2. Background

Crimson California Pipeline L.P. (Applicant or Crimson), is a California limited partnership authorized to do business in the State of California. Its general partner is Crimson Pipeline Management, Inc., a California corporation, whose parent, Crimson Resource Management Corp., a Colorado corporation, currently operates in excess of thirty petroleum production properties located in four different California counties, with the bulk of its operations in Kern County. Crimson is a public utility, subject to the Commission's jurisdiction pursuant to Pub. Util. Code § 216. Specifically, Crimson is a pipeline corporation, as defined by Pub. Util. Code § 228, that owns and operates certain oil pipeline facilities in southern California. Crimson currently owns and operates six common carrier crude oil pipeline systems.

Decision (D.) 10-12-005 issued on December 6, 2010, authorized Crimson's acquisition of certain common carrier crude oil pipelines owned and operated by Chevron Pipeline Company (Chevron), identified as Chevron's Inglewood and Northam crude systems, including associated gathering systems, with points of origination in Los Angeles and Orange Counties and having destinations in Los Angeles County. It is these Chevron pipeline assets that are the subject of this application.

Following the issuance of D.06-05-004, Crimson, its general partner and an affiliated partnership, Cardinal Pipeline L. P. that owns and operates non-public-utility pipeline assets in California, entered into¹ a credit agreement (Credit Agreement) with the Bank of Oklahoma (BOK), a copy of which was previously provided to the Commission as Attachment D to Application (A.) 08-09-005, the application that gave rise to D.06-05-004. Advances under the Credit Agreement are secured by encumbrances in favor of BOK. In D.08-11-047, we approved further encumbrances of utility property consistent with the terms of the Credit Agreement.

¹ D.06-05-004 voided a credit agreement between the Crimson entities and Bank of Oklahoma because it was entered into without prior approval by this Commission in violation of Pub. Util. Code § 851. However, the decision authorized the parties to enter into a substantially identical agreement on a prospective basis. Pursuant to the authority granted in D.06-05-004, in December, 2006 the parties ratified the previously existing credit agreement to make it effective as of the date of issuance of D.06-05-004.