2. Background
2.1. Parties to the Transaction
2.1.1. Pacific
Pacific is a Delaware limited liability company that is authorized to conduct business in this state. Pacific's principal place of business is located in Long Beach, California. Pacific is 100% owned by PEG, which in turn is owned by Plains All American Pipeline, L.P. (Plains All American).
Pacific is a public utility subject to the Commission's jurisdiction pursuant to Sections 216 and 228.1 Pacific owns and operates oil pipeline and storage facilities in Southern California which were originally built by Southern California Edison Company (SCE). Pacific acquired these facilities from SCE in 2003. The facilities consist of approximately 120 miles of pipeline, 75 miles of which are active, with connections to a marine berth at the Port of Long Beach and to Los Angeles area refineries, and associated pumping and heating stations. The facilities also include oil storage tanks with a nominal capacity of 9 million barrels, of which 7.5 million barrels are active. Pacific provides oil storage and transportation service to third party users pursuant to the terms of its tariffs approved by the Commission.
2.1.2. PEG
PEG, which is Pacific's direct corporate parent, is also a Delaware limited liability company, and is 100 percent owned by Plains All American. PEG's principal offices are located in Houston, Texas.
2.1.3. Plains
Plains is a Texas limited partnership that is authorized to conduct business in California. Plains' principal place of business is located in Houston, Texas.
Plains is also a subsidiary of Plains All American. Plains All American directly owns a 99.999 percent limited partnership interest in Plains and indirectly owns a .001 percent general partnership interest in Plains through its 100 percent ownership of Plains Marketing GP, Inc.
Plains is responsible for the various terminal operations owned and operated in different states by the Plains All American group of entities. For example, Plains owns and operates petroleum storage and terminal businesses in California, Texas, Oklahoma, Louisiana, New Jersey, and other states. Plains also owns and operates companies that offer other types of storage, such as liquefied petroleum gas, and companies that provide related services, such as marine towing and trucking.
2.1.4. Plains All American
Plains All American is a publicly traded master limited partnership engaged in the transportation, storage, terminaling and marketing of crude oil, refined products, liquefied petroleum gas, and natural gas. On average, Plains All American handles approximately 3 million barrels per day of crude oil, refined products and liquefied petroleum gas. Plain All American's units are traded on the New York Stock Exchange.
2.2. The Proposed Transaction
Pacific, PEG, and Plains (together, Applicants) have filed this application pursuant to Sections 851 and 854 to transfer the ownership of Pacific from PEG to Plains as part of an internal reorganization. Plains All American will remain the ultimate parent of Pacific after this transaction.
Applicants state that this transaction is part of an internal reorganization designed to transfer Pacific to the business unit within Plains All American that is responsible for terminaling and storage activities. The entities owned by Plains operate businesses which are similar or related to the storage and terminaling functions that Pacific provides to its customers. Applicants believe that the transfer of Pacific to the Plains group of entities will increase corporate efficiency and decrease paperwork.
According to the application, PEG's ownership of Pacific is a vestige of Pacific's previous owner, Pacific Energy Partners, LP, which merged with Plains All American in 2006.2 PEG currently has no active role in the management or day-to-day operations of Pacific.
Applicants state that although this reorganization will change the immediate ownership of Pacific, Plains All American will retain the ultimate ownership and control of Pacific. In addition, the day-to-day management and operations of Pacific will remain the same. This reorganization also will not affect the rates, terms, and conditions under which Applicants currently provide service to customers in California.
2.3. Procedural History
Applicants filed this application on May 22, 2009. No protests were filed.
1 All Code references are to the Public Utilities Code, unless otherwise stated.
2 In Decision (D.) 06-09-017, the Commission authorized Plains All American to acquire control of Pacific by acquiring Pacific's parent company, PEG, through a merger of Plains All American with Pacific Energy Partners, LP.
