ALJ/KJB/avs Date of Issuance 6/2/2011

Decision 11-05-026 May 26, 2011

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of San Pablo Bay Pipeline Company LLC for Approval of Tariffs for the San Joaquin Valley Crude Oil Pipeline.

Application 08-09-024
(Filed September 30, 2008)

And Related Matters.

Case 08-03-021
Case 09-02-007
Case 09-03-027

DECISION SETTING RATES FOR TRANSPORTATION
OF CRUDE OIL BETWEEN THE SAN JOAQUIN VALLEY
AND THE SAN FRANCISCO BAY AREA, ORDERING REFUNDS
AND ADOPTING TARIFFS FOR HEATED OIL SERVICE

TABLE OF CONTENTS

Title Page

DECISION SETTING RATES FOR TRANSPORTATION OF CRUDE OIL BETWEEN THE SAN JOAQUIN VALLEY AND THE SAN FRANCISCO BAY AREA, ORDERING REFUNDS AND ADOPTING TARIFFS FOR HEATED OIL SERVICE 2 2

1. Summary 2 2

2. Introduction 2 2

2.1. Jurisdictional and Necessary Property 4 4

2.2. Just and Reasonable Rates 9 9

2.2.1. Applicant's Position 9 9

2.2.2. Independent Shippers' Position 9 9

2.2.3. Discussion 9 9

3. Extent of the Past Period 13 13

4. Determination of Refunds 14 14

5. Forward-looking Just and Reasonable Rates 18 18

5.1. Rate Base 19 19

5.2. Capital Structure 20 20

5.3. Cost of Capital 21 21

5.4. Test Year Operating Expenses 22 22

5.5. Test Year Cost of Service 23 23

6. Just and Reasonable Rates 24 24

7. Tariff Provisions 24 24

8. Comments on Proposed Decision 28 28

9. Assignment of Proceeding 32 32

Findings of Fact 33 33

Conclusions of Law 34 34

ORDER 35 35

ATTACHMENT A - Form of Tariff

DECISION SETTING RATES FOR TRANSPORTATION
OF CRUDE OIL BETWEEN THE SAN JOAQUIN VALLEY
AND THE SAN FRANCISCO BAY AREA, ORDERING REFUNDS
AND ADOPTING TARIFFS FOR HEATED OIL SERVICE

1. Summary

1. We set a rate of $1.34 per barrel with a Pipeline Loss Allowance of 0.10% for the transportation of heavy crude oil from Station 36 in the San Joaquin Valley to the San Francisco Bay Area refineries via the heated pipeline operated by San Pablo Bay Pipeline Company (SPBPC).

2. We order the payment of refunds to Independent Shippers for overcharges made by the Pipeline during the period from April 1, 2005 to the effective date of this decision.

3. We approve the transfer of physical assets from the Pipeline's former owner to SPBPC.

4. We deny the application to SPBPC to exclude certain tanks and truck racks from the assets transferred to it.

5. We adopt a tariff to govern the provision of heated oil transportation service by SPBPC in the form of the tariff shown as Attachment A to this opinion.