2. Procedural Background
This rulemaking was instituted on June 26, 2008, to address the incentive treatment used for natural gas hedging. A scoping memo was issued September 17, 2008, setting a schedule for parties to present and to support their substantive positions and proposals through written comments. The parties actively participating in this proceeding were as follows:
1. The three largest natural gas utilities providing retail gas service in California: PG&E, SoCalGas, and SWG;
2. Southern California Edison Company (SCE) in its capacity as a wholesale customer of natural gas for generation of electricity for sale to its retail electric customers;
3. The Division of Ratepayer Advocates (DRA) and The Utility Reform Network (TURN) representing consumer advocacy issues;
4. Shell Energy North America (Shell) representing competing gas marketer interest; and
5. Lodi Gas Storage, as a competing Independent Gas Storage Provider.
The record was developed through written comments and a workshop. No evidentiary hearings were conducted. Opening comments with parties' positions were filed October 3, 2008, with reply comments filed October 17, 2008. An Administrative Law Judge (ALJ) ruling was issued on October 27, 2008 setting the agenda and topics of discussion for the workshop held November 5, 2008.
The workshop was convened and a staff workshop report was served on parties and made a part of the record in the proceeding by ruling dated November 25, 2008. Comments on the workshop report were filed on December 9, 2008, with reply comments on December 19, 2008. By ALJ ruling dated January 15, 2009, additional information was solicited. Further comments in response to that ruling were filed on February 20, 2009, with reply comments filed on March 13, 2009.
A joint motion was filed on July 10, 2009, sponsored by DRA, TURN, and PG&E for approval of a Proposed Settlement.2 The settlement agreement attached to the motion resolves all issues among the sponsoring parties with respect to the treatment of hedging costs for PG&E. The Settlement, however, does not address the treatment of hedging costs for SoCalGas or SWG. Comments in response to the motion for adoption of the settlement were filed by Shell and SCE, respectively, on August 10, 2009.
2 Because the Settlement contains confidential information about the parameters of the proposed hedging program, sponsors of the Settlement concurrently filed a joint motion for leave to file a confidential version of the Settlement under seal. Sponsors concurrently served on parties a public version of the Proposed Settlement with confidential information redacted. Protection of such confidential information is consistent with past Commission practice. If disclosed, the confidential hedging plan information could compromise PG&E's negotiating leverage. Accordingly, the joint motion to file the confidential unredacted version of the Proposed Settlement under seal is hereby granted.
