5. Assignment of Proceeding
Timothy Alan Simon is the assigned Commissioner and John S. Wong is the assigned ALJ in this proceeding.
1. A joint motion to adopt a Settlement Agreement of the Phase Two issues was filed on June 2, 2009.
2. On July 2, 2009, Shell Energy filed its comments on the joint motion to adopt the Settlement Agreement and requested that certain provisions of the Settlement Agreement be clarified or eliminated.
3. The Settlement Agreement contains the recommendations of the settlement parties on the Phase Two issues, and Attachments 1 to 4 of the Settlement Agreement contain detailed explanations of the TLS rate design, the uncontested proposals, the agreed-upon rates for SDG&E and SoCalGas, and the updated tariffs that SDG&E and SoCalGas plan to use to implement the Settlement Agreement.
4. The two key components that affect the rates agreed to in the Settlement Agreement are the forecasts of gas throughput, and the methodology for allocating the gas transmission, storage, and distribution costs.
5. Based on the litigation positions of the parties and the small percentage difference between the forecasts, the Settlement Agreement's use of the utilities' gas throughput forecasts is reasonable and in the public interest.
6. The cost allocation methodologies and adjustments agreed to in the Settlement Agreement, and the resulting rates, represent a compromise and balancing of the parties' positions and competing interests.
7. A sufficient record exists to adopt the operational issues, cost allocation issues, rate design issues, and other issues agreed to in the settlement agreement.
8. Shell Energy's request for SoCalGas to clarify Rule 30(d)(4) was not responded to by the settlement parties.
9. A comparison of the various customer rates in the Settlement Agreement, as shown in Appendix B and Appendix C of this decision, to the original positions of the utilities, reflect movement by all of the parties on the cost allocation and rate design issues and their acceptance of the rates in the Settlement Agreement.
1. Shell Energy's proposals to reject or modify certain operational provisions of the Settlement Agreement will not be adopted except for the clarification of SoCalGas' Rule 30(D)(4).
2. SoCalGas should be directed in its implementation advice letter to revise its tariff to clarify its Rule 30(D)(4) to allow a firm storage capacity holder to bump interruptible storage capacity through all five nomination cycles.
3. The second, third, and fourth sentences in section II.B.3.A. of the Settlement Agreement, calling for briefs on whether the Commission should adopt a future formal policy on whether the utilities should be at risk for gas throughput, should not be adopted because such a policy may bind a future Commission examining the same issue.
4. For all of the reasons discussed in this decision, the Settlement Agreement is reasonable in light of the whole record and in the public interest, and should be adopted.
5. The Settlement Agreement is consistent with the law.
6. The rates agreed to in the Settlement Agreement, as reflected in the rates and cost allocations shown in Appendix B and Appendix C of this decision, are reasonable and in the public interest, and should be authorized for use in this proceeding.
7. SDG&E and SoCalGas should be directed to file a Tier 2 advice letter with the Energy Division within 30 days of today's date to implement the terms and conditions of the Settlement Agreement, and to present the necessary tariff revisions for review.
IT IS ORDERED that:
1. The June 2, 2009 joint motion to adopt the Settlement Agreement in Phase Two of this proceeding is granted, and except as provided for in Ordering Paragraph 3 below, the terms and conditions of the Settlement Agreement (as set forth in Appendix A of this decision, in Attachments 1 to 4 to Appendix A in the joint motion, and in the rates and cost allocations shown in Appendix B and Appendix C of this decision), are adopted in this cost allocation proceeding of San Diego Gas & Electric Company and Southern California Gas Company.
2. The rates shown in Appendix B for the customers of Southern California Gas Company, and in Appendix C for the customers of San Diego Gas & Electric Company, are authorized and shall be allocated to those customer classes.
3. The second, third, and fourth sentences in section II.B.3.A. of the Settlement Agreement, calling for briefs on whether the Commission should adopt a future formal policy of whether San Diego Gas & Electric Company and Southern California Gas Company should be at risk for gas throughput, is not adopted.
4. Within 30 days from today's date, San Diego Gas & Electric Company and Southern California Gas Company shall file an advice letter with the Energy Division under Tier 2 of General Order 96-B to implement and carry out the terms and conditions of the Settlement Agreement, and to present the necessary tariff revisions, with an effective date of February 1, 2010.
a. Any interested party may protest the advice letter filing as provided for in General Order 96-B.
b. In its advice letter filing, Southern California Gas Company must clarify its Rule 30(D)(4) to allow a firm storage capacity holder to bump interruptible storage capacity through all five nomination cycles.
5. Pursuant to Public Utilities Code § 1701.5, Application 08-02-001 is closed.
This order is effective today.
Dated November 20, 2009, at San Francisco, California.
MICHAEL R. PEEVEY
President
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
TIMOTHY ALAN SIMON
Commissioners
APPENDICES A B C A0802001 Wong
