2. Procedural Background

In Decision (D.) 06-12-031, the Commission authorized San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas)¹ to provide off-system delivery (OSD) of natural gas to Pacific Gas and Electric Company (PG&E) on an interruptible basis. D.06-12-031 also authorized the applicants to file an application after May 1, 2008 to offer OSD to pipeline interconnections other than PG&E. In response to that invitation, the application in this proceeding was filed on June 6, 2008.

Timely protests and responses to the application were filed by the Division of Ratepayer Advocates (DRA), Indicated Producers, Salt River Project Agricultural Improvement and Power District, South Coast Air Quality Management District, Southern California Generation Coalition (SCGC), and Transwestern Pipeline Company, LLC (Transwestern). On July 21, 2008, the applicants filed a reply to the protests and responses.

A prehearing conference (PHC) was held on September 29, 2008, and the scoping memo and ruling (scoping memo) was issued on December 18, 2008.

The scoping memo bifurcated two legal issues from the rest of the application. As a result, the legal issues of whether the air quality and the Wobbe Index had already been addressed by the Commission, and whether the application in this proceeding requires the preparation of an environmental impact report under the California Environmental Quality Act, were separately addressed in D.09-06-019.

The other legal issue concerns the applicants' Hinshaw exemptions under the Natural Gas Act. In authorizing the applicants to file an application for OSD to interconnections other than PG&E, the Commission expressed concern in D.06-12-031 about potential operational problems for intrastate gas transmission that could result from expanding OSD, and how the expansion to interconnection points other than PG&E could impact the applicants' Hinshaw exemptions. That issue is addressed in today's decision.

Following the issuance of D.09-06-019 and in accordance with the scoping memo's procedural schedule, a July 20, 2009 amended scoping memo was issued which established the dates for the service of prepared testimony on the remaining issues and the dates for the evidentiary hearing.

The evidentiary hearing was held on October 28 and 29, 2009. Opening and reply briefs were filed, and this proceeding was submitted on December 18, 2009.

¹ SDG&E and SoCalGas are also referred to in this decision as the "applicants."