Summary - California



ALJ/KJB/ek4 PROPOSED DECISION Agenda ID #15534Ratesetting5/11/2017Decision _________________BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIAIn the Matter of the Joint Application of Pacific Maritime Freight, Inc. (VCC-88) and of Catalina Freight Line, Inc. (VCC-58) for Authorization to Transfer Catalina Freight Line Inc.’s Certificate of Public Convenience and Necessity to Operate as a Vessel Common Carrier Transporting Freight to and from Santa Catalina Island to Pacific Maritime Freight, Inc.Application 16-05-002(Filed May 4, 2016)DECISION GRANTING JOINT APPLICATION TO TRANSFER CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITYSummaryWe grant the joint application of Pacific Maritime Freight, Inc. (PMF) and Catalina Freight Line, Inc. (CFL) for authorization to transfer CFL’s Certificate of Public Convenience and Necessity to PMF. This proceeding is closed.Background For a period of 40 years, commencing April 1976 and expiring March 31, 2016, applicant Catalina Freight Line, Inc. (CFL) was tenant under a long term lease from Santa Catalina Island Company (SCICO) for docking rights, use of a freight yard, and a warehouse at Pebbly Beach near Avalon on Santa Catalina Island. During the term of this lease CFL was the only vessel common carrier (VCC) allowed to dock and unload freight at Pebbly Beach on a regular schedule. Effective April 1, 2016, SCICO entered a similar exclusive long-term lease with another VCC, effectively depriving CFL of its sole source of revenue. Thereafter, CFL ceased operations and went out of business. As part of the process of going out of business, CFL entered into agreement to sell its Certificate of Public Convenience and Necessity (CPCN) to applicant PMF for $25,000 in cash.PMF is authorized under its CPCN to make unscheduled deliveries of freight to campgrounds and similar sites on Catalina Island but specifically excluding deliveries to Avalon and the Isthmus, two areas to which deliveries are permitted pursuant to CFL’s CPCN. Thus acquisition of CFL’s CPCN would enable Pacific Maritime Freight, Inc. (PMF) to provide freight transport service to the areas of the island where most of the companies, residents and institutions that receive freight shipments are located. Procedural History On May 4, 2016 the two parties filed this joint application for approval of the sale transaction. There were no protests to the application.A telephonic prehearing conference (PHC) was held on January 23, 2017 to discuss the scope, the schedule and other procedural matters. At the PHC, the following issues were identified as constituting the scope of the proceeding:Whether the requested transfer of CFL’s CPCN to PMF is reasonable and justified;Whether the proposed sale price is reasonable and justified; andWhether PMF has the experience, capacity and resources to effectively and appropriately utilize the CPCN once the transfer is completed. On January 31, 2017, the assigned Commissioner issued a Scoping Ruling that identified the above issues as constituting the scope of the proceeding and determined that evidentiary hearings are not necessary.DiscussionThe joint application recites that following the loss of its lease at Pebbly Beach, CFL went out of business. It ceased operations as a VCC and put its assets, including its CPCN, up for sale. PMF, a licensed VCC that delivers freight to campsites and other locations on Santa Catalina Island on an unscheduled basis, seeks to acquire CFL’s license because it includes the right to deliver freight to customers in Avalon and the Isthmus, the most populous parts of the island. Customers in Avalon and the Isthmus are served by freight deliveries at Pebbly Beach. PMF is aware, according to the application, that at present it has no right to unload freight at Pebbly Beach or to store delivered freight in the warehouse at that location. However, PMF believes that acquisition of the CFL license would enable it to bid for business as a back-up supplier of freight to the populous locations on those occasions when the current operator of scheduled freight delivery services requires additional assistance. PMF believes that in such a circumstance SCICO would grant it permission to deliver freight at that location. The parties reached a price of $25,000 for the license through a process of arms-length negotiation and we see no reason to question the reasonableness of that sales price. Similarly, we find no reason to question the fitness of PMF as a VCC to provide non-scheduled back-up service to Pebbly Beach should it succeed in obtaining such a contract. PMF already provides such service to other locations on the island where there are no loading docks or warehouses and can more easily deliver to Pebbly Beach than to the locations it currently serves.Categorization and Need for HearingsIn Resolution ALJ 176-3377 dated May 5, 2016, the Commission preliminary categorized this application as ratesetting and preliminary determined that hearings were necessary.? No protests have been received.? There is no apparent reason why the application should not be granted.? Given these developments, a public hearing is not necessary, and we change the preliminary hearing determination to “not required.”Comments on the Proposed DecisionThis is an uncontested matter in which the decision grants the relief requested. Accordingly, pursuant to Section?311(g)(2) of the Public Utilities Code and Rule 14.6(c)(2), the otherwise applicable 30day period for public review and comment is waived.Assignment of ProceedingCommissioner Liane M. Randolph is the assigned Commissioner and Karl J. Bemesderfer is the assigned Administrative Law Judge.Findings of Fact1.CFL has ceased operations and gone out of business.2.CFL’s CPCN authorizes it to deliver freight to Avalon and the Isthmus, the two most populous locations on Catalina Island.3.PMF is a licensed vessel common carrier that delivers freight to campgrounds and other locations on Catalina Island not including Avalon and the Isthmus. 4.The parties negotiated the sale price of CFL’s CPCN at arms’ length. Conclusions of Law1.The transfer of CFL’s CPCN to PMF is reasonable and justified.2.The sale price of $25,000 is reasonable and justified.3.PMF has the experience, capacity and resources to effectively and appropriately utilize the CPCN.O R D E RThe joint application of Catalina Freight Line, Inc. and Pacific Maritime Freight, Inc.to transfer Catalina Freight Line’s Certificate of Public Convenience and Necessity to Pacific Maritime Freight, Inc. is granted.The preliminary determination in Resolution ALJ 176-337 that hearings are required is changed to “Hearings are not necessary.”Application 16-05-002 is closed.Dated __________________, 2017, at San Francisco, California ................
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