ORDER NO. 96-022

ENTERED JAN 12 1996

THIS IS AN ELECTRONIC COPY

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UP 124

DISPOSITION: APPLICATION GRANTED

On December 4, 1995, Northwest Natural Gas company (NWNG) filed this application with the Public Utility Commission pursuant to ORS 757.480. NWNG is requesting Commission approval to enter into a lease of company-owned property to the City of Portland.

At its public meeting on January 9, 1996, the Commission adopted the staff recommendation.

Based on the application and the Commission's records, the Commission makes the following:

FINDINGS OF FACT

NWNG provides natural gas service to the public in Oregon.

NWNG proposes to lease one block of company-owned land in Portland's Old Town to the City of Portland (City) for purposes of establishing a Classical Chinese Garden. The land is one full block bounded by NW 2nd, NW 3rd, NW Flanders, and NW Glisan Streets and is presently used as a parking lot for both NWNG and employee vehicles. The land has a current appraised value of $1,100,000.

The idea of a classical Chinese Garden began in 1988 after Portland entered into a Sister City relationship with Suzhou and Kaoshsiung. In 1989, City Commissioner Mike Lindberg appointed a task force which ultimately produced an initial feasibility study for the garden. In 1995, the City established a Mayor's Classical Chinese Garden Steering Committee to oversee the project.

NWNG agreed to an option to lease the city block for $1 per year for 99 years. On March 8, 1995, the Portland City Council unanimously approved an option to lease this property. Before the City can exercise the option, however, several conditions, including Commission approval of the lease arrangement, must be satisfied.

The proposed transaction will not impose additional costs on ratepayers. NWNG is likely to have reduced property taxes as well as a reduction of approximately $171,000 in the rate base. NWNG may also avoid up to $700 per month in security fees now paid to patrol company and employee vehicles parked in the block.

The option agreement contains provisions that may result in additional revenue or expenses accruing to NWNG. To ensure that the company's accounting treatment is in the public interest, NWNG shall file an annual report summarizing revenues and expenses associated with this transaction.

There is no indication that the proposed sale will impair the company's ability to provide its public utility service.

OPINION

Applicable Law

ORS 757.005(1)(a)(A) defines a public utility as an entity that owns, operates, manages, or controls any plant or equipment in this state for the furnishing of heat, light, or power to the public.

ORS 757.480 provides that a public utility doing business in Oregon shall first obtain Commission approval for any transaction to sell, lease, assign or otherwise dispose of property of such public utility necessary or useful in the performance of its duties to the public or any part thereof of a value in excess of $10,000.

NWNG is a public utility subject to the Commission's jurisdiction. The proposed transaction involves property which has a value in excess of $10,000.

There is no indication that the proposed sale will impair PGE's ability to provide public utility service in Oregon.

CONCLUSIONS

1. NWNG is a public utility subject to the jurisdiction of the Public Utility Commission of Oregon.
2. NWNG's proposed transaction meets the requirements of ORS 757.480.
3. The application should be granted.

ORDER

IT IS ORDERED that:

1. The application of Northwest Natural Gas company for authority to lease one full block of company-owned property to the City of Portland for purposes of establishing a Classical Chinese Garden is granted.
2. NWNG shall file annual reports summarizing its revenues and expenses associated with this transaction.

Made, entered, and effective ________________________.

A party may request rehearing or reconsideration of this order pursuant to ORS 756.561. A party may appeal this order pursuant to ORS 756.580.