id., p. 2.) And: "ORA is similarly unimpressed with SDG&E's valuation evidence particularly when SDG&E's own data responses proves that its ratepayers would substantially benefit from a higher sales price. The notion that the DD commits legal error simply because it does not accept the utility's position in a given case is simply wrong." (Id., p. 3.)

ORA noted that while Whispering Hills' comments were "more nuanced" than those of SDG&E, they were based on self-interest, and: "[S]hould have little bearing on the Commission's ultimate disposition of this proceeding." (ORA Reply Comments, pp. 1, 3-4.)

Other than correcting the error in Ordering Paragraph 3, no changes are made to the decision.

Findings of Fact

1. The record contains conflicting information relating to the value of the property that SDG&E proposes to sell.

2. This Commission previously approved the temporary and permanent relocation of the transmission lines at issue, in response to SDG&E Advice Letter 1566-E.

3. Allowing Whispering Hills to grade the property at issue will not adversely affect SDG&E's ability to provide safe and reliable electrical service.

4. Grading of land is a project subject to review under CEQA.

5. The City of San Juan Capistrano and the Capistrano Unified School District are the Lead Agencies for environmental review under CEQA.

6. The Commission is a Responsible Agency for environmental review under CEQA.

7. The environmental impacts of the grading at issue have been mitigated to less-than-significant levels by mitigation measures adopted by the Lead Agencies.

Conclusions of Law

8. It is not clear that the proposed $100,000 sale price for the property is reasonable.

9. Allowing grading of the property at issue is consistent with this Commission's approval of Advice Letter 1566-E, and should be approved.

10. The Commission, in its role as a responsible agency, has reviewed the environmental documents prepared by the Lead Agencies and has complied with the requirements of CEQA.

11. We find that the Lead Agencies adopted reasonable and feasible mitigation measures for grading activities to either avoid or reduce any potentially significant environmental impacts to less-than-significant levels and we adopt those applicable grading mitigations for purposes of our approval.

INTERIM ORDER

IT IS ORDERED that:

12. San Diego Gas & Electric Company (SDG&E) is to enter into further negotiations with Whispering Hills, LLC (Whispering Hills) regarding the price to be paid for the property, as described above.

13. Upon completion of its further negotiations with Whispering Hills, SDG&E shall file and serve a motion, requesting leave to modify its application to reflect the results of the negotiations, as described above.

14. SDG&E is authorized to allow Whispering Hills to perform grading on the specified portion of SDG&E's property. No permanent non-utility structures may be constructed on the property at issue unless and until final approval of the sale application is granted.

15. The assigned Commissioner and Administrative Law Judge may issue such rulings as necessary to administrate this proceeding.

This order is effective today.

Dated April 7, 2005, at San Francisco, California.

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