ALJ/KOT/hkr Date of Issuance 11/22/2010
Decision 10-11-019 November 19, 2010
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of Crimson California Pipeline L.P., (PLC-26) pursuant to Section 854 of the Public Utilities Code for Approval of Transfer of Control. |
Application 10-07-024 (Filed July 27, 2010) |
DECISION APPROVING TRANSFER OF CONTROL
Today's decision approves the unopposed request of the applicant, Crimson California Pipeline L.P., for approval of transfer of control over the applicant. The transfer will not affect the rates, operations, or day-to-day management of the applicant. The proceeding is closed.
Background
As described in the application, Crimson California Pipeline L.P. (Crimson California) is a California limited partnership. Its principal place of business is 2459 Redondo Ave., Long Beach, California 90806. Its general partner is Crimson Pipeline L.P. In turn, the general partner of Crimson Pipeline L.P. is Crimson Pipeline Management, Inc. (CPMI), a California corporation. Crimson California was formed as a limited partnership for the specific purpose, among others, of owning, operating, and managing smaller, marginal, or idle pipelines and providing pipeline transportation services to the public.
Crimson California currently owns and operates five common carrier crude oil pipeline systems acquired pursuant to Commission authorization. In Decision (D.) 05-04-006, the Commission authorized Crimson California's acquisition of: (i) the Thums 8-inch pipeline system, which transports crude oil produced in the Long Beach Harbor area to various refineries and terminals in the Los Angeles area; (ii) the Ventura gathering pipeline system, which transports crude oil produced in the Fillmore and Ventura areas to the Crimson Ventura Tank Farm; and (iii) the Ventura 10-inch pipeline system, which transports crude oil from the Crimson Ventura Tank Farm and crude oil produced in the Inglewood area to various refineries in the Los Angeles area. D.07-12-046 authorized Crimson California's acquisition of the Line 600 pipeline system and the Line 700/East Crude pipeline system and its associated gathering pipelines, which generally parallel Crimson California's preexisting pipeline systems.
John Grier and Gary Buntmann, the two individuals who currently exercise joint control of Crimson California, have executed a Reorganization Agreement (Attachment B to the application) that, among other things, contemplates a transfer of control of Crimson California. Grier and Buntmann are long-time business partners, each with direct and indirect interests in various companies identified in the Reorganization Agreement, including Crimson California. They have decided to part ways amicably; and the Reorganization Agreement is intended to accommodate the fair division and redistribution of their respective interests, including their interests in Crimson California. The application represents that the proposed transfer of control will have no effect on rates or operations of Crimson California, and the day-to-day management of the public utility will remain unchanged.
According to the application, the proposed transfer of control would be carried out as follows. Under the existing ownership structure, Crimson California's general partner is Crimson Pipeline L.P. In turn, the general partner of Crimson Pipeline L.P. is CPMI, a privately held California corporation, which is owned 49.5% by Grier, and 49.5% by Buntmann. The parent of CPMI is Crimson Resource Management Corp. (CRMC), a Colorado corporation. CRMC is owned equally by individuals, Grier and Buntmann. Effectively, Grier and Buntmann together exercise control of the public utility, Crimson California. Under the terms of the Reorganization Agreement, Crimson Pipeline L.P. remains as the general partner of the public utility, Crimson California. CPMI remains as the general partner of Crimson Pipeline L.P. CPMI, previously owned equally (49.5% each) by Grier and Buntmann, will be 100% owned by Crimson Midstream LLC, which in turn will be 100% owned by Grier.
The effect of the Reorganization Agreement upon control of the public utility, Crimson California, will be transfer of control from CRMC (currently owned equally by Grier and Buntmann) to Crimson Midstream LLC, owned 100% by Grier. Thus, Grier would exercise control of the public utility, Crimson California.
