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Solimar Research

Public Gains 140,000 Acres Of PG&E Land

CP&DR Staff on
May 1, 2004

The bankruptcy of Pacific Gas & Electric Company has resulted in a stunning windfall for the state. As part of a bankruptcy settlement approved in April, PG&E agreed to offer conservation easements or title to 140,000 acres of land, most of which lies around the utility company’s hydroelectric system.

The settlement creates a new Pacific Forest and Watershed Land Stewardship Council to oversee the lands, which cover about 980 parcels in 21 counties from Shasta County in the north to Kern County in the south. Additionally, PG&E must provide $100 million — $50 million for river restoration, reforestation and recreational improvements, $30 million for urban youth programs, and $20 million for planning.

The board of the stewardship council is to be composed of state agency representatives, and appointees from interest groups as varied as the Association of California Water Agencies and the Trust for Public Land. The board is supposed to "make each decision by consensus." The Public Utilities Commission will maintain some level of oversight. The first meeting of the stewardship council was scheduled for April 29 in San Francisco.

The settlement charges the council with writing a "land conservation plan" that preserves or enhances "beneficial public values." Among other things, the plan is supposed to figure out how to provide revenue to counties so that land transactions are "tax neutral" for each county.

Under the settlement, PG&E and other holders of water rights will maintain those rights. Also, PG&E gets to keep its hydroelectric facilities.

PG&E assembled its land holdings and system of dams beginning in the 19th century. Most of the lands are in the Sierra Nevada, with concentrations along the Pit, Feather, Yuba, American, Mokelumne and Stanislaus rivers. Over the decades, the reservoirs and adjacent forest lands became popular with boaters, anglers, campers, and hikers. Some PG&E lands also have provided grazing and timber harvesting opportunities. Many of the PG&E properties abut public lands, and the boundaries are often obscure.

Prior to filing bankruptcy in April 2001 — a move that followed the energy mess wrought by deregulation — PG&E sought permission from the PUC to auction its lands (see CP&DR, January 2001). That proposal drew protests from numerous federal and state agencies, environmentalists and outdoors groups. They feared the properties could get chopped up and developed, harming habitat and water quality, and bringing urban development to remote areas. A 4,100-page environmental impact report prepared by the PUC identified many potential negative consequences of the auction.

The proposed auction apparently found no favor in the bankruptcy court. Instead, disposition of the lands became part of the overall settlement, which became final in April.

Although not exactly a "gift" of land, PG&E’s land conservation commitment appears to be one of the largest transactions of its type in U.S. history. Backers have compared it to the creation of a new national park or monument.