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Decision No. 55910
BEFORE TIi"'E PUBLIC UTILITI]~S COHi,iISSION OF THE STATE OF CALIFORNIA
,
In the Matter of the Application of )
PACIFIC GAS AND ELECTRIC CCI';Pf.iJY )
for an order issuh:g a certificate of <
public convenience and necessity to )
exercise the right~ privilege and ) Application No. 39357
franchise granted to applicant by )
Ordinance No. 551 of the Corr~cn )
Cour.cil of the City of Gilroy, County)
of Santa Clara, State of California~ )
(Electric) )
F. T. Searls, Malcolm A. MacKillop and David R. Fuller,
by John s. CooDe~, for applicant.
o PIN ION
Pacific Gas and Electric Company, in this proceeding, asks
for a certificate of public convenience and necessity to exercise
the rights and privileges of a franchise granted by the City of
Gilroy, permitting the installation, maintenance and use of an
electric distribution and transmission system upop the streets of
said city. A public hearing was held before Examiner Thomas E. Daly
on November 7J 1957J at San Francisco.
The franchise referred to, a copy of which is attached to
the application and designated as Exhibit A, was granted by the city
in accordance with the Franchise Act of 1937 and is of indeterminate
duration.
Applicant is presently serving the City of Gilroy pursuant
to an electric franchise acquired from its predecessor, Coast Counties
Gas and Electric Company by Ordinance No. 454. The franchise was
granted for a 25-year term. Said francr:lse provides fol' an annual
payment of 2 pel' Gent of' the gross annual receipts dCJ:'ived by appli-
cant from the sale of elect~icity within the city. Since the Coast
Counties Gas and Electric Company was merged with applicant on August
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31J 19;,4: applicant has net complied with the 2 per cent provision,
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but has paid the city an amount equal to the highest yearly payment
ever made by Coast Counties, with the understanding that it would
increase the payment whenever a payment under the Franchise Act of
1937 would exceed such amount. Applicant followed this procedure for
the years 1954, 1955 and 1956. As consideration for the new franchise
applicant agreed to pay to the city the difference between the pegged
price paid for the years 1954, 1955 and 1956 and the 2 per cent amount
provided for in the old franchise, plus interest at 5 per cent per
annum as well as the full 2 per cent of the sales from January 1,
1957 to and including June 12, 1957, the effective date of the new
franchise. The cost of acquiring the new franchise, including publi-
cation costs, amounted to $3,752.02.
Under the terms of the new franchise applicant has agreed
to pay an annual fee in accordance with the 2 per cent provision of
the old franchise. Such amount will be paid until June 17, 1972, the
expiration date of the old franchise. Thereafter a fee will be pay-
able annually to the city equivalent to 2 per cent of the gross
receipts arising from the use, operation, or possession of the fran-
chise, but not less than 1 per cBnt of the gross annual receipts
arising from the sale of electricity within the limits of the city
under said franchise.
No objection to the granting of the requested ceI'tificate
has been entered. Furthermore, this utility or its predecessors have,
for many years, served electricity in and about the City of Gilroy
witho~t competition. As of December 31, 1956, it served 2,175 elec-
tric customers within the city.
After consideration it is found as a fact that public con-
venience and necessity require the exercise by applicant of the right,
privilege and franchise granted to applicant by Ordinance No. 551 of
the City of Gilroy.
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granted is subject to the follm'ling provjsions of lay!:
1. That the COlTl.lnission shall have no pm'ler to authorize
c,_ ~,. __. the capitalization of the J:\l'J,nchise involved herein
or this certificate of public convenience and neces-
sity or the righ~ to own, opera~e or enjoy such
franchise or certificate of public convenience and
necessl't,r l'n px"c,C,c:. (')'{' t"'c. ;::';:'t"~'Y';- (Oycl"slue of a'r,-y
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tax or annual charge) actually paid to the State or
to a political subdivision thereof as the considera-
tion for the grant of such franchise} certificate of
public convenience and necessity or right.
2. That the franchise involved herein shall never be
given any value before any court or other public
authority in any proceeding of any character in excess
of the cost to the grantee of the necessary publica-
tion and any other sum paid by it to the municipality
therefor at the time of the acquisition thereof.
ORDER
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The above-entitled application having been filed, a public
hearing having been held, the matter having been submitted and now
being ready for decision,
IT IS HEREBY ORDERED that a certificate of public conveni-
ence and necessity be and it is granted to Pacific Gas and Electric
Company to exercise the rights and privileges granted by the City of
Gilroy, by Ordinance No. 551 adopted May 13, 1957.
The effective date of this order shall be twenty days after
the date hereof.
Dated at San Francisco, California, this loth day of
December, 1957.
PETER E. MITCHELL
President
RAY E. UNTEHEINER
IVIA TTHE~'J J. DOOLEY
REX HARDY
C. LYN FOX
Commissioners
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