2. Introduction

SFPP, L.P. (SFPP)¹ is a regulated oil pipeline whose intrastate services are regulated by the Commission. Over the past 13 years (1997 - 2010), SFPP has been the defendant in three pending complaint cases and the applicant in five pending applications. The later proceedings have become dependent on the resolution of unresolved issues in the earlier proceedings. This decision will be the first step to resolving the earliest proceedings. The oldest, Case (C.) 97-04-025 which was remanded for rehearing, is closed herein. We then address major portions of the 2003 test year revenue requirements for Application (A.) 03-02-027.

Before we can address A.03-02-027, we must complete the rehearing of C.97-04-025, and resolve C.00-04-013, in this decision. We find in rehearing C.97-04-025 that: the Sepulveda Line is subject to the Commission's jurisdiction; defendant has not established entitlement to a ratemaking allowance for income tax expense; defendant's environmental costs should be allocated between inter- and intrastate operations; and, as adjusted herein, defendant's rates for the Watson Station facilities are reasonable.

We find, based on the criteria set forth in our earlier decision, D.99-06-093, that after adjusting SFPP's rates for the rehearing issues resolved herein, the rates then in effect were just and reasonable. We dismiss without prejudice A.00-03-044, SFPP's request for market-based rates and we therefore dismiss C.00-04-013.

This decision resolves the cost of capital for A.03-02-027 and then directs parties to attempt to settle, with the aid of a mediator, the remaining issues in A.03-02-027, which will resolve the proceeding. Finally, the remaining issues in the consolidated proceedings, A.04-11-017, A.06-01-015, A.06-08-028, and C.06-12-031 remain pending disposition in a subsequent decision. We also direct the parties to attempt to settle these open proceedings and we will provide a mediator to assist them. If there is an impasse or incomplete resolution after a good-faith settlement effort, the assigned Commissioner and assigned Administrative Law Judge (ALJ) will set a prehearing conference (PHC) and resume litigation of all outstanding issues.

¹ The applicant's legal name is now SFPP, L.P., although it was previously named
Santa Fe Pacific Pipeline, L.P.